Treasury Secretary Scott Bessent responds to Walmart’s CEO saying prices will rise for Americans because of Trump’s tariffs.

Washington

Walmart has announced that it will be raising prices on some goods, attributing the decision to tariffs imposed on Chinese imports. The company's CEO stated that despite efforts to keep prices low, the scope of the tariffs, even at recently reduced levels, creates cost pressures that cannot be fully absorbed due to narrow retail margins. As a result, some of the increased costs from tariffs will be passed on to consumers.

In response, President Trump suggested via social media that Walmart should absorb the tariff costs rather than pass them on to consumers. Treasury Secretary Scott Bessent addressed these comments, noting that while Walmart will absorb some of the tariffs, some costs may still be transferred to shoppers. Bessent indicated that this situation reflects the broader economic reality that taxes, including tariffs, can be inflationary.

Secretary Bessent also highlighted recent economic indicators, mentioning that inflation has decreased under the Trump administration and that gasoline and service prices have also dropped. He referenced a conversation with Walmart's CEO, who identified gasoline prices as a significant concern for customers. Bessent concluded that overall inflation is expected to remain steady, but acknowledged consumer concerns following periods of higher inflation in recent years.



Bessent on costs from tariffs: ‘Some may get passed on to consumers’

Walmart announced this week it's going to have to raise prices on some goods, and they blame Trump's tariffs, particularly the tariffs on China. Here's the CEO. Take a listen. We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins. We're positioned to manage the cost pressure from tariffs as well or better than anyone. But even at the reduced levels, the higher tariffs will result in higher prices. So President Trump went on Truth Social and says Walmart should eat the tariffs. In other words, not pass on the prices to consumers. Doesn't that inherently serve as an acknowledgement that tariffs are essentially attacks on consumers? Because initially, President Trump said, well, other countries, you know, that's not true. Countries pay for the tariffs. But here we have a perfect example. The countries, China gets these tariffs and then Walmart has to raise its prices and consumers end up paying for them. Well, Jake, in essence, what you're saying is you're saying taxes are inflationary. So let's pass the Trump tax cuts and that'll be disinflationary. If we continue that line of thinking. I know that you can put me on as endorsing anything, but go ahead. Well, let's just keep everything consistent. I did speak to Doug McMillan, who I have a very good relationship yesterday, just to understand what he had to say. And, you know, understand that came from an earnings call. They are on an earnings call because of SEC requirements. They have to give the most draconian case. So Walmart will be absorbing some of the tariffs. Some may get passed on to consumers. But the other thing that's happening is that inflation is down. We had the first drop in inflation in four years under President Trump. The other thing that Doug mentioned to me is for his consumers, for his buyers, the most important thing are gasoline prices. And this administration has gotten gasoline prices down. Service prices are down. So overall, I would expect inflation to remain in line. But I don't blame consumers for being skittish after what happened to them four years under Biden. We had the worst inflation in 40 years.

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