Walmart gets dressing-down from China after pleading with suppliers to absorb tariff costs: report
Chinese officials gave Walmart a dressing-down this week and warned of legal consequences after the retailer reportedly pressured China-based suppliers to bear the cost of tariffs, according to a report.
Authorities summoned Walmart executives to meet with them on Tuesday after receiving complaints that the discount chain was pushing Chinese suppliers to cut their own prices and absorb costs from President Trump’s 20% levy, according to The Wall Street Journal and a source familiar with the matter.
“Walmart’s purpose is to help people save money and live better,” a spokesperson told The Post in a statement. “Our conversations with suppliers are all aimed at making our purpose a reality for millions of customers, and we will continue to work closely with them to find the best way forward during these uncertain times.”
The spokesperson said Walmart has a “strong” business in China.
Economists have warned that President Trump’s stiff tariffs could reheat inflation, and firms have raised concerns about having to take on extra costs associated with importing products and parts from China.
To avoid hiking prices, Walmart has reportedly been pleading with some Chinese suppliers, including kitchenware and clothing manufacturers, to slash their prices as much as 20%, Bloomberg previously reported.
The talks have been held with several manufacturers, though few have agreed to the hefty price cuts, according to Bloomberg.
So on Tuesday, Chinese officials asked Walmart representatives to explain what the company was doing, and said it would be unfair and irresponsible to make Chinese suppliers pay for the tariffs, according to the Journal.
Officials even warned Walmart that asking suppliers to cut their own prices might violate contracts and disrupt market order, and referred to potential legal consequences, sources told the Journal.
“If Walmart insists” on making Chinese suppliers absorb costs linked to the tariffs, “then what awaits Walmart is not just talk,” state broadcaster China Central Television said on Wednesday.
Walmart executives reportedly said they would work with Chinese suppliers to find ways to avoid damaging their interests, and emphasized the importance of its Chinese business and suppliers, the report said.
Chinese officials also reportedly told Walmart executives that Chinese consumers who shop at Walmart could easily find alternatives, the Journal said.
Shares in Walmart slipped 2.6% on Wednesday.
Walmart operates more than 300 Walmart and Sam’s Club stores in China – a small, but growing, division for the company.
The retailer reported about $5 billion of net sales in China in the most recent quarter – up 28% from the year before. It accounted for less than 3% of its total global revenue.
