China is turning up pressure on Walmart. That could mean higher prices for US customers

[BumRushDaShow]

Source: CNN Business

Published 5:00 AM EDT, Mon March 24, 2025


New York CNN — Walmart thought it could use its immense power as America’s biggest retailer to make Chinese suppliers eat the cost of President Donald Trump’s tariffs. But Walmart got a response it’s not accustomed to hearing: No.

Trump has slapped 20% tariffs — or taxes on imported goods — on all products coming from China. That’s put the squeeze on retailers like Walmart, which imports a lot of merchandise from China and sells those goods at the lowest price possible to American consumers. Walmart, in turn, has tried to pressure its Chinese suppliers to lower prices. But the Chinese government is having none of it.

The strong reaction from the Chinese government reveals how American companies are caught in the middle of an escalating trade war between the United States and China. While customers in the United States want low prices, that could be hard for Walmart to achieve if the Chinese government is stepping in, trade experts say. And if a company even as strong as Walmart struggles to hold down prices, it means that much smaller companies are going to be hurting, too.

Chinese officials said this month that they requested local Walmart executives speak to them following a report that the company had asked some Chinese suppliers, including kitchenware and clothing suppliers, to lower prices by as much as 10% for each round of US tariffs. “Our relevant departments have reached out to Walmart to further understand the situation, and the company has provided an explanation,” He Yongqian, a spokesperson for the Commerce Ministry, told a press briefing earlier this month, without providing further detail.

Read more: https://www.cnn.com/2025/03/24/business/walmart-china-tariffs/index.html

[LiberalArkie]

1. OMG are the Waltons going to find out that they are not the gods they thought they were?

[Born Free]

13. Reminds me of "The Man that said NO to Walmart"

One of my favorite articles was about Snapper lawmowers. The man who famously said "no" to Walmart was Jim Wier, the CEO of Snapper lawnmowers, who decided to stop selling his company's products at Walmart due to concerns about the long-term impact of Walmart's pricing and manufacturing demands to sell a lower quality product to meet the Walmart pricing demands.

[dutch777]

2. China has the advantage....even with a 20% add, its goods are still cheaper. We can't turn on new...

...manufacturing that fast or readily increase scale of production we do have and even if we do, price competition/lower overhead favors oversea competitors. Standing up a new manufacturing facility takes years. And whether new or just scaled up existing manufacturing, workers are still in short supply. I really think some of the non-sense Musk is pushing and the notions that get floated about cutting back on Social Security and Medicare is about maximizing number of people in the work force. From a business perspective the more workers looking for work means you can pay each one less, simple supply and demand. Of course Musk aside, AI may push enough folks out of old rote jobs to make this wish come true but by other means.

[Srkdqltr]

3. So if trump imposes tariffs on Chinese goods, chinese companies have to raise prices to Walmart. Walmart wants Chinese

Companies to lower prices. And that will happen? How about Walmart and all go to Trump? Because this is Trumps fault? Or is that too simple?

[Ol Janx Spirit]

4. Not exactly. The Chinese companies don't raise their prices; the tariff that Walmart has to pay to the US government

makes those goods more expensive for Walmart to import. So Walmart is asking them to take a cut in their pay to make up for it. And you can bet that they will make some concessions to keep their factories cranking out the cheap goods America wants--which will be in part a win for the Felon-47 Administration. Walmart will absolutely be playing both sides in this game and ask the Administration for carveouts and other special treatment and likely get them given their deep donor pockets. In addition, the last time tRump was in office they used taxpayer dollars to bail out farmers impacted by tariffs and the inevitable reciprocal tariffs and may very well do that again to keep domestic prices low while squeezing Chinese manufacturers. To further complicate things, China isn't the only place you can find a factory to produce any given cheap object or piece of clothing--so even more incentive for the Chinese companies to lower their prices. Keep in mind: this always comes at the expense of workers and not management or profits, so the immoral offshoot of all of this is to make millions of people's lives even less safe and much harder. Some companies will look at building factories in America to avoid the tariffs, but they will likely realize that the American worker isn't going to work for pennies-a-month and that the American public isn't going to tolerate the local environmental damage required to keep prices low enough and will just look elsewhere in the world to produce these goods. Maybe Russian or El Salvadorian prison labor--some of it suppled by the US immigration crackdown--will be a viable option. When an immoral person does anything you can bet that it will be in the least moral way possible and lead to bad things happening to people. We don't know what will exactly happen in this "trade war," but we can be assured that there will be a lot of casualties. Oh, and look for the immoral people to funnel any of the collected tariff money to themselves and their companies--not to the American citizens; that's a given....

[IbogaProject]

15. And foreign prices will likely increase beyond the tariffs as demand will fall proportionally

This is going to cause a depression, it did the last time when it was tried in the late 1920s.

[Ol Janx Spirit]

18. That's not actually historically accurate. The Great Depression started in 1929 while the Smoot-Hawley Tariff Act...

...wasn't enacted until June of 1930, so it could not have been the cause of the Great Depression. It may have exacerbated it--although even that point is in some dispute--but it did not cause it. The conditions we have in the world today are vastly different than they were in the 1920s, so it seems less likely that this type of monetary policy will lead to a depression, and they may not even lead to a recession. Tariffs have been such a huge instrument of economic policy worldwide for such a long time--tariffs were the primary funding mechanism of the federal government until the income tax began after 1913, and the second bill that George Washington signed was a tariff--that it is difficult to actually anticipate what will happen in the current climate. My point is that when Walmart uses their leverage to force Chinese companies to lower their prices to make up for the US-imposed tariff, the offshoot of that will fall heavily upon the workers that are already being exploited. The protectionist policies of the 17 and 1800s that were quite successful in standing up industries that America did not yet have really do not apply to today's world. And as the world's largest economy we may not even notice the real effects of it--just as we do not have to see the low-wage, child labor, and environmental destruction we currently promote in the rest of the world so we can have cheap disposable goods. It seems very likely that the real victims of this trade war will be the foreign workers--and possibly slave labor from our new El Salvadorian prison partner--offered up as fodder for our insatiable demand.

[GreatGazoo]

5. Weird headline. It is WalMart that is pressuring China.

WalMart built their business on redundant supply chain and hyper efficient logistics. Their heavy handed negotiation tactics are legendary among manufacturers and suppliers. Plenty of people have gone broke selling to WalMart.

They have major leverage in retail. For example it was WalMart that forced Nestle, ConAg and all the other major food processors to change their date codes to a format that could be read by customers --- "Best before 11/4/2024". WalMart did this to bankrupt smaller grocery chains and put pressure on larger ones. The strategy being that WalMart has the best logistics in retail and can move product before it hits those dates much better than anyone else can. Groceries are VERY low margin business and they all have to loss leader milk, bananas, eggs and other staples. WalMart gets sales in other departments from those who make frequent visit to buy groceries so they can loss leader groceries deeper and longer than grocery+pharm-only competitors and they have done so in markets where they want to push competitors out.

A rule in business is "Have at least two sources for everything which is critical to your business." So for WalMart that means having duplicate sources in India, Vietnam, Haiti, etc for almost everything they get from Chinese suppliers.

Lastly, a 20% tariff on the wholesale price does not equal a 20% increase in the retail price. If we look at Alibaba, we see, for example, a black leather belt with a metal buckle similar to one sold at WalMart and the cost is $1.10 FOB China. Other belts are $.067 to $0.85 each and that is more in line with what WalMart would pay due to the volume. That belt sells for $9.97 in a US WalMart store but the tariff of 20% is applied to $0.67 raising WalMart's cost by only 13-cents.

[BumRushDaShow]

6. The first sentence of the OP excerpt has this

New York CNN — Walmart thought it could use its immense power as America’s biggest retailer to make Chinese suppliers eat the cost of President Donald Trump’s tariffs. But Walmart got a response it’s not accustomed to hearing: No.

So at least at this stage of the game, I would say they are "still negotiating".

I would think this guy might say the same as an all-powerful entity -



(sorry, I had to do it )

[Bayard]

7. China is still the one paying those tariffs, right?

[BumRushDaShow]

8. No - it's the people who IMPORT from China who would pay

So those import brokers would need to decide whether to "eat" the cost or raise the price to the retail buyers.

The "effect" would be to *supposedly* cause the importers to "look elsewhere" for those desired goods/services (preferably "within the U.S." ).

But this country is too dependent on all that stuff made there and China basically "cornered the global market" for a whole pile of stuff because they paid their workers slave wages.

[Bayard]

10. I guess I forgot this....

[BumRushDaShow]

12. When I saw your

I figured that but... just in case.

[IbogaProject]

16. Their cost of living is lower which is called a Comparative Advantage

They also provide health care, University Education with out debt and they are actively funding their own infrastructure. Just the health care alone removes a lot of the economic friction our society suffers from. And yes I am aware that China uses colonialist policies in Tibet and Ugar and even have prison camps.

[BumRushDaShow]

17. A "new" class of the populace were only recently able to afford to purchase what they make

Recall the early days of Foxconn where they were paid less than $2/hr, some doing 12 hr shifts? There were "suicide nets" put around the exterior of the facilities -





Like Russia, China "discovered capitalism" and the benefits it provides to the oligarchs. So they created such a class of oligarchs who oversee shady manufacturers who would mix baby formula powder with powdered melamine (a plastic) to get each container to weight using less actual formula, and other nightmarish "practices". The difference there though is that they execute those they find who do that and get caught, no equivocation.

[Magoo48]

9. Alternatives

Needle and thread.
Sewing machines.
Local shops. Thrift shops.
Garage sales, church sales, rummage sales.
…

[Miguelito Loveless]

11. So, they are blaiming the coming 20% price increase

on the Chinese instead of Vice President Trump.

Noted.

[kimbutgar]

14. MAGA shop at Walmart and they can't blame President Biden now for those tariffs and higher prices.