President Trump is shifting the pressure to big companies to deal with rising costs from his tariff plan, leaning into populism as a tactic to sell his trade policy to Americans.
Trump blasted Walmart on Saturday, saying the retail giant should “just eat the tariffs” because it “made billions of dollars last year,” and, in the process, undercutting his argument on the campaign trail that trading partners such as China will pay the tariffs.
White House press secretary Karoline Leavitt said Monday that China will absorb the costs and called Walmart’s warning about price increases as early as next month “the most dire” forecast.
The president urging retailers to not hike prices marks his latest strategy to avoid the blame with consumers for cost increases, even as CEOs and economists have warned about them.
“Having done something which is, I think everyone agrees, going to be very damaging on lower income Americans— these are highly regressive taxes— he now wants to appear to be on their side and align himself with the American consumer against the big, evil corporations,” said Douglas Holtz-Eakin, president of the center-right American Action Forum.
“The trouble is, it won’t work,” he added. “It’s like being opposed to gravity. … They have a 3 percent margins in retail, and this is a 30 percent tariff. They cannot possibly eat the entire tariff.”
The administration eased up on the trade war with China last week, lowering tariffs on imports from 145 percent to 30 percent for 90 days. Beijing, in response, matched the 115-point cut, lowering its retaliatory tariffs from 125 percent to 10 percent.
Even with just the 30 percent in place, Walmart CEO Doug McMillon said in an earnings call that the company isn’t “able to absorb all the pressure” from the tariffs, announcing plans to increase prices as early as June.
Along with calling on Walmart to “eat” the extra costs, Trump issued a warning: “I’ll be watching, and so will your customers!!!”
“Trump is working the refs, as he always does, forcing businesses to consider both the economic costs and political costs of options,” one longtime lobbyist said.
A second lobbyist, who is familiar with the retail sector, noted how tight margins are for stores of all sizes.
“Retailers, large and small, are in the same boat. If the cost of putting items on their shelves increases, they must raise prices to profit from their tight margins. It’s a simple business: buy and sell stuff for a profit. Without the profit part, it’s not a business,” that lobbyist said.
In fiscal 2025, Walmart reported an operating income of more than $29 billion, which is about a 4.4 percent profit margin on revenue of $674.5 billion. It also imported about $49 billion worth of goods from China last year, which means a 30 percent tariff should be a roughly $15 billion hit.
Holtz-Eakin said Trump is “picking on the guys with the lowest margins” by calling out retailers to cover the cost for consumers.
“Both the wings of both the parties have this populist bent. … They don’t respect the private system of private enterprise, and they don’t rely on it to deliver the material wealth of the nation to the consumer. So, it’s entirely consistent with that,” he said. “And he’s been leading the Republican Party in that direction for or years now. He was a lifelong Democrat. He still has the instincts of one.”
Other companies have also announced price hikes due to the tariffs, including Mattel, Ford, Temu and Shein. Microsoft said it plans to increase the recommended retail prices of Xbox video game consoles and some controllers.
Meanwhile, Home Depot is an exception, with Chief Financial Officer Richard McPhail telling CNBC it intends “to generally maintain our current pricing levels across our portfolio.”
A former Commerce Department official in Trump’s first term argued Trump is mistaken about how to protect hardworking Americans, noting that 62 percent of U.S. adults own stock.
“Because Walmart is one of the most widely held retail stocks and it is a part of nearly everyone’s 401(k) or IRA account, he is, in effect, asking Walmart to send the bill to their shareholders,” the former official said. “That’s actually worse than telling little girls to only have two dolls. It’s telling autoworker retirees to live on less.”
“Shark Tank” investor Kevin O’Leary agreed that retailers are not going to “eat the tariffs,” even if Trump wants them to. Instead, he expects both customers and retailers to shoulder some burden of the cost increases.
“There’s going to be some distribution of the pain between increased prices, and retailers will take some of the hit, but it really depends what the hit is,” he said in an interview on NewsNation’s “The Hill.”
“We don’t know — is it 10 percent, 20 percent, 25 percent? What is it? Nobody knows.”
When Trump pitched the idea of tariffs on the campaign, he said they are a way to stop being ripped off by foreign countries and argued other countries pay tariffs, not U.S. consumers. The idea of reciprocal tariffs was for trading partners to be charged what they charge the U.S., Trump said.
“This is one of the most important days, in my opinion, in America’s history,” Trump said on “liberation day” on April 2. “It’s our declaration of economic independence.”
The “reciprocal” tariffs on trading partners were then paused a week later, for 90 days, amid pressure from Wall Street and Republicans because of the turbulence in the stock market. But when he initiated the pause, Trump imposed a 10 percent tariff on all foreign nations other than China.
The administration has been in talks with trading partners since the 90-day pause took effect, and Treasury Secretary Scott Bessent warned Sunday that tariffs on trading partners could go back to the April 2 rate if they don’t engage in good-faith negotiations.
Bessent, though, was not completely on track with Trump. He said on CNN’s “State of the Union” that he spoke to McMillon after the Walmart earnings call and added that he’s also calling on companies to absorb some of the tariffs. But, he warned consumers will feel a hit as well.
“Walmart will be absorbing some of the tariffs, some may get passed on to consumers,” Bessent said.
