Trump Shifts Blame to Retailers as Trade War Enters New Phase

Strategic Insights -

President Trump's latest move in the ongoing trade war has shifted the focus from China to large American companies, particularly retailers like Walmart, to deal with the rising costs of tariffs. Trump's campaign rhetoric that trading partners, such as China, would bear the costs of tariffs has been contradicted by his recent statements, where he urges retailers to absorb the costs and not pass them on to consumers. White House Press Secretary Karoline Leavitt reiterated that China will be responsible for the tariffs, but the president's words suggest otherwise.

Key Takeaways:

  • The White House has eased up on tariffs with China, lowering them from 145% to 30% for 90 days, but Walmart has announced plans to increase prices as early as June due to the remaining 30% tariff.
  • Trump's campaign rhetoric that trading partners would pay the tariffs has been contradicted by his recent statements, where he urges retailers to absorb the costs and not pass them on to consumers.
  • Retailers, including Walmart, Mattel, Ford, Temu, and Shein, have announced price hikes due to the tariffs, while Home Depot plans to maintain its current pricing levels.
  • Economists and lobbyists have voiced concerns that retailers cannot afford to absorb the entire tariff, citing their thin margins and the potential impact on consumers.
  • Trump's strategy to shift blame to retailers has been criticized by experts, who argue that he is "picking on the guys with the lowest margins" and that his approach is "like being opposed to gravity."
  • A former Commerce Department official noted that 62% of U.S. adults own stock in companies like Walmart, effectively asking them to pass the costs to their shareholders.

Statistics:

  • Walmart reported an operating income of more than $29 billion in fiscal 2025, which is about a 4.4% profit margin on revenue of $674.5 billion.
  • Walmart imported about $49 billion worth of goods from China last year, which means a 30% tariff should be a roughly $15 billion hit.
  • Tariffs on trading partners could go back to the April 2 rate of 10% if they don't engage in good-faith negotiations, warned Treasury Secretary Scott Bessent.
  • 62% of U.S. adults own stock in companies like Walmart, according to a former Commerce Department official.
  • Retailers, including Walmart, will pass on some of the tariffs to consumers, said Treasury Secretary Scott Bessent.

Sources:

  • Alex Gangitano, "Trump urges Walmart to 'eat the tariffs'" on NewsNation's "The Hill"
  • Walmart earnings call transcript, fiscal 2025
  • Douglas Holtz-Eakin, president of the American Action Forum
  • Kevin O'Leary, "Shark Tank" investor, interview on NewsNation's "The Hill"
  • Treasury Secretary Scott Bessent, CNN's "State of the Union"