Walmart Warns of Price Hikes on Food, Tech and Toys, Blames Tariffs

Walmart warned that it will raise prices on food, electronics and toys later this month, citing increased costs from tariffs. 

Walmart CEO Doug McMillon commented on the price hikes on Thursday’s earnings call. McMillon said that the big box retailer is unable to absorb the costs of higher import taxes, despite the recent reduction of duties on Chinese goods. Earlier this week, President Donald Trump made a temporary 90-day truce with China to lower the 145% tariff to 30% on goods and products sent to the US. 

Walmart is the largest importer of container goods in the US, with approximately 60% of its imports coming from China. McMillon also noted that tariffs on countries like Colombia, Costa Rica and Peru will put price pressures on food imports, including bananas, avocados and coffee. 

The announcement comes as US shoppers are already feeling the sting of higher prices. In April, consumer sentiment fell for the fourth straight month. 

Economists fear that widespread uncertainty around trade policy and the possibility of higher inflation will drive down demand, causing businesses to pull back on investment and cut costs. That can have a ripple effect that weakens the broader economy. 

Walmart did not immediately respond to CNET’s request for comment. 

Inflation could get stickier 

Walmart is only one example of higher retailer prices, along with other companies such as Microsoft. 

Though consumer prices only rose 2.3% annually in April, the slowest pace in years, experts say the impact of tariffs hasn’t caught up yet. Supply shortages and higher duties can set off steeper inflation, as importers generally pass on price hikes to consumers. 

On Monday, the US Federal Reserve released a statement on the economic outlook. Fed Governor Adriana D. Kugler said the country is “likely to experience lower growth and higher inflation,” adding that “there could also be significant effects on productivity” over time that lower economic activity across the country. 

Over the last few months, economists have warned that the combination of higher inflation and lower economic growth could create a “stagflation” scenario. 

The administration’s on-again, off-again tariff agenda is likely to have a volatile effect on consumer prices and spending patterns in the near future. 

You can monitor daily changes with CNET’s tariff price tracker. For advice about whether to buy or wait to buy popular tech items, check out CNET’s guide.