WASHINGTON — Treasury Secretary Scott Bessent indicated that Walmart may need to pass some costs from President Donald Trump’s tariffs onto consumers, potentially leading to price increases at the largest retail chain in the U.S. Bessent’s remarks follow a conversation with Walmart CEO Doug McMillon just a day after Trump cautioned the company against raising prices and pledged to monitor its actions closely.
While Bessent sought to allay fears about rising inflation, he acknowledged that Walmart is unlikely to fully absorb the costs of the tariffs as requested by Trump. He noted in interviews that the decline in gasoline prices, averaging about $3.18 per gallon, is more relevant to consumers than the tariffs. This gas price drop contrasts with increases noted in the past week.
“Walmart will have to absorb some of the tariffs, although some costs might be passed on to consumers,” Bessent said on a national news program. “I expect inflation to stabilize, but I understand consumer apprehension following the record high inflation seen last year under the previous administration.”
Walmart representatives did not offer comments regarding Bessent’s take on their discussion. Trump took to social media to reiterate that Walmart should not charge customers more to cover the new tariff costs, warning that he would be watching closely.
On a recent earnings call, Walmart stated they had a responsibility to disclose potential worst-case scenarios related to tariff impacts, a move Bessent suggested was to avoid legal repercussions. Nonetheless, executives from the retailer noted noticeable price hikes on shelves in recent weeks.
Chief Financial Officer John David Rainey pointed out that while Walmart strives to keep prices low, there are limits to what any retailer can absorb. The company has observed a trend of rising prices since late April.
Bessent also commented on a recent downgrade of U.S. government debt by Moody’s, asserting that it reflects past conditions rather than current economic realities. He emphasized that the financial markets had already anticipated these developments, as the federal debt has ballooned to approximately $36 trillion.
Concerns remain over Trump’s proposed tax plan, which could increase deficits by about $3.3 trillion over the next decade, as estimated by the Committee for a Responsible Federal Budget. Bessent defended the administration’s position that economic growth would outpace debt accumulation, despite skepticism from independent analysts regarding these claims.
The Trump administration is currently engaged in discussions with 40 major trading partners to finalize tariff rates ahead of a July deadline and is in the initial phase of a 90-day negotiation with China. Following recent adjustments, tariffs on Chinese goods will be lowered from 145% to 30%, facilitating continued discussions.
“Strategic uncertainty is part of our negotiating approach,” Bessent remarked, suggesting that offering too much certainty could undermine the U.S.’s position in discussions. He asserted that concerns from small business owners about tariffs largely reflect previous rates applied to Chinese imports, highlighting a pervasive atmosphere of uncertainty affecting consumers and businesses alike.
