Walmart Inc. is ready to raise some of its prices if President-elect Donald Trump follows through on his trade threats.
Company executives discussed the potential strategy on Tuesday. Major retailers Lowe’s, Steve Madden, and e.l.f. Beauty have already publicly grappled their prices might increase or that their would-be price-slashing strategies could backfire.
Though the company beat quarterly Street estimates, and executive hyperbole can become a regulatory hot button, Walmart Chief Financial Officer John David Rainey said the retailer has braced for new tariffs and that they’ll “probably” drive select prices up.
Trump has prioritized trade as a potential policy for his second administration, specifically the importation of Chinese goods. He suggested tariffs of 10% to 20% could further bolster state-issued taxes against companies hitting 60% to 100% of their total directly tied to China.
China sells a majority of most of what Walmart stock in the U.S., possibly slicing into the company’s total revenue. Rainey said approximately two-thirds of all U.S. merchandise are made, grown, or assembled from its domestic states.
Said Rainey, “We’ve diversified steadily to address the tariff environment that we’ve existed in for seven years now. Tariffs are expensive for customers, and we plan to alleviate them wherever possible.”
Matthew Shay, CEO of the National Retail Federation, wrote earlier this month that tariffs are “a tax on American families.” They’re “blatantly inflationary,” he said, while demand and price for U.S. suppliers remain high.
Supply diversification has also helped limit the brand’s growing reliance on its biggest importers, Rainey said, specifically the ones in China.
Forty percent of Lowe’s inventory comes from outside the U.S., said its CFO Brandon Sink. It’s also been “diversifying,” and it’s “well prepared to respond to any changes.”
He continued, “We think our new America First plan ensures we’re insulated for whatever may come.”
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