Trump warns big business: eat my tariffs or pay the price

Cnn
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President Donald Trump sends a strict warning to corporate America: he will use his bullying pulpit to publicly shape companies that dare to increase prices due to tariffs.

After Walmart announced last week to increase a few prizes for high costs for the global trade war, Trump reacted in a social post of truth on Saturday and requested Walmart.

“Walmart should stop trying to accuse tariffs as the reason for increasing prices throughout the chain,” said Trump. “As I said, you should” eat the tariffs “between Walmart and China and not charge an estimated customer. I will watch, as well as your customers !!!”

The revocation was the third reference to the White House of a large American company, which discussed the possibility of increasing prices due to the strong costs for tariffs.

On April 29, after Amazon reported on the price listed on his stretching platform, an additional tariff fee, the press spokesman for the White House, Karoline Leavitt, kept a photo of the Amazon chairman Jeff Bezos at a press conference and called The move an “enemy and political act”. Trump, whom a high -ranking civil servant described as “sour”, called Bezos to complain, and said that the company's founder solved the problem very quickly.

Amazon said, even though it was considering reporting the tariff costs, the plan was ultimately not approved and “did not pass”.

A week later, on May 6th, Trump threatened a 100% tariff for Mattel after the Maker of Barbie and Hot Wheels announced that they would increase prices. Ynon Kreiz, CEO von Mattel, said Trump's tariffs will not bring toy production to America, since toys could not be produced in America and can still be Sold at affordable prices.

“We don't see that,” Kreiz told CNBC after Mattel warned that the tariffs would increase the toy prices for American consumers.

Trump shot back from the Oval Office and threatened the company and its CEO.

“We will set his toy 100% tariff and he will not sell toys in the United States, and that is her biggest market,” said Trump. “I wouldn't want him as a manager for too long.”

Trump's demands have so far seemed to be aimed at large companies and their significant profits – the mantra of former President Joe Bidens of populist “greedflation”, which accused the company, which increased the prices for using the inflation crisis during the majority of its term.

“Walmart earned billions of dollars last year, far more than expected,” Trump released on Saturday on social media. This is exactly Walmart is America's largest retailer and had a strong 2024 on the back of inflation-conscious customers who are aiming for their notoriously low prices.

Walmart, however, is more of a function of its massive scale than artificially high prices. As a percentage of sales, Walmart's operating result was just a little more than 4%in the last quarter. The net profit margin was less than 3%rasier knife thinning according to business standards.

Nobody believes that Walmart, the world's largest company that is measured by the income, will soon go into the arm house, and Trump is probably right that the company is “eating” a lot or the entire tariff costs and in the long run. But CEO Doug McMillion does not work for Trump – he works for Walmart's shareholders who demand the yield stability and growth.

So last week McMillion said that Walmart would eat some – but not all – from the tariff costs. In order to keep his tiny margins tight, the company would have to pass on some of them to customers.

“We will do our best to keep our prices as low as possible. In view of the magnitude of the tariffs, even at the reduced levels announced this week, we cannot put pressure on the reality of the tight retail margins,” said McMillon on Thursday in a profit call. “We are positioned to manage the cost pressure of tariffs or better than any other. But even at reduced levels, the higher tariffs lead to higher prices.”

Despite Trump's angry call for Bezos, his threat of tariffs against Mattel and his warning to Walmart, other American brands will almost certainly follow the example. If Walmart – whose entire business has been built up at the achievement of a massive extent and the dominance of the supply chain – cannot avoid passing on the costs to customers, which business can then? Investors will watch HOME DEPOT this week and give themselves very closely to create more signs of trade war pain and perhaps higher prices.

Higher prices come to America, and even bullying can not be stopped by the president.