Walmart has announced that it will absorb some of the costs associated with recent tariffs, according to Treasury Secretary Scott Bessent, following a conversation with the retailer's CEO, Doug McMillon. This discussion occurred after President Donald Trump urged Walmart to "eat the tariffs" rather than increase prices for consumers.
During an appearance on CNN's "State of the Union," Bessent explained that while Walmart aims to minimize price hikes, the extent of the tariffs may necessitate some costs being passed on to consumers. McMillon had previously indicated in an earnings call that, due to the narrow profit margins typical in retail, the company cannot absorb all the financial pressures caused by these tariffs.
Trump reacted to McMillon's statements on social media, asserting that Walmart should not cite tariffs as a justification for raising prices, referencing the company's substantial profits in the previous year. Walmart responded by reaffirming its commitment to keeping prices low for consumers, despite the challenging economic landscape.
Bessent also noted that in discussions with McMillon, consumer concerns centered heavily on gasoline prices, which have recently decreased. The average national price for regular fuel was reported at $3.178, a decline from $3.592 a year prior. Bessent commented on consumer sentiment, attributing current uncertainties largely to past inflation trends experienced during the previous administration.
The dialogue surrounding tariffs and pricing strategies highlights ongoing concerns regarding inflation and its impact on consumer behavior in the retail sector.