Yahoo Finance

Walmart, the world’s largest retailer, said President Donald Trump’s tariffs are “too high” and it will raise prices on some items as Trump’s global trade war increases the company’s costs.

“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Walmart CEO Doug McMillon said Thursday on an earnings call.

“The higher tariffs will result in higher prices,” he said.

Tariffs on China are raising costs on electronics and toys, McMillon said, and some food costs are going up from tariffs on Costa Rica, Peru and Colombia.

The price hikes will begin later this month.

“I’m concerned that consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June,” Walmart finance chief John David Rainey said in an interview with CNBC Thursday.

Many companies have been raising prices to mitigate cost increases from the 10% universal tariffs on every product entering the United States and higher levies on Chinese goods. Washington and Beijing reached an agreement to lower those tariffs this week, but the United States still charges a 30% levy on most goods coming from China.

Walmart applauded the Trump administration for bringing down its 145% tariff levels on China, but said the current levels of tariffs are “too high.”

“There are certain items, certain categories of merchandise that we’re dependent upon to import from other countries,” Rainey said on the call with analysts. “Prices of those things are likely going to go up. And that’s not good for consumers.”

Trump risk

Tariffs have already made mattresses, toys, strollers and other products more expensive.

The Federal Reserve said last week that tariffs have led to a 0.3% increase in prices this year. Some companies are increasing the prices of all of their products. Others are hiking targeted items in their catalogs. Many are just eliminating the products that will cause sticker shock rather than try to sell at prices either customers won’t buy or competitors will undercut, companies and analysts say.

Price hikes could put Walmart in an uncomfortable position with Trump. Companies typically communicate why they need to raise prices, but Trump has made doing so a political risk.

The White House took aggressive aim at Amazon last month after the company considered displaying the added cost of tariffs on some items. Trump placed a call to Amazon founder Jeff Bezos about the site’s plans, and White House Press Secretary Karoline Leavitt called Amazon’s plans a “hostile and political act,” while holding up a picture of Bezos in front of news cameras. Trump also threatened Mattel last week after the toymaker said it planned to raise prices because of tariffs, saying in the Oval Office that he might levy a 100% tariff on the company’s toys and suggested the company should remove its CEO.