Walmart CFO Predicts Higher Prices Under Trump Tariffs
Walmart's Chief Financial Officer, John David Rainey, said on Thursday that US Pres.-elect Donald Trump's proposed tariffs "are going to be inflationary" for Walmart shoppers.
Facts
- Walmart's Chief Financial Officer, John David Rainey, said on Thursday that US Pres.-elect Donald Trump's proposed tariffs "are going to be inflationary" for Walmart shoppers.[1]
- Rainey also said that "consumers are going to pay more for items" that are imported with tariffs.[1]
- This comes after he said, "We never want to raise prices. Our model is everyday low prices. But there probably will be cases where prices will go up for consumers."[2]
- During his campaign, Trump touted the idea of 60% tariffs on imports from China, with tariffs on imports from other countries being set at around 10%, in an effort, he said, to eliminate the US trade deficit.[3]
- Senior executives from almost 200 S&P 1500 companies have reportedly begun discussing the effects of tariffs during their earnings calls. Last week, Lowe's Chief Executive Officer, Marvin Ellison, said he had deliberated the "what ifs of tariffs" on the company's suppliers.[3][4]
- These concerns are being raised while JPMorgan is telling clients the odds are slim that a 10% across-the-board tariff will be in place in 2025, as it's unclear how quickly a Trump administration could implement it.[5]
Sources: [1]FOX News, [2]The Hill, [3]Reuters, [4]CNBC and [5]Forbes.
Narratives
- Republican narrative, as provided by The Washington Times and Breitbart. If US-based retailers do the right thing, they won't have to raise prices. Tariffs are meant to make companies operate in the US and employ American workers. So Walmart's best move to maintain its advantage over its competitors will be to source products outside of China and try to get most of its products on US soil. Investors will need to be patriotic and understand that this could take some time for Walmart.
- Democratic narrative, as provided by Salon and Huffington Post. When top executives from some of America's biggest retailers tell the country that Trump's proposed tariffs will lead to higher prices, believe them. The across-the-board tariffs will be an extra tax on American families, bring back higher inflation, and force job cuts. Trump's second-term tariff policies are much more severe than those from his first term, and they should be shelved for the sake of the country.
