Walmart says it will pass on some tariff price hikes.
Price Hikes Later this Month
Please note Walmart CFO Says Price Hikes from Tariffs Could Start Later this Month.
Walmart on Thursday fell just short of quarterly sales estimates, as even the world’s largest retailer said it would feel the pinch of higher tariffs.
In an interview with CNBC, Chief Financial Officer John David Rainey said tariffs are “still too high” – even with the recently announced agreement to lower duties on imports from China to 30% for 90 days.
“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he said. “It’s more than any supplier can absorb. And so I’m concerned that consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”
About a third of what Walmart sells in the U.S. comes from other parts of the world, with China, Mexico, Canada, Vietnam and India representing its largest markets for imports, Rainey said on the company’s earnings call Thursday.
CEO Doug McMillon said on the company’s earnings call that tariffs on China, in particular, create the greatest cost pressure. He said imports from the country account for high volume in categories such as toys and electronics.
He said Walmart is focused on keeping food prices low, but said tariffs on countries like Costa Rica, Peru and Colombia have put pressure on the prices of bananas, avocados, coffee and roses.
In an interview with CNBC on Thursday, Rainey said the company is working with vendors to try to keep prices down. But, he added “this is a little bit unprecedented in terms of the speed and magnitude in which the price increases are coming.”
Still, he said, Walmart plans to “play offense” by keeping its price gaps below competitors. He said the company will absorb some of the higher prices from tariffs and expects suppliers will, too.
He said Walmart has not canceled any orders, but has reduced the size of some purchases. For example, he said, it is buying less of items that it anticipates may sell less because of a higher tariff-related price.
Obvious Solution
The solution is obvious. We need to grow more more bananas, avocados, and coffee in Chicago.
Alternatively, avocado growers can buy more weapons or Boeing aircraft.
Who Pays for These Tariffs?
Hooray for Walmart for eating some of the cost, for now.
The rest will be borne by people who eat food and buy clothes, shoes, games, electronics, appliances, and toys.
If you live in Trumperland, then the avocado growers pay the tariffs.
In the real world, those who don’t eat, don’t wear clothes, and don’t buy games and appliances, etc., won’t be impacted by these tariffs.
Raise your hand if you are in that category.
Who Will Be Impacted the Most?
Those who spend nearly every penny on food, clothes, appliance, toys, and necessities are the ones most impacted.
In other words, the poor and middle classes will bear the brunt of Trump’s tariffs. Tariffs are a very regressive tax.
Rubbing SALT in the Wound
The poor need to pay more so Trump can give more deductions to people in high tax states like New York, begging to deduct up to $30,000 in state and local income taxes (SALT).
Almost all of the SALT tax break would go to households making more than $200,000 per year, according to analysis from the Tax Policy Center.
If lawmakers repealed the cap completely, as many Republicans and Democrats demand, households making $430,000 or more would see nearly three-quarters of the benefit, according to a separate Tax Policy Center analysis.
Trump also wants to make interest on auto loans deductible, and no collect no tax on tips.
Whatever happened to the Republican idea of lower taxes across the board instead of passing out favors to select groups?
The “One Big Beautiful Bill” Will Continue Spending at Biden’s Level
Please note The “One Big Beautiful Bill” Will Continue Spending at Biden’s Level
Republicans Surrender
Please note The GOP Surrenders on Medicaid
The House bill shrinks from a fight over able-bodied men on the dole.
The work requirement doesn’t kick in until 2029—a political lifetime from now. The bill also sets up a waiver process, which states have long abused to evade work rules in food stamps.
But far more notable is that the bill fails to end Medicaid’s outrageous bias toward prime-age men who can work. The feds pay 90% of the cost of able-bodied adults eligible for Medicaid under the Affordable Care Act—but only roughly 50% to 77% (depending on the state) for pregnant women, the blind and so on.
Republicans won’t even insist that able-bodied persons must work.
Republicans threaten to “primary” everyone in Congress who does not go along with this nonsense.
On May 11, I noted Budget and Deficit Common Sense from Rand Paul Gets Him Labeled a RINO
If you believe fiscal conservativeness is a Republican value, then Trump is the RINO, not Rand Paul.
In 2023, Walmart increased minimum wage to $14 per hour. The price of many Walmart grocery items, that were cheaper than at major grocery stores, escalated and were no longer a bargain. Walmart blamed cost increases (permanent increases) on supply chain problems and the pandemic.
This year 2025, Walmart increased average hourly wages to over $17.50 per hour. In addition, Walmart implemented a raise for its market managers, increasing starting base pay from $130K to $160K, and increased annual stock grants from $75K to $100K. The potential bonus for market managers increased from up to 90% of their base salary to 100%. Pushing total compensation to over $600K.
Like 2023, the customer will pick up the cost of progressive employee benefits. Walmart’s CFO diverts the criticism for increasing prices away from their liberal inflationary wage policy, toward Trump’s tariffs.
Last week, Powell revived QE and purchased $43.6B Treasuries over four days. Like Walmart’s CFO, Powell distracts the low information consumer away from the Fed’s inflationary monetary policy, and focuses the TDS on Trump’s tariffs.
Maybe it has something to do with that late March announcement, that. Walmart had lost $22 Billion?
Perhaps people will learn how to live within their means. Tough love and all that….
Not to worry plebs.
Trump et al has it all figured out.
Low interest rates.
Low inflation.
High employment.
World peace day one.
Pay attention and believe.
The golden age is upon us,
Not the golden shower variety, o assure you.
Stay vigilant, stay strong…
Current inflation via wally world raising prices is transitory.
Buy stawks, going to the moon and beyond.
Business man billions aire will lift all big an small.
Keep the faith and buy Melania coin.
You’ll all be rich.
Especially those of you working on minimum wage.
No taxes on anyone making 100k pet year single filer.
Social security no tax.
Free prescription drugs for everyone.
Might have a yip or two or three yips but Bonds will be bought in infinite amounts.
Seven trillion to military lethal warriors of the red white and blue.
Libertarians will have zero federal taxes because they know the way…
I have written, so it shall be.
Sleep well comrades.
I would be more worried about WalMart having to raise prices because of shoplifting.
That and lost revenue by having to lock up up product, because of shoplifting.
The only cause and effect mentioned is Trump related.
Trump sells, but who is buying?
Mish, the US tried low tariffs for decades. It didn’t work because most of our “trading partners” cheated. Libertarianism doesn’t work in high doses.
Btw, if American Pharma companies existed in Europe, they would have been nationalized (in the European way – keep them private in name only, but with the gvt dictating prices through the formulary). That’s how they keep the prices low – because without low salaries in med and low drug prices, there is no single payer.
Libertarians simply say:
“Oh… you have tariffs and hurdles? Well I guess there will be less trade then. Have a great day!”
Yes, Europe has less trade because of the much higher VAT tax, right?
You bought a car from a dealer. He asked 20,000$ and you paid happily although you knew he took some profit. Don’t complain he cheated you after transaction.
When do we start to see some inflation from the Tariffs? December 2026? lol
Right after the recession starts.
You won’t see too much inflation now since Trump caved and reduced 145% tariffs on China by 115% a week after they started.
At 30%, companies like Walmart say they will cover a bit of that tariff by making less profit and pass the rest on to the customer.
So about 30% of Walmart products (the ones they import from China) will soon go up in price by maybe 20%.
Unless Trump changes the number yet again.
Trump to UAE president: “We have a term ‘groceries.’ It’s an old term but it means basically what you’re buying, food, it’s a pretty accurate term but it’s an old fashioned sound but groceries are down.”
An honest response. Refreshing in today’s world.
Confirming more inflation from trump’s policies.
Big Beautiful Bill as Big Beautiful Failure?
https://www.politico.com/news/2025/05/15/megabill-teeters-after-hard-liners-make-their-stand-00352892
vote tomorrow, got popcorn?
Trump says he doesn’t want Apple building products in India: ‘I had a little problem with Tim Cook’ – CNBCTrump doesn’t like Apple building products in both China or India but locally only.
Expect Apple mobile price to rise significantly.
I watched several videos of disassembling phones. About a dozen small screws need to be removed in a particular sequence.
I wonder what would happen if there were no sweatshops. Would the designers switch to use industrial glues and robots? Most likely, but why bother.
I don’t know about where you live, but here in Florida it seems there is a phone repair store every few blocks. So there are plenty of Americans who are happy to disassemble Apple / Android phones to replace screens, batteries, charging ports and whatever else fails.
Apple was leading the charge to make batteries non-replaceable, but the loophole is that the front and back face are glued on. The removal includes heating up the face and gently lifting the plate. So yes, you can replace the screen and batteries, but would guess 99.9% don’t ever do that.
You really think a couple phone repair shops in an area shows availability of thousands of people willing to work on an assembly line?
I think the fact there are currently 10s of thousands of Americans working assembly lines is proof enough of that. The missus is from a small town in Texas (Wichita Falls) that has assembly type plants located there for cheap labor (15/hr) due to cheap cost of living.
Besides, I am pretty sure they assemble those phones in dedicated stations (ie 1 person does the work rather than do a bit and pass it on to the next person to do a bit more). Which is essentially like working in a phone store.
There is a reason for this. Apple avoids US Corporate taxes by assembling elsewhere because they are ‘technically’ located in Ireland where the Corp tax rate is vastly lower than here.
Getting them assembled back in America would subject those hundreds of billions of dollars to US Corp taxes.
“We import about a third of our merchandise…”
I thought Walmart was a shipping company masquerading as a retailer.
I stand corrected.
Walmart shareholders will pay for the tariffs too. Many costs will not be passed all the way to the consumer. Lower margins mean lower profits and lower share prices.
Walmart earnings aren’t exactly soaring, so how does this company merit a P/E of 30?
The SALT deduction was rightly removed in 2018. It should stay dead. Otherwise people in low-tax states are paying higher effective federal tax rates than those in high-tax states, which is grossly unequal and unfair.
It wasn’t removed it was capped at 10K. To be truly fair it should be eliminated entirely.
While they are doing that, they should also eliminate the Mortgage interest deduction too.
You can grow coffee and bananas in Florida and Puerto Rico, and the Panama Zone. Trumpeters don’t eat avocados.
Walmart seems to be using tariffs as cover for poor performance of some of its business, and pretending that the recession wasn’t already baked in. Suddenly the maxxed out credit cards are omitted from the discussion, and other inconvenient truths.
If retail business models are based on a race to the bottom, maybe they need to invest in automation and improve efficiency within their US network, rather than blame not being able to exploit developing countries to sell cheap crap to American peasants.
…and by the way, how is subsidising unproductive states good for the national economy?! You need to make it easier for the stronger states to pull the weight that the weaker states never could, with or without tax breaks for peasants. Mish is so committed to this narrative that he’s starting to sound like a Socialist.
Who pays for tariffs? Bad business models do… let them die and be replaced.
LOL coffee doesn’t grow in Florida
Yeah I think he imagines any warm climate will do. What he doesn’t realize is you also need altitude and when the whole state is like 6 ft above the Ocean that’s not very much altitude 😀
Fl doesn’t have any altitude but the state does have a whole lot of attitude!
A few “farms” are starting to grow coffee in California.
( https://seaislandcoffee.com/products/california-unroasted )
One offering is only $305 for just over 1 lb for what you can find at the Coffee Bean Corral from numerous other countries for about $8/lb.
Sounds like a great solution.
I seems to me the missing culprit is the voter. voters are controlling as they prefer to have government goodies. they punish anyone who tries to reduce their benefits and the DEMs know it. solution: cut benefits, spending, increase costs etc. result DEMS win elections and you will be happy. Reps are trying to. work in real world. It aint pretty. knowing changes until voters learn the consequences of their decisions to continual to demand benefits AND have to pay
I heard that Trump won the case of the Panama canal he was working on (Chinese companies are out, canal is protected by US etc). Maybe it was part of the tariff negotiations?
I’m patient in terms of “waves of lower and higher cost of living“, let’s see how it plays out. Since I’ve been living alone now, my “metric” is that I buy the same things every two weeks from Amazon (delivery – no substitutions) and the metric amount is exactly $100 (to get free delivery, though I tip generously). Mainly meats, eggs, beans, tomatoes, etc. So far:
i) my groceries are about 15% down overall from 6 months ago.
ii) Heating gas is way down, gasoline is the same.
iii) Cigarettes are up, which forces me to drive 2 hours every month to get cheaper from a different Illinois county.
I’m keeping track.
Anyone still smoking tobacco in 2025 can safely be ignored
Imagine mediocre stage clowns in Hollywood who do cocaine (among other things). And most of the population simps on them. In their case, their own children safely ignore them.
Wait a minute, you drive 2 hrs to get cheaper cigs? Is that both ways (4 hrs) or total?
Even if it’s total, that figures to be say 120-140 miles round trip. If you get 30 MPG you are looking at 4-5 gallons of gas which is 12-18 dollars depending on what the cost of gas is in your area.
If you save $1 a pack, you need to be buying and awful lot of cigs to make it worth while. Like a months worth (40-60 packs) when you also figure in your time, wear and tear on the car etc.
I drive 1 hour to go and 1 hour to return. On the way I stop for pretty pics in local forests, in the spring/summer of pretty suburban decorations and gardens. I buy 3-4 cartons. The savings are about $3 per pack. (Cook County vs. Lake County). So I get a relaxing drive in an old manual Honda Accord that burns close to nothing, get the car battery charged, and save about $100 on cigs.
Cig prices: Downtown $21/pack, my area $15/pack, a little North $12/pack.
Up there the groceries are cheaper too (upper middle class areas with lower taxes overall).
Why not use mail order? Or go to an Indian casino?
But what is it per carton? Everyone I know who is a regular smoker buys by the carton, not the pack.
They charge the same those gas stations, no carton discount.
Many consumers will have to make serious spending changes. Say good bye to coffee, coca-cola, dining out, traveling on vacation, smart phone and streaming services. Say hello to water, PBJ sandwiches, staycation, landlines and books.
No one has a landline these days unless it’s for a security system – and even those don’t need landlines, since they can use cellular data. Everything else I agree with.
Horror, American waistlines will look like in 1960-ties.
It’s the Venezuela diet. A little brown rice and – occasionally – a zoo animal. You can never be too rich or too thin.
“So perhaps you need to read the current version of the tax bill that has been released before you say it will all go to the rich.”
Gee, only AGI under $400,000 to $500,000 can use it.
$200,000 to $250,000 individual
With 100% of that going to people who itemize.
Lovely
All he needs to do is ratchet up the standard deduction, big-ly. If people in suburban Chicago want to pay $300,000+ annual pensions for their school superintendents via local property taxes, then it’s on them. Examples: Mary Curley – Hinsdale 181 and Tim Kilrea – Lyons Township HS 204 (Lagrange).
It’s already 29200 for married filing jointly. So you need to *beat* that in itemized deductions before it matters.
So if your SALT is 20K you still need another 10K worth of deductions before it gets higher than the standard deduction.
I think it’s no coincidence the number was set at 30K, virtually the exact same amount as the standard deduction for married couples.
Who misses Kmart? And those blue light specials …
No one. Horribleist store ever. Made Walmart look like Saks Fifth Avenue.
I miss the old ladies squawking those announcements over the loudspeakers.
This will be felt immediately and widely. Trump commences to own very visible outcomes. Flashy foreign jaunts with (claims of) agreements make neat TV spots, but do not bring relief to Joe Consumer. The fastest middle class tax relief, which looks like a nice number for me (plastered on the front of this tax bill, to garner attention, versus the fine print and long term impacts) won’t be felt until next Spring. Will it equal the extra payout from new inflation, or maybe just leave me flat? But the Dems shouldn’t be foolish enough to think their lack of traction will bode well in ’26, just by default. That is what they mistook in ’24.
Mish, As per the current bill, the $30,000 would have an income cap so that only taxpayers with AGI under $200,000 to $250,000 can use it. (Joint x2) So perhaps you need to read the current version of the tax bill that has been released before you say it will all go to the rich.
“So perhaps you need to read the current version of the tax bill that has been released before you say it will all go to the rich.”
Gee, only AGI under $400,000 to $500,000 can use it.
$200,000 to $250,000 individual
With 100% of that going to people who itemize.
Lovely
It’s not as bad as you think.
The standard deduction for Married filing jointly was 29200. To itemize you’d need to *beat* that number to make it worth while. So if your SALT was say 20K (property taxes) you’d need to be able to itemize another 10K just to beat the standard deduction.
I suspect it won’t help near as many people as everyone thinks.
So a married couple with $400k income could deduct $30k in state and local taxes? That’s pretty generous given that the tax reform in Trump’s first term traded elimination of most SALT deductions for lower rates. Even in CA, $400k household income is about 93rd percentile. Whether that’s “rich” depends on who you’re asking.
The rate-of-change in the money supply has increased by 7 percent since the bottom in inflation last year.
Yeah, I noticed that too. It’s like Trump and Powell actually have an agreement, where Powell is actually loosening, while allowing Trump to say bad things about him, so that people don’t think he’s under Trump‘s influence. I’ll bet Bessent is behind us.
I drove from Carlsbad CA to Orange CA on the 5 yesterday, about 75 miles. I saw exactly 2 tractor-trailers with containers. Trade has stopped.
75 miles is not the entire country. thats a rather small sample set for such an absolute statement “Trade has stopped”.
perhaps it could be rephrased. Semi-trailer traffic was light during my trip. Neither Carlsbad or Orange are port cities.
It’s still pretty wild though, since that stretch of highway indicates low freight volume not only to and from the ports of southern California, but also low freight volume going and coming in and out of Mexico.
So you’re not from SoCal and have no clue how much tractor-trailer/container movement is normal. Got it. Here’s a clue: 2 containers is Covid-level.
Wait, I thought China paid for these tariffs? Trump said that the money was flowing in from China.
Do I detect a hint of sarcasm….
I belive the whole tariff idea is a cynical handout to unions. The idea is diabolical that all this manufacturing will return to the US so that middle class factory workers holding their union cards will return to some sort of 1950’s lifestyle where every worker can afford an 1100 square foot ranch house, mom stays home taking care of the kids. Some sort of wholesome fantasy land.
happy days was a funny sitcom. go potsie
Bring back smoking everywhere to complete the picture.
The money supply, means-of-payment money, the 2-year rate-of-change in money flows, was restricted for 4 years during the GFC.
12/1/2004 691.6
11/1/2008 701.8
In contrast, Powell has only restricted the money supply for 2 years:
8/1/2022 5217.9
7/1/2024 5222.2
So, you can’t expect the same collapse in housing in C-19 vs. the GFC.
Mike, I can’t speak for the East Coast, but LA County has about 10,000,000 people and the average salary is under 90k. Maybe you should have mentioned that when you also mentioned the 200k number.
Just report honestly even when it doesn’t dovetail with the story you want to tell.
And we have a $12 billion deficit projected for the next fiscal year, which Newsom is blaming on Trump for upsetting the applecart. Newson is also blaming the tariffs and calling th ebeating CA is going to have to take as the “Trump slump”.
Trump doesn’t have to worry about tariff prices, now or in the future: he’s a billionaire.
And he gets free planes and amazing crypto promotions.
Trump knew that a negligible percentage of his voters are smart enough to even understand what “regressive taxes” mean. If they don’t know what it means, they have a much harder time opposing an idea. Trump is really good at manipulating people who are smart, but even better manipulating those with fewer intellectual tools in the belt.
Keeping those folks aroused in anger has worked wonders. Just generate enemies and scapegoats, at zero marginal cost (or at taxpayer expense).
The solution is obvious, have Qatar, Saudi, UAE gift the american people dates, figs, pomegranates, olives, oranges, lemons, etc. Why didn’t the greatest deal maker make that deal?
I love pomegranates. I started a tree/bush about 4 years ago. Got 4 fruits last year. Looking like a lot more this year!
Great article, Mish. LOL on the solutions. One interesting note about the super Walmart here in my town – they have the produce divided in sections & labeled as to origin, avocadoes from US w/lower price, avocadoes from MX w/higher price, limes from Spain only w/a v high price, etc. But so far, they are the ones that have in general kept the prices down the most out of all the grocery stores in this area.
Does Walmart still have those circus tent tryouts in Bentonville for potential vendors? Whatever is cheapest is what goes on the shelves, wherever it came from, how ever it got there.