The forceful tariffs promoted by President-elect Donald Trump would likely lead to higher prices for consumers, according to a top executive at Walmart, the U.S.’ largest company by revenue, a notable warning on the potential inflationary effects of Trump’s favored trade policy tool.
Some items may get more expensive with tariffs.
“There probably will be cases where prices will go up for consumers,” John David Rainey, Walmart’s chief financial officer, told CNBC regarding the impact on his company’s prices of the roughly 10% tax on all imports and 60% tax on Chinese imports backed by Trump.
Tariffs “are inflationary for customers,” Rainey added in the interview published Tuesday alongside Walmart’s quarterly earnings report.
It’s not immediately clear how quickly tariffs could be implemented – the “odds of a 10% across-the-board tariff in 2025 are low,” wrote JPMorgan’s chief U.S. economist Michael Feroli wrote in a recent not to clients.
“We never want to raise prices…so we want to work with suppliers and with our own private brand assortment to try to bring down prices,” explained Rainey about the discount retailer’s strategy in a tariff environment.
Rainey’s comments hint at the trickle-down impact of tariffs, as companies, Walmart in this case, pay the import tax to the U.S. Treasury, and often pass on the higher input costs associated with these fees to consumers. Tariffs are a key issue as Trump shapes his economic agenda for his second presidential term. “Tariffs are the greatest thing ever invented,” Trump said in September, nodding to his preference for the import taxes as a domestic manufacturing catalyst and a foreign policy instrument. Economists largely agree tariffs would increase inflation, coming at an inopportune time for American consumers, as annual inflation is down from the four-decade high of over 9% to a still historically above-average 2.6%.
0.3 to 0.4. Those are the percentage-point increases to annual inflation for the tariffs backed by Trump forecasted by economists at both Bank of America and Goldman Sachs.
Tariffs are a controversial policy among the most influential names in Republican politics, with critics including Elon Musk, the world’s richest person and a close Trump advisor, who said earlier this month he’s “against sudden giant tariffs,” and fellow billionaire and GOP megadonor Ken Griffin, who said Monday he’s “very anxious about the president’s willingness to engage in tariffs as a matter of trade policy.” Those in the more aggressive tariff corner include Scott Bessent, one of the top contenders to score Trump’s nomination for Treasury Secretary, who has repeatedly pushed back on the prevailing view that tariffs are inflationary.
Walmart’s earnings release Tuesday topped Wall Street expectations across the board: Its quarterly profit and sales topped consensus analyst forecasts and the company said it expects earnings to increase more than 10% to a record high this fiscal year in updated guidance. Shares of the retail giant rose 4% to a record-high of nearly $88 per share in morning trading.