Walmart Says Trump’s New Tariffs Could Raise Prices

WalmartKCFO John David Rainey said the retailer would likely have to raise prices on some items if President-elect Donald Trump’s proposed tariffs go into effect.

“We never want to raise prices,” he said in an interview with CNBC on Tuesday. “Our model consists of everyday low prices. But there will probably be cases when prices for consumers will increase.”

Rainey added that it is too early to say which products may become more expensive due to the tariffs.

Walmart’s CFO ponders a possible change in policy. As the company beat Wall Street’s revenue and sales expectations and raised its full-year forecast.

Walmart’s comments are the latest warning from U.S. retail leaders about a possible blowback from the duties. During Trump’s presidential campaign, he said he would impose tariffs of 10% to 20% on all imports, including higher levies of 60% to 100% on goods from China.

In a statement earlier this month, National Retail Federation CEO Matthew Shay described the across-the-board tariffs as a “tax on American families.” He said it would “drive inflation and price increases and result in job losses.”

The possibility of a price hike comes as inflation eases as consumers tighten their wallets in the US.

Other retailers and brands have also spoken out about the potential downsides of the tariff. Elf Beauty CEO Turang Amin told CNBC in an interview earlier this month that the company may be forced to raise prices if higher duties are imposed. A shoemaker Steve Madden Said it will do Imports from China should be cut by 45% over the next year to try to avoid the fiscal impact.

Most of the goods are sold by Walmart. Are not at risk of tariffs. About two-thirds of the items Walmart sells are made, grown or assembled in the United States, Rainey said.

He said that like other companies, Walmart has tried to import from different parts of the world instead of relying more on China or any one country. Rainey added that tariffs imposed during the first Trump administration caused the company to adjust.

“We’ve been living in a tariff environment for seven years, so we’re quite familiar with it,” he said. “The tariff, though, is inflationary for consumers, so we want to work with suppliers and our private brand assortment to try to lower prices.”

Like Walmart, Lowe said it has also taken steps to diversify its supply chain. The home improvement retailer focused on potential levies as it reported earnings on Tuesday.

That comes about 40 percent of the company’s cost of goods sold, CFO Brandon Sink said. From outside the US, including direct imports and merchandise from national brands. He said the tariffs would “definitely increase product prices,” but added that “the timing and details are uncertain at this point.”

“We believe we are well prepared to respond when and if that happens,” he said.

— CNBC’s Gabriel Fonrouge contributed to this report.