US Retail Giant Walmart Blames Trump's Tariffs for Rising Costs

The retail giant of the United States, Walmart has said that US tariffs are driving up its cost this year, squeezing its profit margins even as more customers visit its stores in search of affordable goods.

Walmart Blames Trump

Walmart said on Thursday that it had worked to hold down prices as US President Donald Trump's tariffs on trading partners have taken hold.

Nearly one-third of Walmart's US merchandise is imported from countries including China, Mexico, Vietnam as well as India.

The prices of the goods that the retailer sells are rising, however, as Walmart stocks up ahead of the holiday shopping season.

"The way things have played out so far, the impact of tariffs has been gradual enough that any behavioural adjustments by the customer have been somewhat muted," Doug McMillon, Walmart chief executive told analysts as the company reported second-quarter results on Thursday.

"But as we replenish inventory at post-tariff price levels, we've continued to see our costs increase each week, which we expect will continue into the third and fourth quarters."

The signs of tariffs affecting the retail giant come as investors mull over corporate reports and economic data for clues on whether duties will trigger a fresh jolt of inflation.

Jay Powell, Federal Reserve Chair is all set to make a speech at the central bank's Jackson Hole conference on Friday, in which he is also expected to provide his latest views on how import taxes are affecting US prices.

In the meantime, Trump has also insisted that the tariffs will not be inflationary and called for the Fed to drastically lower borrowing costs.

Walmart To Raise Prices

Walmart executives have warned that they would need to raise some prices this year to offset the cost of tariffs but these comments prompted a blast of criticism from Trump.

In the second quarter which ended in August, inflation increased 1.1% year-on-year inside Walmart's 4,600 US stores, more than double the rate in the previous quarter but well below the overall US inflation rate.

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