A Walmart store in Martinez, California, United States, on Monday, November 18, 2024.
David Paul Morris | David Paul Morris Bloomberg | Getty Images
WalmartFinance Secretary John David Rainey said retailers may have to raise prices on some items if President-elect Trump’s proposed tariffs go into effect.
“We never want to raise prices,” he told CNBC on Tuesday. “Our model is low prices every day. But for consumers, prices may go up.”
Rainey added that it was too early to say which products might be more expensive due to tariffs.
Walmart CFO weighs in on potential policy changes The largest U.S. retailer beat Wall Street’s profit and sales forecasts and raised its full-year forecast. Home improvement company Lowe’s Co., which reported earnings on Tuesday, also addressed the risks posed by the proposed tariffs.
The comments from Walmart and Lowe’s are the latest warnings from U.S. retail leaders about the possible negative impact of tariffs. During the presidential campaign, Trump stated that he would impose tariffs of 10% to 20% on all imported goods, with tariffs as high as 60% to 100% on goods from China.
During an earnings call, Lowe’s Chief Financial Officer Brandon Sink said about 40% of the company’s cost of sales comes from Goods from outside the United States, including direct imports and goods from domestic brands. He said the tariffs “will certainly increase the cost of the product,” but added that “the timing and details are still uncertain at this time.”
CEO Marvin Ellison said in an interview with CNBC that Lowe’s, like other consumer-facing brands and retailers, is worried about the risk of rising costs. He said the company is already having conversations with suppliers about “what-ifs for tariffs” while waiting to see what Trump’s policy changes will ultimately look like.
“We will not wait to take action,” he said. “We have plans in place. We have scenarios in place and we are working to understand the impact.”
The two companies are not the only major retail stakeholders to raise concerns.
In a statement earlier this month, National Retail Federation CEO Matthew Shea described sweeping tariffs as a “tax on American families.” He said this “will drive inflation and price increases and lead to unemployment”.
The prospect of higher prices comes as U.S. inflation has slowed after years of straining consumer wallets.
Other retailers and brands have also spoken out about the potential downsides of tariffs. Elf Beauty CEO Tarang Amin told CNBC earlier this month that the company may be forced to raise prices if higher tariffs take effect. footwear manufacturer Steve Madden talk Imports from China will be reduced by as much as 45% next year to avoid the financial impact.
Most items sold at Walmart No tariff risk. Rainey said about two-thirds of the items sold at Walmart are made, grown or assembled in the United States
He said Walmart, like other companies, is trying to import products from different parts of the world rather than relying heavily on China or any one country. Rainey added that tariffs imposed during the first Trump administration had caused the company to make adjustments.
“We’ve been living under a tariff environment for seven years, so we’re very familiar with it,” he said. “However, tariffs are inflationary for consumers, so we want to work with suppliers and our own private label brands to try to lower prices.”
—CNBC’s Gabrielle Fonrouge contributed to this report.
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