Trump takes on Walmart over tariff price hikes, setting up potential showdown with retail industry

Trump’s comments come at a nervy time for the U.S. economy. U.S. stocks opened slightly lower Monday morning after Moody’s downgraded the U.S. sovereign credit rating, a surprise move that hints at the ongoing fallout from Trump’s hectic tariff rollout. That helped send U.S. Treasury yields (how much it costs the U.S. to borrow money) sharply higher.

Walmart shares declined more than 1% Monday. In a statement, it said it would continue to work to keep prices as low as possible “for as long as we can given the reality of small retail margins.”

Trump’s comments may have reflected a recognition that American customers may soon start feeling a more significant impact from higher prices because of tariffs. The president was likely responding to comments Walmart Chief Financial Officer John David Rainey made to CNBC last week in which he said he expected the company to start rolling out tariff-related price hikes later this month, with more in June.

“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.”

In separate comments to investors, CEO Doug McMillon said higher food costs were likely in store as a result of tariffs hitting imports from Colombia, Costa Rica and Peru.

At least one Trump administration official already acknowledged Walmart is unlikely to eat the entirety of the tariffs’ cost. Treasury Secretary Scott Bessent said he spoke Saturday with McMillon, and said that even amid higher prices, customers would remain insulated from inflation thanks to lower gas prices.

But the customers are still likely to face some price increases, Bessent said.

“Walmart will be absorbing some of the tariffs, some may get passed on to consumers,” Bessent said on CNN this weekend. 

Recent economic data has suggested companies have been absorbing initial tariff costs. A report from the Bureau of Labor Statistics reported last week suggested American manufacturers and service providers had refrained from passing along higher U.S. duties on imports in April.

That may soon change — and as the nation’s largest retailer, any decision by Walmart to raise prices is likely to provide cover to stores of any size to likewise pass on some costs, experts say.

“If Walmart’s coming out — with its scale and its buying power and its focus — and saying prices are going to rise, everyone else is going to have to follow suit,” Neil Saunders, managing director at retail consultancy GlobalData, told NBC News last week. “Walmart is firing the starting gun on a period of price increases.”