Walmart is the one of the first retailers to announce they are raising prices in their stores as a result of the new tariffs placed on goods imported from China. Most Americans, including President Trump, believe the tariffs are taxes China will pay directly to America for selling their products in our stores. That isn’t exactly true.
According to an article in The Atlantic, there is how Trump thinks tariffs work and how they actually do and the differences are going to cost American consumers unless you understand the basics.
In a tweet, President Trump wrote: “Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S.”
Unfortunately, what President Trump is saying here is fundamentally untrue. Tariffs are not paid to the U.S. by China and they most certainly are not paid in lump sums.
What is true is that the American consumer pays these tariffs to the U.S. Treasury. As written in The Atlantic piece, these “tariffs fall on the American importers of Chinese goods, who often pass those cost increases onto American consumers. That means every time Trump raises tariffs, he risks raising costs on families and businesses.”
That is why Walmart is sending out an SOS now and warning consumers that prices on the products they import will go up. These additional dollars and cents will cover the tariffs President Trump has put on thousands of goods Walmart imports from China. The products will cover everything you need to stock your next holiday barbecue this summer to bathing suits, auto parts for summer travel, camping gear and the school supplies you will buy for your children when the fall returns.
Walmart CFO, Brett Biggs, says the company will do all it can to keep on its quest to being the biggest, most affordable retail giant. “We’re going to continue to do everything we can to keep prices low. That’s who we are. However, increased tariffs will lead to increased prices, we believe, for our customers.”
Walmart customers won’t feel prices increases as much as they may when it comes to certain items because a great deal of their business comes from the sale of groceries, specifically produce and in recent years, Walmart has sought to use local growers, U.S. farmers and South America.
Customers will feel the price hike the most this summer as 84% of travel goods sold at Walmart come from China.
As the Trump administration looks to placing new tariffs on the remaining products imported from China, Walmart sees an opportunity in growing its online business, especially now that it is offering next-day delivery on most items. According to Walmart CEO, Doug McMillon, the company is resilient.
“We’re pleased with how we started the year,” said. “We have a stronger foundation in place with our stores, and we’re making good progress in e-commerce.”
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About the Author: Aisha K. Staggers is a writer, lecturer, political analyst and literary agent. She appears almost weekly for “Staggers State of Things” on the Dr. Vibe Show. Her work has been published by Paper Magazine, AfroPunk, The Spool, GREY Journal, MTV News, HuffPost, Blavity, Atlanta Blackstar, For Harriet, New York Review of Books and a host of other first-run publications and syndicated outlets. Find her on Twitter @AishaStaggers. For more of her work, check out her page here!