US President Donald Trump’s promise to lower prices on day one has not materialized for most Americans, as the country is now experiencing a surge in prices due to tariffs imposed by the government.
Walmart, the world’s largest retailer, recently stated that the tariffs are too high and are raising prices for consumers. The company’s CEO, Doug McMillon, said that even at reduced levels announced last week, Walmart cannot absorb the pressure of tariffs on its narrow retail margins.
This is not a unique problem faced by Walmart alone, but rather a widespread issue affecting many companies across various industries. When the government imposes 10% baseline tariffs on all imports, it leads to increased costs for businesses and consumers alike.
Retailers had stockpiled goods in anticipation of Trump’s April tariff rollout, but as those inventories wind down, prices of more expensive goods ordered after April 2 are expected to hit the shelves next month. Consumer spending data also shows a decrease, with April’s consumer spending rising only 0.1% year-over-year.
Industry experts and economists agree that these indicators confirm the impact of trade policy on businesses and consumers. The Federal Reserve Chair Jerome Powell warned that supply shocks may become more frequent and persistent, leading to increased price volatility.
However, there are some areas where prices are actually decreasing due to lower demand. Prices for eggs, airfare, gas, sporting event tickets, and hotel rooms are going down as people cancel vacations due to economic uncertainty.
The bottom line is clear: US tariffs have hit consumers harder than expected, and it’s essential to monitor the situation closely. Fresh data on consumer sentiment and earnings reports from retailers will provide more insights into the impact of tariffs in the coming weeks.
Source: https://edition.cnn.com/2025/05/16/business/tariffs-walmart-prices-nightcap