The tariffs announced since Donald Trump took office are already having an impact on various US markets, including Walmart. The supermarket chain announced that product prices will increase at the end of this month and further in June due to the costs incurred by the tariffs.
The tariffs, which average at least 10% on imported products and reach 30% or more for goods of Chinese origin, are putting significant pressure on the company's margins, which cannot fully absorb these additional costs.
Doug McMillon, CEO of Walmart, explained that more than 66% of products are produced, assembled, or grown in the United States, but his company still relies on imports from China, especially for household appliances and toys.
Taxes on products imported from Peru, Colombia, and Costa Rica are also affecting the cost of essential foods such as avocados, bananas, coffee, and others, which undoubtedly impact consumers.
John David Rainey, Walmart's chief financial officer, told the national press that shoppers will begin to see increases in purchases at the end of May and throughout June, a situation that will become more complex in the following months.
Walmart will strive to maintain competitive prices in the market, bearing a portion of the tariff increase; however, it acknowledged that this circumstance is unique due to its speed and scale. To mitigate the effects, the chain has implemented a series of measures, including reducing orders in higher-priced categories and substituting suppliers or materials, such as replacing aluminum with fiberglass.
The company constantly monitors customer responses, adapting its products to protect food from price increases and altering its purchases if demand decreases due to higher prices.
Despite market concerns, Walmart has decided to maintain its annual expansion targets for fiscal year 2026, anticipating a sales increase of between 3% and 4%. The company is confident it will be able to pass on a large portion of the additional costs to consumers without compromising its future profits.
It did not provide guidance on its upcoming quarterly results due to the uncertainty surrounding the trade and tariff environment. The United States is not the only country facing the effects of tariffs; in Canada, Loblaw's warned of a series of price increases as a result of the measures imposed by the U.S.
This circumstance raises concerns about the impact that rising prices will have on consumption, which is crucial for the economies of both nations, and poses threats to economic development in a context of signs of slowdown and risks of recession.
