Walmart price hikes may be on the way due to President Donald Trump’s tariffs on China.
A letter from Walmart (NYSE:WMT) to the Trump Administration warns that the tariffs on China would result in possible price hikes to many of the products that the company sells. According to the letter, these Walmart price hikes could harm the economy as shoppers avoid purchases.
Many products sold through Walmart and other retailers come from China. Many of these items are on President Trump’s tariff list. This adds a 10% tariff onto the products coming to the U.S. from China. That tariff will increase to 25% at the end of the year.
“Given that Walmart was such a huge source of cheap products for low income customers over the years, this really hurts the very people that Trump professes to help,” Sucharita Kodali, a Forrester retail analyst, told CNNMoney.
Walmart is also warning that Trump’s tariffs on China could actually end up hurting its efforts to promote American businesses. The company says that it is planning to invest $250 billion into U.S. businesses by 2023. However, it warns that the tariffs may hurt U.S. manufacturers that get supplies from China.
Randy Hargrove, a spokesman for Walmart, is urging the U.S. and China to reach an agreement to avoid these tariffs. China is considering its own retaliatory action to Trump’s tariffs. Depending on how this all goes, Walmart price hikes could very well last for some time, USA Today notes.
WMT stock was up slightly as of noon Friday.
As of this writing, William White did not hold a position in any of the aforementioned securities.