By The Associated Press
Published: May 18, 2025
Bicycles are displayed at a Walmart, Wednesday, April 16, 2025, in Groton, Conn. (AP Photo/Julia Demaree Nikhinson, File)
WASHINGTON — U.S. Treasury Secretary Scott Bessent acknowledged Sunday that Walmart, the largest U.S. retailer, may pass along some of the costs from U.S. President Donald Trump’s tariffs to its shoppers through higher prices.
Bessent described his call with the company’s CEO a day after Trump warned Walmart to avoid raising prices from the tariffs at all and vowed to keep a close watch on what it does.
As doubts persist about Trump’s economic leadership, Bessent pushed back against inflation concerns, praised the uncertainty caused by Trump as a negotiating tactic for trade talks and dismissed the downgrade Friday of U.S. government debt by Moody’s Ratings.
Yet Walmart does not appear prepared to “eat the tariffs” in full, as Trump has insisted the company and China would do.
Bessent said he spoke Saturday with Walmart CEO Doug McMillon, stressing in two news show interviews that what he thought really mattered for Walmart customers was the decline in gasoline prices. Gas is averaging roughly US$3.18 a gallon, down from a year ago but also higher over the past week, according to AAA.
“Walmart will be absorbing some of the tariffs, some may get passed on to consumers,” Bessent said on CNN. “Overall, I would expect inflation to remain in line. But I don’t blame consumers for being skittish after what happened to them for years under Biden,” a reference to inflation hitting a four-decade high in June 2022 under then President Joe Biden as the recovery from the pandemic, government spending and the Russian invasion of Ukraine pushed up costs.
Walmart did not comment on Bessent’s description of his conversation with McMillon.
In a social media post on Saturday morning, Trump said Walmart should not charge its customers more money to offset the new tariff costs. “I’ll be watching, and so will your customers!!!” he posted.
Bessent said Walmart on its earnings call on Thursday had been obligated under federal regulations “to give the worst-case scenario so that they’re not sued,” suggesting in an NBC interview that the price increases would not be severe in his view.
But Walmart executives said last week that higher prices began to appear on their shelves in late April and accelerated this month.
“We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” Chief Financial Officer John David Rainey told The Associated Press on Thursday.
Bessent maintained that the ratings downgrade was a “lagging indicator” as the financial markets had already priced in the costs of a total federal debt of roughly $36 trillion. Still, the tax plan being pushed by Trump would add more roughly $3.3 trillion to deficits over the next decade, including a $600 billion increase in 2027 alone, according to the Committee for a Responsible Federal Budget.
The treasury secretary maintained that deficits would not be a problem because the economy would grow faster than the debt accumulation, reducing its increase as a size of the overall economy.
Most independent analyses are skeptical of the administration’s claims that it can achieve three per cent average growth as Trump’s 2018 tax cuts failed to do so. Those tax cuts from Trump’s first term did boost economic growth before the pandemic, but they also raised the budget deficit relative to previous estimates by the Congressional Budget Office.
On tariffs, the Trump administration is still trying to determine rates with roughly 40 major trading partners before a July deadline. It’s also in the early stages of a 90-day negotiation with China, after agreed a week ago to reset tariffs on that country from 145 per cent to 30 per cent so that talks can proceed.
Bessent said any worries about tariffs by small business owners most likely reflected the higher rate previously being charged on China. Still, the uncertainty has been a major drag for consumers and businesses trying to make spending plans in the weeks, months and years ahead.
“Strategic uncertainty is a negotiating tactic,” Bessent said. “So if we were to give too much certainty to the other countries, then they would play us in the negotiations.”
Bessent appeared on NBC’s “Meet the Press” and CNN’s “State of the Union.”
Josh Boak, The Associated Press
WASHINGTON — U.S. Treasury Secretary Scott Bessent acknowledged Sunday that Walmart, the largest U.S. retailer, may pass along some of the costs from U.S. President Donald Trump’s tariffs to its shoppers through higher prices.
Bessent described his call with the company’s CEO a day after Trump warned Walmart to avoid raising prices from the tariffs at all and vowed to keep a close watch on what it does.
As doubts persist about Trump’s economic leadership, Bessent pushed back against inflation concerns, praised the uncertainty caused by Trump as a negotiating tactic for trade talks and dismissed the downgrade Friday of U.S. government debt by Moody’s Ratings.
Yet Walmart does not appear prepared to “eat the tariffs” in full, as Trump has insisted the company and China would do.
Bessent said he spoke Saturday with Walmart CEO Doug McMillon, stressing in two news show interviews that what he thought really mattered for Walmart customers was the decline in gasoline prices. Gas is averaging roughly US$3.18 a gallon, down from a year ago but also higher over the past week, according to AAA.
“Walmart will be absorbing some of the tariffs, some may get passed on to consumers,” Bessent said on CNN. “Overall, I would expect inflation to remain in line. But I don’t blame consumers for being skittish after what happened to them for years under Biden,” a reference to inflation hitting a four-decade high in June 2022 under then President Joe Biden as the recovery from the pandemic, government spending and the Russian invasion of Ukraine pushed up costs.
Walmart did not comment on Bessent’s description of his conversation with McMillon.
In a social media post on Saturday morning, Trump said Walmart should not charge its customers more money to offset the new tariff costs. “I’ll be watching, and so will your customers!!!” he posted.
Bessent said Walmart on its earnings call on Thursday had been obligated under federal regulations “to give the worst-case scenario so that they’re not sued,” suggesting in an NBC interview that the price increases would not be severe in his view.
But Walmart executives said last week that higher prices began to appear on their shelves in late April and accelerated this month.
“We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” Chief Financial Officer John David Rainey told The Associated Press on Thursday.
Bessent maintained that the ratings downgrade was a “lagging indicator” as the financial markets had already priced in the costs of a total federal debt of roughly $36 trillion. Still, the tax plan being pushed by Trump would add more roughly $3.3 trillion to deficits over the next decade, including a $600 billion increase in 2027 alone, according to the Committee for a Responsible Federal Budget.
The treasury secretary maintained that deficits would not be a problem because the economy would grow faster than the debt accumulation, reducing its increase as a size of the overall economy.
Most independent analyses are skeptical of the administration’s claims that it can achieve three per cent average growth as Trump’s 2018 tax cuts failed to do so. Those tax cuts from Trump’s first term did boost economic growth before the pandemic, but they also raised the budget deficit relative to previous estimates by the Congressional Budget Office.
On tariffs, the Trump administration is still trying to determine rates with roughly 40 major trading partners before a July deadline. It’s also in the early stages of a 90-day negotiation with China, after agreed a week ago to reset tariffs on that country from 145 per cent to 30 per cent so that talks can proceed.
Bessent said any worries about tariffs by small business owners most likely reflected the higher rate previously being charged on China. Still, the uncertainty has been a major drag for consumers and businesses trying to make spending plans in the weeks, months and years ahead.
“Strategic uncertainty is a negotiating tactic,” Bessent said. “So if we were to give too much certainty to the other countries, then they would play us in the negotiations.”
Bessent appeared on NBC’s “Meet the Press” and CNN’s “State of the Union.”
Josh Boak, The Associated Press
Trump tells Walmart to ‘eat the tariffs’ as retailer expects prices to increase
By CNN
Published: May 17, 2025
Food
“Food inflation is very much on our mind,” McMillon said.
Bananas, avocados and coffee are among some of the groceries that McMillon said come from Colombia, Costa Rica and Peru. America also imports beets, cabbage, melons, and pineapples from Costa Rica. Sweet potatoes and citrus are imported from Peru.
Walmart did not say how much prices could increase on fruits and vegetables.
“We’ll do our best to control what we can control in order to keep food prices as low as possible,” McMillon said, suggesting that “controlling the amount of fresh food waste” could help.
Between February and April, the average price of bananas per pound has increased by about two cents at U.S. retailers, according to the Bureau of Labor Statistics.
Seasonal products
Ryan Monarch, assistant professor of economics at Syracuse University, told CNN that seasonal and holiday shopping purchases can’t be delayed for two to three months to wait on the trade war to play out.
Walmart is currently focused on back-to-school shopping, according to McMillon. He explained that tariffs are paid as soon as a product enters the country through customs, meaning the higher tariffs are already affecting shipments.
“So I think what we’re looking at is upward pressure that began in April and plays through the entire year on things that are imported,” McMillon said.
Estimating tariff costs and order quantities could “get more challenging” further down the line when making “decisions related to things like Halloween and Christmas,” he said.
Toys, electronics and baby gear
“China, in particular, represents a lot of volume in certain categories like electronics and toys,” McMillon said.
Roughly 80 per cent of toys sold in the United States are made in China, according to the Toy Association, an industry group.
Toy companies, like Hasbro, the owner of Nerf and Play-doh, said some items will be cut from its portfolio, and Barbie creator Mattel has issued warnings about potential price hikes due to tariffs.
“Well, maybe the children will have two dolls instead of 30 dolls, you know? And maybe the two dolls will cost a couple of bucks more than they would normally,” Trump said earlier this month, acknowledging the potential impact tariffs will have on toys.
There has already been a jump in the price of toys. Product pricing analysis from research firm Telsey Advisory Groups showed that the price of a Barbie doll with a swimsuit sold at Walmart’s competitor Target rose 42.9 per cent over a week in mid-April to US$14.99.
Gaming products should also see big price hikes. Initially priced at $450, Nintendo’s Switch 2 could instead cost around $600, according to experts.
Even an Apple iPhone 17 could cost more than $1,000 instead of $799, according to Daniel Morgan, senior portfolio manager at investment firm Synovus.
Childcare products, such as strollers, clothes, car seats and formula, could also see a price hike. Industry experts estimate that about 90 per cent of children’s and baby gear products are manufactured exclusively in China, and that won’t change anytime soon.
“Customers need those things. Even if they were to raise prices on those products, customers are still going to buy them,” Syracuse University’s Monarch said. “So you might expect products like that to see prices increasing pretty quickly.”
Home goods
In 2024, China sent more than $438 billion worth of goods into American homes. Nearly 19 per cent of that total was machinery and mechanical appliances, according to data from the U.S. International Trade Commission. Meanwhile, four per cent of last year’s imports from China were bedding, furniture and lighting.
Rainey, Walmart’s CFO, said general merchandise sales in the United States declined slightly during the first quarter, “with softness in electronics, home products and sporting goods.” Because home goods are not considered necessities like groceries and baby gear, consumers are more likely to hold off on buying them.
“Consumers are very worried, and what they’re doing is they’re delaying their purchases of durable goods — things like cars, things like appliances,” said Monarch.
Monarch added that Walmart was among companies to increase imports before tariffs took effect, allowing them to stock up on products that won’t perish.
This story has been updated with additional information.
Auzinea Bacon, CNN
By CNN
Published: May 17, 2025
Toys are displayed on shelves in a Walmart Supercenter on May 15, in Austin, Texas. (Brandon Bell/Getty Images via CNN Newsource)
U.S. President Donald Trump on Saturday said Walmart needs to stop “trying to blame tariffs” after the retail giant announced its products would become more expensive.
Walmart’s CEO said the price increases were a result of Trump’s tariffs being “too high,” particularly when it came to Chinese goods.
“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Walmart CEO Douglas McMillon said Thursday in an earnings call.
Trump responded on Saturday, posting to Truth Social that “Between Walmart and China they should, as is said ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!”
Trump’s comments echoed Commerce Secretary Howard Lutnick’s comments Sunday on CNN’s “State of the Union,” arguing that “businesses and the countries primarily eat the tariff.” Former U.S. treasury secretary Larry Summers has called such theories “ludicrous.”
Economists have told CNN that the tariffs will burden lower- and middle-income Americans, who have historically been Walmart’s primary customer base. And consumers often go to the retail giant for non-negotiable purchases, such as groceries.
The changes will likely take effect by the end of May, and prices will increase “much more” in June, Walmart’s finance chief, John David Rainey, told CNBC.
Walmart, which has over 4,600 stores in the United States, gets merchandise from Canada, China, India, Mexico and Vietnam, among other nations. Those countries face at least 10 per cent in tariffs, and imports of steel, aluminum, cars and auto parts face 25 per cent tariffs.
“All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact,” McMillon said.
Trump increased tariffs on most Chinese goods to a whopping 145 per cent, but that rate dropped to 30 per cent on Monday as part of a 90-day truce with China. But Trump said the tariffs could become “substantially higher” if a trade agreement with China is not reached.
Other countries are negotiating with the United States amid a 90-day pause on reciprocal tariffs. Baseline tariffs will not go lower than 10 per cent during negotiations, Lutnick told CNN on Sunday.
Trump’s trade war has sunk consumer sentiment in recent months. The University of Michigan reported that consumer sentiment fell 2.7 per cent between April and May — a near-record low, in part due to Americans fearing a recession.
Here’s what is expected to get more expensive at Walmart.
U.S. President Donald Trump on Saturday said Walmart needs to stop “trying to blame tariffs” after the retail giant announced its products would become more expensive.
Walmart’s CEO said the price increases were a result of Trump’s tariffs being “too high,” particularly when it came to Chinese goods.
“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Walmart CEO Douglas McMillon said Thursday in an earnings call.
Trump responded on Saturday, posting to Truth Social that “Between Walmart and China they should, as is said ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!”
Trump’s comments echoed Commerce Secretary Howard Lutnick’s comments Sunday on CNN’s “State of the Union,” arguing that “businesses and the countries primarily eat the tariff.” Former U.S. treasury secretary Larry Summers has called such theories “ludicrous.”
Economists have told CNN that the tariffs will burden lower- and middle-income Americans, who have historically been Walmart’s primary customer base. And consumers often go to the retail giant for non-negotiable purchases, such as groceries.
The changes will likely take effect by the end of May, and prices will increase “much more” in June, Walmart’s finance chief, John David Rainey, told CNBC.
Walmart, which has over 4,600 stores in the United States, gets merchandise from Canada, China, India, Mexico and Vietnam, among other nations. Those countries face at least 10 per cent in tariffs, and imports of steel, aluminum, cars and auto parts face 25 per cent tariffs.
“All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact,” McMillon said.
Trump increased tariffs on most Chinese goods to a whopping 145 per cent, but that rate dropped to 30 per cent on Monday as part of a 90-day truce with China. But Trump said the tariffs could become “substantially higher” if a trade agreement with China is not reached.
Other countries are negotiating with the United States amid a 90-day pause on reciprocal tariffs. Baseline tariffs will not go lower than 10 per cent during negotiations, Lutnick told CNN on Sunday.
Trump’s trade war has sunk consumer sentiment in recent months. The University of Michigan reported that consumer sentiment fell 2.7 per cent between April and May — a near-record low, in part due to Americans fearing a recession.
Here’s what is expected to get more expensive at Walmart.
Food
“Food inflation is very much on our mind,” McMillon said.
Bananas, avocados and coffee are among some of the groceries that McMillon said come from Colombia, Costa Rica and Peru. America also imports beets, cabbage, melons, and pineapples from Costa Rica. Sweet potatoes and citrus are imported from Peru.
Walmart did not say how much prices could increase on fruits and vegetables.
“We’ll do our best to control what we can control in order to keep food prices as low as possible,” McMillon said, suggesting that “controlling the amount of fresh food waste” could help.
Between February and April, the average price of bananas per pound has increased by about two cents at U.S. retailers, according to the Bureau of Labor Statistics.
Seasonal products
Ryan Monarch, assistant professor of economics at Syracuse University, told CNN that seasonal and holiday shopping purchases can’t be delayed for two to three months to wait on the trade war to play out.
Walmart is currently focused on back-to-school shopping, according to McMillon. He explained that tariffs are paid as soon as a product enters the country through customs, meaning the higher tariffs are already affecting shipments.
“So I think what we’re looking at is upward pressure that began in April and plays through the entire year on things that are imported,” McMillon said.
Estimating tariff costs and order quantities could “get more challenging” further down the line when making “decisions related to things like Halloween and Christmas,” he said.
Toys, electronics and baby gear
“China, in particular, represents a lot of volume in certain categories like electronics and toys,” McMillon said.
Roughly 80 per cent of toys sold in the United States are made in China, according to the Toy Association, an industry group.
Toy companies, like Hasbro, the owner of Nerf and Play-doh, said some items will be cut from its portfolio, and Barbie creator Mattel has issued warnings about potential price hikes due to tariffs.
“Well, maybe the children will have two dolls instead of 30 dolls, you know? And maybe the two dolls will cost a couple of bucks more than they would normally,” Trump said earlier this month, acknowledging the potential impact tariffs will have on toys.
There has already been a jump in the price of toys. Product pricing analysis from research firm Telsey Advisory Groups showed that the price of a Barbie doll with a swimsuit sold at Walmart’s competitor Target rose 42.9 per cent over a week in mid-April to US$14.99.
Gaming products should also see big price hikes. Initially priced at $450, Nintendo’s Switch 2 could instead cost around $600, according to experts.
Even an Apple iPhone 17 could cost more than $1,000 instead of $799, according to Daniel Morgan, senior portfolio manager at investment firm Synovus.
Childcare products, such as strollers, clothes, car seats and formula, could also see a price hike. Industry experts estimate that about 90 per cent of children’s and baby gear products are manufactured exclusively in China, and that won’t change anytime soon.
“Customers need those things. Even if they were to raise prices on those products, customers are still going to buy them,” Syracuse University’s Monarch said. “So you might expect products like that to see prices increasing pretty quickly.”
Home goods
In 2024, China sent more than $438 billion worth of goods into American homes. Nearly 19 per cent of that total was machinery and mechanical appliances, according to data from the U.S. International Trade Commission. Meanwhile, four per cent of last year’s imports from China were bedding, furniture and lighting.
Rainey, Walmart’s CFO, said general merchandise sales in the United States declined slightly during the first quarter, “with softness in electronics, home products and sporting goods.” Because home goods are not considered necessities like groceries and baby gear, consumers are more likely to hold off on buying them.
“Consumers are very worried, and what they’re doing is they’re delaying their purchases of durable goods — things like cars, things like appliances,” said Monarch.
Monarch added that Walmart was among companies to increase imports before tariffs took effect, allowing them to stock up on products that won’t perish.
This story has been updated with additional information.
Auzinea Bacon, CNN
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