Walmart says it will pass on some tariff price hikes.
Price Hikes Later this Month
Please note Walmart CFO Says Price Hikes from Tariffs Could Start Later this Month.
Walmart on Thursday fell just short of quarterly sales estimates, as even the world’s largest retailer said it would feel the pinch of higher tariffs.
In an interview with CNBC, Chief Financial Officer John David Rainey said tariffs are “still too high” – even with the recently announced agreement to lower duties on imports from China to 30% for 90 days.
“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he said. “It’s more than any supplier can absorb. And so I’m concerned that consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”
About a third of what Walmart sells in the U.S. comes from other parts of the world, with China, Mexico, Canada, Vietnam and India representing its largest markets for imports, Rainey said on the company’s earnings call Thursday.
CEO Doug McMillon said on the company’s earnings call that tariffs on China, in particular, create the greatest cost pressure. He said imports from the country account for high volume in categories such as toys and electronics.
He said Walmart is focused on keeping food prices low, but said tariffs on countries like Costa Rica, Peru and Colombia have put pressure on the prices of bananas, avocados, coffee and roses.
In an interview with CNBC on Thursday, Rainey said the company is working with vendors to try to keep prices down. But, he added “this is a little bit unprecedented in terms of the speed and magnitude in which the price increases are coming.”
Still, he said, Walmart plans to “play offense” by keeping its price gaps below competitors. He said the company will absorb some of the higher prices from tariffs and expects suppliers will, too.
He said Walmart has not canceled any orders, but has reduced the size of some purchases. For example, he said, it is buying less of items that it anticipates may sell less because of a higher tariff-related price.
Obvious Solution
The solution is obvious. We need to grow more more bananas, avocados, and coffee in Chicago.
Alternatively, avocado growers can buy more weapons or Boeing aircraft.
Who Pays for These Tariffs?
Hooray for Walmart for eating some of the cost, for now.
The rest will be borne by people who eat food and buy clothes, shoes, games, electronics, appliances, and toys.
If you live in Trumperland, then the avocado growers pay the tariffs.
In the real world, those who don’t eat, don’t wear clothes, and don’t buy games and appliances, etc., won’t be impacted by these tariffs.
Raise your hand if you are in that category.
Who Will Be Impacted the Most?
Those who spend nearly every penny on food, clothes, appliance, toys, and necessities are the ones most impacted.
In other words, the poor and middle classes will bear the brunt of Trump’s tariffs. Tariffs are a very regressive tax.
Rubbing SALT in the Wound
The poor need to pay more so Trump can give more deductions to people in high tax states like New York, begging to deduct up to $30,000 in state and local income taxes (SALT).
Almost all of the SALT tax break would go to households making more than $200,000 per year, according to analysis from the Tax Policy Center.
If lawmakers repealed the cap completely, as many Republicans and Democrats demand, households making $430,000 or more would see nearly three-quarters of the benefit, according to a separate Tax Policy Center analysis.
Trump also wants to make interest on auto loans deductible, and no collect no tax on tips.
Whatever happened to the Republican idea of lower taxes across the board instead of passing out favors to select groups?
The “One Big Beautiful Bill” Will Continue Spending at Biden’s Level
Please note The “One Big Beautiful Bill” Will Continue Spending at Biden’s Level
Republicans Surrender
Please note The GOP Surrenders on Medicaid
The House bill shrinks from a fight over able-bodied men on the dole.
The work requirement doesn’t kick in until 2029—a political lifetime from now. The bill also sets up a waiver process, which states have long abused to evade work rules in food stamps.
But far more notable is that the bill fails to end Medicaid’s outrageous bias toward prime-age men who can work. The feds pay 90% of the cost of able-bodied adults eligible for Medicaid under the Affordable Care Act—but only roughly 50% to 77% (depending on the state) for pregnant women, the blind and so on.
Republicans won’t even insist that able-bodied persons must work.
Republicans threaten to “primary” everyone in Congress who does not go along with this nonsense.
On May 11, I noted Budget and Deficit Common Sense from Rand Paul Gets Him Labeled a RINO
If you believe fiscal conservativeness is a Republican value, then Trump is the RINO, not Rand Paul.