Shares in U.S. retail giant Walmart (WMT) were up marginally today despite being slammed by Chinese suppliers for passing on tariff costs.
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Shoulder the Burden
According to an article in the South China Morning Post, U.S. retail giants are demanding that their Chinese suppliers shoulder between 50% and 66% of the cost of U.S. import duties following President Trump’s tariffs.
According to some estimates Walmart imports 60% of its goods from China.
The Post said that U.S. retailers have been locked in talks with Chinese producers for weeks over how to handle the additional costs caused by the trade war. This comes as U.S. firms face intense political pressure to keep prices stable.
Indeed, responding to comments from Walmart that it would have to hike prices because of the extra cost of coping with tariffs, it was told by Trump that it should instead ‘Eat the Tariffs.’. Since then, other U.S. retailer such as Costco (COST) have been more muted in their comments regarding tariffs.
Dearer Dolls
What will disappoint Chinese suppliers is the declaration from Walmart and other major U.S. retail groups that they would not bear the full cost of the tariffs when they asked their Chinese suppliers to resume shipments in late April. This is again according to industry sources who spoke to the Post.
Back at home in the U.S. prices have already been hiked in Walmart stores, with pictures of in-store products going viral on social media. These have been shared by shoppers and even Walmart employees.
These price rises include a $10 rise in dolls, a $25 rise in fishing reels, a $5 rise in tape and a $2 increase in Play-Doh.
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