Walmart said Thursday that U.S. tariffs on goods from China and other countries are pressuring its supply chain and will soon result in price increases for American shoppers, potentially starting this month.
CEO Doug McMillon told investors that the company is seeing higher input costs on many everyday items, and those increases are likely to be passed along to consumers in the coming weeks and through the summer season.
Speaking after releasing its quarterly earnings, McMillon said the retailer will try to limit the impact on food prices, despite facing narrowing margins in a competitive sector already dealing with cost volatility.
“We’re committed to keeping our prices as low as we can,” he said. “But even with the recent tariff reductions, the scale of the current duties is too large for us to fully absorb, especially in retail where margins are already tight.”
McMillon acknowledged recent efforts by the federal government to reduce tariff burdens, thanking President Trump and Treasury Secretary Scott Bessent for reaching an interim deal that brought tariffs on Chinese goods down to 30% from 145%. Still, he called for deeper reductions, particularly on food items like bananas and avocados, which face a 10% universal tariff despite being mostly imported due to limited domestic production.
Retail sales—an important driver of the U.S. economy—held steady in April, new data showed Thursday, as some consumers grew more cautious with discretionary spending. Shoppers have increasingly prioritized essentials and are pulling back slightly on non-essentials such as dining and entertainment.
“People have the money but are holding back,” said Robert Frick, economist at Navy Federal Credit Union. “Concerns over tariffs and job stability are causing many to save more and spend less, though consumption overall continues to inch upward.”
Walmart reported a 4.5% increase in sales for the quarter ending in April. Executives noted that roughly two-thirds of its goods sold in the U.S. are domestically grown, produced, or assembled, yet many categories—like electronics and toys—still rely heavily on imports, especially from China.
McMillon outlined various strategies Walmart is using to limit price increases. For instance, in cases such as Mother’s Day flowers, Walmart and its suppliers have absorbed the higher costs. In other cases, the company may spread the increase from one item across a broader group of products to minimize consumer impact.
Additionally, Walmart has moved some manufacturing out of China and asked suppliers to switch materials where possible—such as replacing tariffed aluminum with non-tariffed fiberglass.
Several major consumer product companies have issued warnings and adjusted their outlooks for 2025 in response to rising costs and spending uncertainty. That includes PepsiCo (which owns Frito-Lay and Quaker), Kimberly-Clark (maker of Kleenex and Huggies), and Procter & Gamble (which sells Tide, Pampers, and Charmin).
Market uncertainty remains a key theme, with the administration negotiating trade terms on a country-by-country basis while revising its tariff strategy. Although consumer price inflation eased last month, the full impact of recent tariffs has yet to be reflected in broader living costs.
