Walmart CFO Says They Don't Want To Raise Prices, But 'Prices Will Go Up For Consumers' Due To Upcoming Tariffs

Walmart’s CFO, John David Rainey, recently said that if President-elect Donald Trump's proposed tariffs take effect, Walmart WMT will need to raise prices on certain items.

Speaking with CNBC, Rainey explained, "We never want to raise prices. Our model is everyday low prices. But there probably will be cases where prices will go up for consumers." 

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These proposed tariffs include a 10-20% tax on all imports and could go as high as 60-100% on products from China. Retailers like Walmart, AutoZone, Lowe's and others are already speaking out about how these potential changes could make everyday goods more expensive for customers.

The majority of goods Walmart sells are not at risk of tariffs, as about two-thirds of the items sold by Walmart are made, grown or assembled in the U.S. However, tariffs may have a major effect on the remaining one-third of imported goods. In recent years, Walmart has been expanding its supply chain by sourcing from other countries to lessen its reliance on China.

Lowe's CEO Marvin Ellison also expressed concern, saying they're talking to suppliers to understand how the tariffs might affect prices.

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Other companies are also taking measures to deal with the tariffs. AutoZone AZO CEO Philip Daniele, for example, has recently stated that if tariffs are imposed, they will pass those costs onto the consumers. Because AutoZone anticipates the impact on their margins, they even plan to hike prices before the tariffs go into effect. Similarly, Steve Madden intends to shift some of its production to Vietnam, Cambodia and Mexico to lessen its dependency on Chinese production, though price increases are still possible.

Columbia Sportswear COLM has also raised concerns, with CEO Tim Boyle mentioning that the company may also have to raise prices. The National Retail Federation also predicted price rises for commonplace goods like apparel, shoes and furniture, warning that these tariffs essentially tax the American people. They anticipate that a $100 coat may increase by up to $21, while a $90 pair of sneakers might cost between $106 and $116.

Dollar Tree DLTR, which imports many of its products from China, may have to rethink its fixed-price-point model of $1.25 per item if tariffs push costs too high. This could jeopardize the retailer’s value-focused business strategy by forcing it to either absorb the additional expense or pass it on to customers.

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