Walmart's announcement of a price increase at the end of May, due to the new US tariff policy, led to a 4% drop in its stock price.

Taiwan • Business • 12h ago
Walmart's announcement of a price increase at the end of May, due to the new US tariff policy, led to a 4% drop in its stock price.

On May 15th, 2025, American retail giant Walmart announced that due to the Trump administration's new tariff policy, the company will raise the prices of some products starting from the end of May. CEO Doug McMillon stated that in the face of import tariffs as high as 30%, the company cannot fully absorb the cost pressures. After the announcement, Walmart's stock price fell more than 4% in early New York trading.

Key Updates

12h ago

Walmart's announcement of a price increase at the end of May, due to the new US tariff policy, led to a 4% drop in its stock price.

On May 15th, 2025, American retail giant Walmart announced that due to the Trump administration's new tariff policy, the company will raise the prices of some products starting from the end of May. CEO Doug McMillon stated that in the face of import tariffs as high as 30%, the company cannot fully absorb the cost pressures. After the announcement, Walmart's stock price fell more than 4% in early New York trading.

05/15 21:54

Jim Cramer, a financial commentator, says Walmart shows resilience amid the pressure of US-China tariffs.

Well-known financial commentator Jim Cramer mentioned on CNBC that despite the high tariffs imposed by the United States on Chinese goods, Walmart and two unnamed retailers remain competitive. Walmart reported earnings of 61 cents per share in the first fiscal quarter of 2025, which exceeded expectations. Walmart tackled tariff pressures by adjusting its product mix and maintaining supply chain flexibility. Its advertising and subscription services offer additional revenue streams, with approximately two-thirds of its products being sourced from the United States, which helps reduce the impact of import tariffs.

05/15 18:56

U.S. and China Reach Tariff Agreement: Talks in Geneva Lead to Substantial Tariff Reductions, Alleviating Pressure on U.S. Consumers and Finances

In the middle of May 2025, during high-level talks in Geneva, Switzerland, the US and China reached an agreement on tariffs, temporarily easing the trade tensions that had been ongoing since early April. The US reduced tariffs on Chinese goods from 145% to 30%, while China reduced tariffs on US goods from 125% to 10%. This 90-day agreement aims to alleviate pressure on US consumers and financial market volatility, and create room for further bilateral trade negotiations.

05/15 04:56

The tariff truce between the US and China has caused a 300% increase in container bookings between the US and China, and Hapag-Lloyd anticipates continued growth in volume.

On May 12, 2025, the United States and China reached a 90-day tariff ceasefire agreement, substantially lowering punitive tariffs, resulting in a rebound in the trans-Pacific shipping market. According to Vizion data, container bookings for imports from China to the U.S. surged by nearly 300% within a week after the agreement took effect. Hapag-Lloyd reported that bookings on U.S. routes increased by 50% compared to the same period the previous week, and transportation demand is expected to continue rising in the coming weeks, reflecting the swift release of trade demand that had been stifled by high tariffs.

05/14 18:27

Revealing the Share of Chinese-Made Products in the US Market: Dependence on Imports Ranging from Everyday Items to Home Appliances

Data from the United States International Trade Commission and the Department of Commerce shows that even amid U.S.-China trade tensions and high tariffs, China remains one of the major sources of imports for the United States. In 2024, a significant portion of home goods imported by the U.S. were made in China, including 90% of cookware, 66% of tableware, and 87% of refrigerators. As of March 2025, China was the third-largest source of imports for the U.S., with total imports exceeding $1030 billion. Despite the impact of tariffs, China's leading position in the U.S. market remains unshaken, indicating the U.S.'s dependence on Chinese manufacturing.

05/14 15:25

US and China Announce 90-Day Tariff Ceasefire; The $6.5 Trillion in US Treasury Bonds Maturing in June Attracts Market Attention

On May 14, 2025, following the economic and trade talks between the US and China in Geneva, the announcement of a 90-day tariff truce was made. The US will lower tariffs on Chinese goods from 145% to 30%, and China will reduce tariffs on US goods from 125% to 10%. The US's $6.5 trillion national debt is due to mature in June, raising concerns in the market about the risk of default. Experts believe the chances of a US debt collapse are low but advise investors to monitor exchange rate fluctuations and risks related to capital flows.

05/14 10:59

US and China Reach a Temporary Tariff Agreement, Beijing Lifts Ban on Boeing, Market Reacts with Caution

On May 14, 2025, the US and China reached a 90-day agreement on tariffs in Geneva, agreeing to significantly lower punitive tariffs. The Chinese government subsequently lifted the ban on receiving Boeing aircraft, allowing the resumption of deliveries and easing Boeing's delivery crisis in the Chinese market. However, experts note that the core issues of the trade war remain unresolved, and businesses still face uncertainty.

05/14 02:25

Inflation pressure in the U.S. is easing, but the impact of tariffs has not yet been observed. Forecasters are warning of potential price increases in May or June.

April inflation data in the U.S. indicates that the annual growth rate has dropped to 2.3%, marking a four-year low, which is below expectations. However, economists believe that the Trump administration's high tariff policies have not yet been fully reflected in prices, due to companies stockpiling inventories and the lagging effects of tariffs. The impact is expected to become evident in May or June. Federal Reserve officials remain cautiously watchful of future price trends, and the market is closely monitoring upcoming data to assess the impact of tariffs.

05/14 01:54

CNBC commentator Jim Cramer breaks down the effects of Trump's temporary tariff delay policy on the market's rebound.

Former President of the United States, Donald Trump, announced a temporary suspension of new tariff measures on China and other trade partners, which led to a market rebound. CNBC commentator Jim Cramer analyzed this policy reversal, pointing out that tech stocks benefited and market expectations were disrupted. Cramer described it as a "game of chicken without any winners," posing risks for short-term traders and highlighting the subtle interaction between policy and the market. This move might be intended to avoid an economic slowdown caused by tariffs, which could impact the Federal Reserve's ability to lower interest rates. The tariff pressure on businesses has been temporarily eased, and limited market supply and strong earnings reports also contributed to the stock market rebound.

05/14 01:54

U.S. inflation dropped to 2.3% in April, easing concerns over stagflation and leading to expectations of interest rate cuts.

According to data released by the U.S. Department of Labor on May 13, 2025, the annual CPI increase rate for April dropped to 2.3%, the lowest level since February 2021, which was below the expected 2.4%. The core CPI annual increase rate stayed at 2.8%, meeting expectations. This data shows that inflation has been slowing for three consecutive months, raising market expectations for a Federal Reserve interest rate cut, temporarily easing the risk of stagflation. However, uncertainty surrounding tariff policies could still impact future inflation trends.

Tariff Pressure Forces Price Adjustments

Walmart CEO Doug McMillon stated during the earnings call on May 15 that since the end of April, the cost of import tariffs on goods from China and other countries has risen rapidly, having a significant impact on the company's operations. He said, "We will do our best to keep prices stable, but at the current tariff levels, even after being reduced from 145% to 30%, we still cannot fully absorb these costs."

McMillon emphasized that Walmart's retail profit margins are already low and cannot bear such a significant increase in costs, so the company will have to pass some of the pressure onto consumers. He urged customers to be mentally prepared, expecting price adjustments to begin at the end of May and further expand in June.

Broad Range of Affected Product Categories

According to Walmart CFO John David Rainey, the price increase will affect a wide range of imported goods, particularly electronics and toys from China, as well as fresh foods from Central and South American countries like Costa Rica, Peru, and Colombia, including bananas, avocados, coffee, and roses.

Rainey noted, "If you haven't felt the price increase yet, it will happen soon." He added that the price of some items, such as bananas, has already risen from 50 cents per pound to 54 cents, indicating that the price increase has already been reflected in some items.

Public Statements from the CEO and CFO

During the meeting, McMillon stated, "Our goal has always been to provide customers with the best prices, but in this tariff environment, we have to make tough choices." He also mentioned that the company is negotiating more favorable procurement terms with suppliers and considering adjusting the supply chain layout to reduce future cost pressures.

Rainey added, "Our team has done its best to absorb some of the costs, but at this level of tariffs, retailers cannot bear all the pressure alone. This is a reality we have to face."

Rapid Stock Price Reaction

Following Walmart's announcement of the price increase, the market reacted quickly. On May 15, the company's stock price fell more than 4% during early trading in New York. According to reports, as of midday, Walmart's stock was priced at $95.52 per share, a decline of 1.35%. This decline reflects investors' concerns about future retail costs and consumers' ability to spend.

Although Walmart's first-quarter earnings report showed a 4.5% growth in same-store sales, exceeding the market expectation of 3.9%, the overall revenue was $165.61 billion, slightly below the expected $165.84 billion. This is the first time since February 2020 that revenue has missed the target, indicating that even with stable sales performance, cost pressures still pose a challenge to profitability.

Background and Scope of Tariff Policy

The trigger for this price adjustment is the new round of tariff policies implemented by the Trump administration since April. Although the US and China reached a temporary agreement in mid-May, reducing tariffs on some Chinese goods from 145% to 30%, Walmart executives believe that a 30% rate is still much higher than what is bearable.

In addition, tariffs on Central and South American countries have also been raised, further increasing the cost of imported food. Walmart stated that although about two-thirds of the company's products come from the US and are not affected by tariffs, imported goods still occupy an important proportion, especially in electronics, toys, and fresh categories.

Consumer and Market Reactions

Walmart's announcement of price adjustments has caught consumers' attention. According to reports, some consumers expressed dissatisfaction with the impending price increase, believing it will worsen inflationary pressures, especially against the backdrop of prices having risen more than 20% in recent years.

Nevertheless, Walmart emphasized that it will strive to maintain stable prices for essential goods and provide consumers with more price options through "Rollback" promotions and private label products.

References

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