Will Trump's tariffs hurt Walmart?

Walmart is the biggest retailer in the world. But tariffs — especially those against Canada and Mexico — could weaken one of America's strongest brands.

The retailer's stock price dropped last week after an executive said Walmart is "not going to be completely immune" to President Donald Trump's new tariffs, said NBC News. Chief Financial Officer John David Rainey tried to reassure investors, pointing out that about two-thirds of the brands are "sourced" in the United States, making them off-limits to trade taxes. The tariffs on America's neighbors have been delayed, leaving analysts unsure what comes next. The company would "do what we know how to do" to keep prices down, said Rainey.

Even so, "uncertainty about the state of the American consumer" means Walmart is preparing for 2025 to be a challenging year, said The Associated Press. Tariffs could "threaten the low-price model that is the core of Walmart's success." Even with Walmart's ability to "hedge" against inflation, "some goods may have price increases."

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What did the commentators say?

Walmart's warning could be a "bad omen for the consumer sector," said Andrea Felsted at Bloomberg. The world's biggest retailer has a "better chance than most competitors of minimizing" the impacts of tariffs on consumers because it can "get the best deals from suppliers." Given those advantages, the company probably wanted to "under-promise in the hope of overdelivering" on profits. Still, it's worth noticing the "tariff clouds on the horizon."

"Shoppers have flooded" into Walmart during the post-pandemic inflation crisis, said Nathaniel Meyersohn at CNN. But other retailers have "less leverage and may have to raise prices for consumers" as tariffs kick in. Walmart's own sales remain relatively strong for now, but its warning to investors of a "slower 2025" is a "bad sign for America's economy," Meyersohn said. And it's a "signal for the rest of the retail industry that 2025 will be a rockier year."

What next?

Walmart's guidance to investors "may have more to do with weight-loss drugs" than Trump's tariffs, said MarketWatch. The company has acknowledged that the sale of GLP-1 medications like Ozempic and Wegovy have "slightly helped sales for their pharmacy businesses," said Modern Retail. The problem is that research shows consumers "cut their grocery spending by about 6%" after they start taking the drugs. That can lead to big drops in the sales of "calorie-dense, processed items like chips."

What happens next depends on shoppers. The "consumer decides" whether tariffs matter or not, former Walmart U.S. CEO Bill Simon said to CNBC. If Trump imposes a fee on Mexican avocados, consumers will have to decide: will "you have guacamole with your chips or do you have salsa and queso where there is no tariff?" He said Walmart — and other super-sized retailers like Costco, Target and Amazon — will be OK. "Those guys will figure out tariffs."