Walmart, the world’s largest retailer, is still shielding customers from most of the price increases spurred by President Trump’s tariffs on an array of overseas goods, including shipments from China.
While the Bentonville, Ark.-retailer acknowledged charging more for some merchandise, which pushes total bills at the checkout counter higher, “we’re not seeing a great deal of inflation,” Chief Financial Officer Brett Biggs told investors on Tuesday. “I would call it fairly modest at this point when you look at what we’re doing from a pricing perspective.”
The company’s supply costs rose 3.2 percent to $385.3 billion in the year through Jan. 31, according to financial data disclosed Tuesday, helping drag profit down to $6.67 billion.
Its executives are keeping a wary eye on Trump’s negotiations with China, which exports more than $500 billion in goods to the U.S., as a March 1 deadline nears to conclude talks with Beijing. “We will actively manage pricing and margins as warranted with our customers and shareholders in mind,” Biggs said.
Trump, however, has offered some relief this month to investors and businesses worried that he would immediately more than double tariffs on $200 billion of Chinese imports — and add duties to $267 billion more — if no deal was reached in the three months of talks that he and Chinese President Xi Jinping negotiated in Buenos Aires last fall.
[Related: US-China trade talks show signs of progress]
“There is a possibility that I will extend the date,” the president told reporters as recently as Friday. “And if I do that, if I see that we’re close to a deal or the deal is going in the right direction, I would do that at the same tariffs that we’re charging now. I would not increase the tariffs.”
While the effect of the duties on large U.S. retailers and other companies has been mostly manageable so far, firms that are younger and smaller face greater challenges. Several — in regions of the country that supported Trump — have already announced job and production cuts, and economists, trade groups and even GOP lawmakers have warned that the levies threaten to undermine the benefits of 2017’s tax cuts.
That would ultimately hurt consumers, whose spending accounts for about two-thirds of the $20 trillion U.S. economy. While few business leaders argue that China has treated the U.S. unfairly, limiting access to its markets and requiring access to trade secrets from companies seeking to do business there, they believe using tariffs as a remedy may prove more damaging than the original problems.
