China increases pressure on Walmart: Higher prices for US customers threaten

China increases pressure on Walmart: Higher prices for US customers threaten

Walmart believed that his power as the largest retailer in America was able to use the Chinese suppliers to cover the costs of the tariffs imposed by President Donald Trump. But the answer was not the usual: no.

background of the tariffs

Trump has raised tariffs of 20 % to all goods imported from China. This measure hits retailers such as Walmart, who receive many products from China and sell them to American consumers at the lowest possible prices. Walmart has tried to push his Chinese suppliers to reduce prices, but the Chinese government is uncooperative.

reaction of the Chinese government

The strong reaction of the Chinese government illustrates how American companies are caught in the middle of an escalating trade war between the USA and China. Experts warn that it could be difficult for Walmart to keep prices low when the Chinese government intervened. If even a powerful company like Walmart has difficulty stabilizing prices, it becomes even more difficult for significantly smaller companies.

Chinese official reports The request of the company revealed that some Chinese suppliers should reduce their prices by up to 10 % per round of American tariffs.

Walmart tense between tariffs and prices

A Walmart spokesman said that the company's goal was to help people save money and live better. "Our conversations with the suppliers pursue the goal of realizing this concern for millions of customers, and we will continue to work with them to find the best way in these uncertain times," says the speaker.

Walmart is faced with the choice of increasing prices and thus taking the risk of a negative reaction from American consumers, or putting the suppliers under pressure and the anger of the Chinese government. This reaction contradicts the prediction of US Finance Minister Scott Bessent, who recently stated that the Chinese manufacturers would "tolerate" the tariffs and the prices for US consumers would "not rise."

The effects of tariffs on consumers and retail

The tariffs come at a challenging time for US consumers and the retail industry and could increase the pressure. Buyers reduce their expenses for Airnahren , large hidinginry projects, clothing and Snacks . The issues of the US consumers were significantly weaker than expected In February, retail sales increased by 0.2% compared to the previous month, according to the US Ministry of Trade.

Walmart and its position in international trade

Walmart has long used its size and negotiation power to reduce the prices for consumers. However, Walmart's strategy to keep prices low by the Chinese suppliers are forced to concessions is susceptible to resistance from the Chinese government. It is estimated that Walmart obtains about 20 % of his goods from China.

"This is a national explanation, none of suppliers. China could have signaled that now is over," said Joseph Jurks, founder of the ABC Group, an advisory company that helps companies manage their supply chains in Asia. "Trump speaks of tariffs against China. China could have drawn a border."

Walmart and the influence of the Chinese government

This problem does not only affect Walmart's business in the USA. Walmart also has a strong retail promotion in China, including the Sam’s club branches. Last year the sales figures from Walmart in China 17 billion USD . Experts believe that the company's business in China could be badly damaged if the Chinese government continues to exert pressure

Nevertheless, Walmart is in a better position to deal with tariffs than many other companies, explains Michael Baker, analyst at the financial company da Davidson. This is because two thirds of what Walmart sells is manufactured in the USA. For imports, Walmart has a wide basis for suppliers in over 70 countries and is therefore not exclusively dependent on China.

retaliation against American companies

The reaction of the Chinese government on Walmart is another form of pressure against the USA and American companies. China has a New round of retaliation

In addition, the Chinese government announced a wide package of economic measures last month that the United States is targeting. The national market regulatory authority of China has announced that it will initiate investigations against Google for suspected violations of the anti -miles laws. The company, whose search engine is not available in China, has hardly any activities in the country.

The Chinese Ministry of Finance also set the PVH Corporation, the parent company of Calvin Klein and Tommy Hilfiger, on its "unreliable companies" list, in fact a blacklist from companies. The US Biotech company Illumina has also been added. PVH criticized the decision and explained that the Chinese authorities would work to clarify the situation.

Adding to the list of "unreliable companies" could prevent PVH from doing business in China or leading to punishments or other sanctions, according to experts.

This article was also made up by CNN journalists John Liu and Juliana Liu.