Walmart, the largest retailer in the United States, has added its voice to the growing chorus of businesses expressing concern over President-Elect Donald Trump’s proposed import tariffs. These tariffs, which Trump has suggested could range from 10% to 60%, are set to impact goods imported from several countries when he takes office in January. Critics warn that such measures may lead to higher consumer prices and increased inflation.

Walmart Warns of Rising Prices Due to Tariffs

Since Trump’s election win on November 5, numerous companies have sounded alarms over the potential economic impact of these tariffs. Walmart is the latest to express apprehension, with a spokesperson noting:

“We are concerned that significantly increased tariffs could lead to higher costs for our customers at a time when they are still feeling the remnants of inflation.”

With inflation already a pressing issue for American households, Walmart’s concern underscores the wider apprehension across the retail industry about how tariffs might burden consumers further.

Widespread Corporate Impact

Nearly 200 companies listed in the S&P 1500 Composite Index have been compelled to address the potential fallout of Trump’s proposed tariffs. His plans, which make tariffs a central focus of his economic agenda, could force many businesses to rethink supply chain strategies. Companies heavily reliant on imports, particularly from China, may face the steepest challenges, with Trump threatening a 60% tariff on Chinese goods and advocating for a universal minimum 10% tariff to reduce the trade deficit.

For context, current US tariffs generate approximately $100 million annually. Under Trump’s plans, this figure could more than double, creating widespread economic ripples.

Expert Predictions and Retailer Concerns

Retailers like Lowe’s, which sources about 40% of its goods from outside the US, anticipate rising product costs. Brandon Sink, CFO of Lowe’s, warned that such tariffs would “certainly add to product costs.” Analysts from Oxford Economics predict that a 60% tariff on Chinese goods could increase US inflation by 0.7%, while the universal 10% tariff may result in a 0.3 percentage-point rise.
Economists also fear that the rapid implementation of these tariffs could create a "shock effect" on the economy. Brian Jacobsen, chief economist at Annex Wealth Management, observed:

“The president-elect’s plans are far more expansive than his first-term proposals and could be rolled out faster than anticipated.”

Sectors Most at Risk

US Census Bureau data reveals that Chinese imports totaled $433.3 billion between September 2023 and September 2024—a decline from their 2018 peak of $538.5 billion. However, a 60% tariff could severely disrupt industries such as electronics, transportation, chemicals, and minerals, according to the US International Trade Commission.

Taiwan, a major hub for the semiconductor industry, has also drawn Trump’s attention. His pre-election rhetoric included accusations against Taiwan of "stealing" the semiconductor market and demands for the country to contribute more to US defense costs. With tech giants like Apple, Nvidia, and Qualcomm heavily reliant on Taiwan for their supply chains, any disruptions could have widespread implications for the technology sector.

Retail Federation Warns of Higher Prices

The National Retail Federation (NRF), chaired by Walmart’s US head, has issued warnings about potential price hikes across a range of goods, including clothing, toys, furniture, appliances, footwear, and travel products. These anticipated increases highlight the far-reaching consequences of the proposed tariffs on everyday items.

Businesses Adjust Supply Chains Ahead of Policy Shifts

The retail sector is already taking steps to prepare for potential policy changes. During Trump’s first term, many companies began shifting production away from China—a trend that continued under President Biden due to legislation aimed at boosting domestic manufacturing. While the pandemic, labor strikes, and other disruptions have helped US businesses build resilience, Trump’s proposed tariffs could still create significant challenges.

As January approaches, retailers like Walmart are bracing for a potentially turbulent economic landscape. If these tariffs go into effect, they could reshape supply chains, consumer prices, and inflation across the country.

Source: Reuters.com