In This Story
Walmart is reportedly pushing its Chinese suppliers to absorb the costs of U.S. tariffs.
Bloomberg, citing anonymous sources familiar with the matter, said the retail giant has requested significant price cuts – up to 10% – from manufacturers in China to mitigate the impact of President Donald Trump’s tariffs. However, the move has faced resistance from many suppliers, including those in the kitchenware and apparel sectors, who argue that further price reductions could jeopardize their profits. Thus far, few suppliers have agreed to Walmart’s (WMT-1.27%) demands, the sources added.
Some have pushed back, with certain vendors refusing to accept price cuts over 3%. In response, some manufacturers have considered sourcing materials from other countries, such as Vietnam, to offset the rising costs, according to Bloomberg.
A Walmart spokesperson told Quartz in an email that the company will keep working with its suppliers. They also emphasized the importance of all parties working together “to find common ground.”
At a time when U.S. consumers are expected to bear the brunt of the tariff burden, Walmart’s push highlights the strain the trade war could place on global supply chains. The company’s attempt to pass tariff costs onto its suppliers also underscores the financial challenges retailers face.
This is not the first time Walmart has asked its Asia-based suppliers for price cuts, according to the sources. However, in the current climate, Walmart’s bargaining power has diminished, causing suppliers to question whether absorbing the costs is worth maintaining their partnership with the retailer.
Walmart, one of the leading U.S. retailers, has previously indicated that it would likely raise prices on everyday goods. While U.S. Treasury Secretary Scott Bessent suggested that Chinese manufacturers would “eat” the costs, retailers like Target and Best Buy (BBY+4.39%) have already warned consumers to expect price increases as a result of the tariffs.
In late February, CEO Doug McMillon acknowledged that sky-high food prices were causing “frustration and pain” for shoppers, particularly those at “the lower end of that scale.” He added that consumers, already stretched thin by rising costs, are being forced to make difficult choices, with many opting for smaller packs of consumer goods.