Alert – Walmart issues dire warning to customers about prices

Walmart is telling customers that prices of some items could rise in their stores if President-elect Donald Trump’s plan to hike tariffs takes effect.

The warning came from the company third quarter earnings results, which saw the retail giant post 5.5 percent revenue growth, along with a 27 percent surge in global ecommerce sales.

‘We never want to raise prices,’ Walmart CFO John David Rainey said on the earnings call on Tuesday. ‘Our model is everyday low prices. But there probably will be cases where prices will go up for consumers.’

Rainey said it was too soon to determine which products in particular could be affected.

Though, experts told ABC News that electronics, clothes and toys will likely become the most expensive under an elevated tariff environment since most of these items are imported. 

Rainey said that about two-thirds of the items the big-box retailer sells are made, grown or assembled in the United States.

That means all of those goods wouldn’t be subject to the Trump tariffs, which many economists believe will reignite inflation.

Walmart has warned customers that prices at their stores could go up thanks to Trump’s new tariff plan

In his first term, Trump also implemented tariffs, though they started off at a much smaller in scale than what he is proposing now.

In January 2018, he ordered tariffs on imported washing machines and solar panels. 

Months later, he did the same with steel and aluminum, but left carve-outs for Canadian and Mexican imports.

Trump escalated the trade war with China specifically in August 2019 when he announced he would impose on 10 percent tariff on $300 billion worth of Chinese-made products.

President Joe Biden kept those tariffs in place throughout his tenure and decided to increase some of rates on $15 billion of Chinese imports, CNN reported in September.

In this trading environment, retailers like Walmart have already set out to diversify where they import goods, Rainey told investors.

‘We’ve been living under a tariff environment for seven years, so we’re pretty familiar with that,’ he said. ‘Tariffs, though, are inflationary for customers, so we want to work with suppliers and with our own private-brand assortment to try to bring down prices.’

But what Trump is floating now is entirely different from he and Biden oversaw during their respective presidencies.

Both President-elect Donald Trump and current President Joe Biden have overseen a regime of tariffs over the last seven years

Trump is proposing a 60 percent tariff on all Chinese goods, and a 10 percent ‘across-the-board’ tariff on all $3 trillion worth of US imports. 

A May report from the Peterson Institute for International Economics, a non-partisan think tank, estimated that these levies will cost middle-class families at least $1,700 a year.

Trump’s aggressive trade proposals would cost consumers at least $500 billion a year – or at least 1.8 percent of GDP – according to the institute.

That is roughly five times the cost of the US-China trade war Trump kicked off in 2018. 

Retail expert Neil Saunders, Managing Director of GlobalData, told DailyMail.com that Trump’s tariff proposals would cause ‘an enormous headache’ and add significant additional cost for retail.

‘Despite Trump’s assertions to the contrary, tariffs are paid by the companies or entities importing goods and not by the countries themselves,’ he said. 

‘This means the cost of buying products from overseas, whether directly or as an input for manufacturing, would rise sharply.’ 

Tariffs could also jumpstart inflation again, according to liberal economist Larry Summers.

‘There is a very substantial risk that the president will attempt to implement what he talked about. If he does, the consequences are likely to be substantially greater inflation than what was set off by the excessive Biden stimulus,’ Summers said.

This comes as the Federal Reserve is in the middle of a policy pivot on interest rates.

Liberal economist Larry Summers warned that inflation is still not fixed and that the next Trump administration could make things even worse

After keeping the federal funds rate at 5.25 percent to 5.5 percent from July 2023 to September 2024 to keep drive down inflation, the Fed has put forth two cuts since September.

Its most recent 25 basis point cut brought rates down between 4.5 percent and 4.75 percent.

Summers called this both an ‘astonishing’ and ‘huge’ mistake, similar to when the Fed was late to raise rates three years ago.

‘I am fearful that the Fed is going to be more like once burned, twice burned, rather than once burned, twice shy, on inflationary risks,’ he said.

It remains unclear how Fed Chair Jerome Powell, who is expected to be allowed to keep his post until his term ends in 2026, will respond to Trump’s new tariffs.