Arthur J. Villasanta – Fourth Estate Contributor
Bentonville, AK, United States (4E) – President Donald Trump’s trade war on China will eventually force Walmart, Inc, the world’s largest grocery retailer and the world’s largest retailer by revenue, to increase the prices of most of the goods it sells at its more than 11,700 stores in the United States.
A letter sent by Walmart to the Trump Administration warns that Trump’s growing tariffs on China will result in price hikes to many of the products Walmart sells. The letter said these Walmart price hikes might harm the economy as shoppers avoid purchases or reduce the amount of groceries they buy. Walmart instead urges the U.S. and China to reach an agreement to avoid the new Trump tariffs to be imposed on Jan. 1, 2019.
Walmart’s position was seconded by former Walmart CEO Bill Simon, who said Walmart’s been able to absorb a lot of the pricing so far. The question facing Walmart now is how long can they can keep doings that and whether it actually should.
Simon predicts Walmart will start to hike prices soon (perhaps by early October) in response to the harmful effects of Trump’s trade war against China. Walmart and hundreds of other American retailers and other businesses have written letters to U.S. Trade Representative Robert Lighthizer protesting Trump’s rising tariffs on Chinese goods.
“As the cost of goods go up in any other way or any other model, the costs are mitigated and they are passed through,” said Simon. “You’ll see Walmart start to do that soon.”
Analysts said many products sold at Walmart and other stores owned by the company are imported from China. Many of these items are on Trump’s current tariff list and practically all of them will be when the latest 10% tariffs take effect today and 25% on January 1, 2019.
Analysts said that since Walmart is a huge source of cheap products for low income customers over the years, this really hurts the very people that Trump professes to help.
Walmart also warned Trump that his tariffs on China will hurt its efforts to promote American businesses. The company said it plans to invest $250 billion into U.S. businesses by 2023, but warns the tariffs will hurt U.S. manufacturers importing their products from China.
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