Walmart plans to increase prices due to U.S.-China trade war
Published Thursday, May 16, 2019 6:35PM EDT Last Updated Thursday, May 16, 2019 7:14PM EDT
Walmart has said that it will be raising the prices of many of its products as a result of a trade war between two of the world’s largest economies.
On May 10, United States President Donald Trump hiked tariffs on Chinese-made goods by $200 billion and said that more tariff increases are on the way.
Walmart imports 26 per cent of its merchandise from China and warned that higher tariffs on imports will mean higher price tags for customers.
Retail expert Bruce Winder said that if Walmart is considering increasing the prices of their products, other stores will likely follow.
“It’s going to be across the board, pretty much all retails or almost all retailers will have to raise prices because the bottom line is they buy a lot of products come from China.”
Many retailers depend heavily on China for their supply chain, including electronics, clothing and footwear. Canada has already started to feel the effects of U.S. tariffs on steel, leading appliance stores to say that some items are starting to cost more.
“Washing machines, refrigerators, you know that $50 to $75 tariff that is being applied directly from the manufacturer has to be passed on to the consumers,” Brandon Corke from London Major Appliances said.
Some analysts feel the escalating trade war between the United States and China will be resolved, but say it’s not clear when.
“It’s probably going to drag on for a little while,” Winder said. “It could be a few weeks, it could be a few months. Eventually it’s going to be incredibly difficult for both countries to keep this up because both countries will suffer from inflation.”
The uncertainty has been rattling markets and making investors nervous. A BMO report said that a long-term trade war could lead to job loses, a lower dollar and a shrinking economy.
“The stock markets have been hit because there is so much uncertainty right now and you are going to see a lot of volatility in the markets I would argue continuing until this is wrapped up,” Winder said.
Walmart has not specified what type of price hike shoppers can expect.
With files from CTV News Toronto's Pat Foran and the Canadian Press