US retail giant Walmart is facing criticism from President Donald Trump over the company’s decision to raise prices due to tariffs imposed on Chinese goods. The price increases, which are expected to take effect by the end of May and become more pronounced in June, will affect various categories including food, seasonal products, toys, electronics, and home goods.
Walmart CEO Douglas McMillon attributed the price hikes to the high cost of tariffs, particularly on Chinese imports, which have been increased to a 30% rate. The company has stated that it will do its best to keep prices as low as possible but warned that retail margins are narrow, making it challenging to absorb all the pressure from tariffs.
Economists have warned that the tariffs will disproportionately affect lower- and middle-income Americans, who make up Walmart’s primary customer base. Consumer sentiment has already sunk in recent months due to concerns over a recession, with the University of Michigan reporting a near-record low consumer confidence index.
The impact on specific product categories includes:
* Food: Fresh produce such as bananas, avocados, and coffee will become more expensive
* Toys: The tariffs imposed on Chinese imports have led to an increase in prices for toys like Barbie dolls and Nintendo Switch consoles
* Home goods: Consumers are delaying purchases of durable goods due to concerns over a recession
Trump has responded by suggesting that businesses should “eat the tariffs” instead of passing them on to customers. However, economists have dismissed this idea as ludicrous.
As the trade war continues, Walmart’s financial implications will be closely watched. The company’s finance chief, John David Rainey, warned that estimating tariff costs and order quantities will become more challenging when making decisions related to holiday shopping seasons.
Source: https://edition.cnn.com/2025/05/17/business/walmart-product-prices-tariffs