There’s no denying it now: Tariffs are raising prices

Now, there’s no denying it: Tariffs are raising prices

Donald Trump’s pitch to Americans on the campaign trail last year included a simple (and simplistic) promise: lower prices on Day One. Even if he didn’t mean it literally, it’s now Day 115, and the results of his only significant economic policy show that the opposite is happening. Thursday brought an avalanche of data that all point to one outcome: Prices are going up. Just ask Walmart. If there’s one company in the world that could theoretically take tariffs on the chin, it’s the world’s biggest retailer, which can (and does) use its scale to pressure suppliers to keep prices low for shoppers. But Walmart said Thursday that US tariffs — as a reminder: those are taxes that American businesses pay on imported goods — are too high, and it is raising prices in response. “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.” Walmart has no political incentive to do this — in fact, it’s taking a risk by so publicly tying its price hikes to tariffs, something that Amazon and Mattel learned the hard way tends to enrage the president. And this is not a story of corporate greed run amok, because Walmart would be foolish to try to gouge its customers at a time when economic anxiety is high (more on that in a moment). This is just what happens when a government puts 10% baseline tariffs on all imports. The money has to come from someone’s pocket, and that someone is generally the company importing the things or the consumer buying the things, or both.