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Walmart has warned clients to expect higher prices despite the latest agreement between the US and China to reduce the penalty fees set in Donald Trump’s trading war.
The largest retail in the world is particularly exposed to the US president’s trade war. China and Mexico are its largest sources of imports, which in total constitute a third of its goods in the US.
Washington and Beijing agreed this week for a 90 -day tariff reduction, temporarily reducing tariffs for Chinese imports to about 40 percent, from 145 percent.
Doug McMillon, Walmart’s chief executive, said the return was not big enough to remove prices in the future.
“We will do our best to keep our prices as low as possible, but given the size of the tariffs, even at the reduced levels announced this week, we are unable to absorb all the pressure given the reality of narrow retail margin,” he said in the prepared remarks.
McMillon was one of the retail chiefs to argue against the White House tariffs, warning Trump for higher prices and empty store shelves.
The first quarter of the year lasted an unstable time for the US economy, as Trump quickly decided and changed tariffs for its trading partners. The 145 percent fee in China came into force on April 9.
McMillon’s warning came as Walmart reported an annual increase of 4.5 percent in comparable sale in its US business in the first quarter, exceeding the 3.7 percent increase in Wall Street analysts, according to a visible Alpha survey.
The retailer held his financial instructions for the full year, which includes a 3 to 4 percent projection of net sales. However, she kept instructions on profits in the second trimester, citing the uncertain appearance of trade.
