So, here’s the deal: President Trump told Walmart to “eat the tariffs” — basically, to absorb the extra costs from his new import taxes instead of passing them on to us, the shoppers.
But Walmart? They had other plans.
In mid-May, Walmart announced price hikes on over 4,200 items, including everyday stuff like toys, kitchenware, and electronics.
A doll that used to be $34.97 now costs $49.97.
A fishing reel jumped from $57.37 to $83.26.
Even a simple roll of tape went from $4.24 to $9.94.
People are sharing photos of these price changes online, and it’s causing quite a stir.
Trump wasn’t thrilled.
He posted on social media, telling Walmart to stop blaming tariffs for the price increases and to “eat the tariffs.”
He pointed out that Walmart made billions last year and should be able to handle it.
But Walmart’s CFO, John Rainey, explained that with their thin profit margins, they can’t absorb all the tariff costs. He warned that price increases would become more noticeable by June. Walmart’s CEO, Doug McMillon, added that while they’ll try to keep food prices low, general merchandise prices will likely go up due to the tariffs.
Other retailers are feeling the pressure too.
Best Buy and Mattel have mentioned potential price hikes.
Nike plans to increase prices starting June 1.
Even Costco is adjusting by rerouting imports and focusing on U.S.-made products to keep prices down.
Economists say it’s unrealistic to expect retailers to absorb all the tariff costs.
UBS estimates that a 10% tariff leads to a 4% rise in retail prices.
If retailers tried to cover all the costs, it could lead to reduced investment, job cuts, and other economic issues.
Meanwhile, consumer sentiment remains low.
The University of Michigan’s index stayed at 52.2 in May, one of the lowest readings since 1952.
People are worried about rising prices and economic uncertainty.
So, while Trump wants retailers to “eat the tariffs,” it seems like the costs are being passed on to consumers.
And with ongoing trade tensions and court battles over the legality of the tariffs, it’s unclear how this will all play out.