Donald Trump tries to contain the effects of its chaotic economic and commercial policy on the economy through pressures and intimidation to companies. This Saturday, the president of the United States put in the spotlight to the giant of the Walmart distribution, the company with the greatest turnover in the United States, which recently warned that it was dedicated to raising the prices of some of its products as a result of the increase in costs derived from tariffs imposed by Trump to imports. Trump asks him to “eat” tariffs, to assume them on their margin and do not transte the increase in costs to their customers.
“Walmart should stop blaming tariffs as a reason for the increase in prices throughout the chain,” the president wrote in Truth, his social network. “Walmart won billions of dollars last year, much more than expected. Between Walmart and China they should, as they say, ‘eat the tariffs’ and not load anything to their valuable customers. I will be attentive, and its clients too!”, He added.
Trump capitalized in the elections the discontent of the working class with the price increases during the mandate of Joe Biden, in what was a global phenomenon in the pandemic recovery period. However, by declaring the commercial war to the entire world, it has caused inflation expectations to be triggered and consumers’ confidence sinks.
Walmart, a thermometer of the consumption of the Americans, faced the inflationary crisis after the pandemic with market share gains thanks to its low price policy, but this week it warned in the presentation of its quarterly results that it would have to raise the prices because of the tariff It was unsustainable, so he decided to rectify and turn back without China making any concession of opening his market, beyond withdrawing the reprisals he had taken against Washington.
“We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs, even with the reduced levels announced this week, we cannot absorb all the pressure given the reality of the narrow retail margins,” said Walmart CEO, Doug McMillon, analysts at the conference on the results of the first quarter of their fiscal year, closed on April 30.
Walmart says that two thirds of what it sells in the United States is manufactured, mounted or cultivated in the country, but also has many foreign suppliers. “The products that we import come from all over the world, from dozens of countries. Apart from the United States, the other large markets are China, Mexico, Vietnam, India and Canada. China, in particular, represents a large volume in certain categories, such as electronics and toys,” the head of the distribution giant developed. “All tariffs are pressure on costs for us, but the highest tariffs on China are the ones with the greatest impact. The pressure on the costs from all markets affected by the tariffs began at the end of April and accelerated in May,” he added.
Walmart maintained its sales and benefits estimates for the whole year, but decided not to offer forecasts on the operational and net benefits of the second quarter due to the impossibility of predicting with certainty “commercial negotiations, which change every week and, in some cases, every day,” the company declared in a statement issued on Thursday. “The lack of clarity that exists in the dynamic current operational environment makes it extremely difficult to make forecasts in the very short term,” was justified.
At the conference with analysts, the company explained how it is managing the impact of tariffs. “We want to keep the prices of food and consumer products as low as possible. Food prices in the United States have risen in recent years and our customers have noticed it. We will not allow tariff pressure on some general items to exercise pressure on food prices. However, in regard to food, tariffs imposed on countries such as Costa Rica, Peru and Colombia are exerting pressure on imported products such as bananas, avocados, coffee and roses.
The Executive explained that among the measures that Walmart is taking is to control the amount of fresh food waste. In some cases, he said, he is maintaining retail prices despite tariff pressure. He gave as an example the case of Mother’s Day Flowers in his Sam’s Club shopping club. As for the categories of general products that are affected, the company will try to transfer production when possible.
“In some cases, we will absorb the costs within a category or department and we will not simply have the cost of tariffs attributable to each article individually. We will manage the combination of items, categories and businesses,” McMillon explained.
Walmart also has suppliers that are changing component materials affected by tariffs, such as aluminum, fiberglass, which is not subject to tariffs. “Our merchants, the supply team and the suppliers are being creative. It has been impressive to see how our team identifies opportunities and adapts,” he said.
“We are in a position to manage tariff pressure so well or better than anyone. But even with reduced levels, higher tariffs will cause a price increase,” said the manager. The word tariff, which Trump said in his day that he was the most beautiful in the world, spoke 53 times at the conference of presentation of the results to analysts.
While Trump presses companies so that prices are not uploaded, he insists on attacking the president of the Federal Reserve, Jerome Powell, so that interest rates, although that could precisely cause inflation to get out of control. It is not clear if he does it for his limited economic knowledge or trying to find an scapegoat for the evils that he has inflicted on the US economy.
“The consensus of almost all is that ‘the Federal Reserve should lower interest rates as soon as possible’. Too late Powell, a man famous for always arriving too late, will probably put the leg again, but who knows?” Trump wrote in Truth, his social network, distorting the facts again.
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