Last week, Walmart became the latest high-profile national retailer to announce that Donald Trump’s trade tariffs were poised to push consumer prices higher. In fact, the price hikes are poised to reach the public very soon: David Rainey, the behemoth’s chief financial officer, told CNBC on Thursday that Walmart would likely start rolling out tariff-related price hikes “towards the tail end of this month, and I certainly expect more in June.”
As The Washington Post reported, the president did not take the news well.
President Donald Trump over the weekend admonished Walmart for warning that his tariffs could force a price increase, urging the world’s biggest retailer to simply absorb the consequences of his trade war. … The president responded Saturday, posting on his social media platform, Truth Social, that Walmart should ‘EAT THE TARIFFS’ and ‘not charge valued customers ANYTHING.’
In the same online missive, the Republican added, “I’ll be watching,” though he didn’t elaborate as to what he intends to do if he sees Walmart taking steps he disapproves of.
I can appreciate why this might seem like an overwrought observation, but I happen to think this one oddly worded statement might be the most interesting thing Trump has said this year about trade policy.
When it comes to the president’s approach to the issue, he has repeatedly pushed a simple claim: Foreign counties pay the tariffs. That’s never made any sense, and everyone who’s ever taken an Economics 101 course has tried to explain how absurd this belief is, but Trump — whose capacity for confusion about the basics of trade policy is endless — has nevertheless clung to the assertion, telling the public that tariffs on China, for example, lead Beijing to put money in American coffers. That’s long been absurd, but the Republican has long been impervious to the policy details.
Trump’s latest online statement, however, gives away the game: He apparently now realizes, at least on some level, that his tariffs are responsible for pushing Walmart’s costs higher, and the retailer now intends to push its prices higher as a result.
The president wants Walmart to simply “eat the tariffs” — meaning, Trump wants the company to profit less in order to accommodate the tariff-related costs. Time will tell whether Walmart follows the White House’s lead.
But either way, the truth is laid bare: If foreign countries were paying the tariffs, Walmart wouldn’t be feeling any cost pressure, and the company wouldn’t feel the need to raise prices. There would not be additional costs for Walmart to “eat,” to borrow Trump’s phrasing.
If this sounds at all familiar, there’s a good reason for that. As my MSNBC colleague Clarissa-Jan Lim recently noted, Amazon considered a plan in which the online retailer would show consumers additional costs generated by the president’s policy of tariffs. The White House immediately freaked out — press secretary Karoline Leavitt accused Amazon of carrying out “a hostile and political act” — and the whole endeavor quickly collapsed. But again, the dust-up itself served as a reminder to Trump that it’s American businesses and American consumers that feel the pinch from his tariffs. It was against this backdrop that Senate Minority Leader Chuck Schumer spoke on the Senate floor in late April, calling on companies to do what Amazon was prepared to do. “To the large businesses that sell to consumers, I say: Show your customers how much tariffs are hurting in their pocketbooks,” the New York Democrat said. “People deserve to know the impact tariffs have on their finances. … And it’s also small businesses: They don’t want to get blamed for hiking prices when Donald Trump’s tariffs have put them in a terrible position — in a position that says, raise your prices or close your doors. They hate doing either.” A week later, congressional Democrats introduced legislation to codify this idea into law, unveiling a bill that would require retailers to display costs that reflect Trump-imposed increases. Although the legislation will never be seriously considered in a Republican-led Congress, the effort itself should be part of an educational campaign for the president, which seems to be working, slowly but surely.
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past."
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