Staff Reporter

Walmart is urging its Chinese suppliers to lower prices, with the goal of absorbing the new tariff costs instead of passing them on to consumers.

This strategy is part of Walmart’s efforts to maintain its pricing power amid increasing competition from other retailers vying for budget-conscious shoppers.

According to Bloomberg, the retail giant has requested that Chinese suppliers—particularly those manufacturing clothing and kitchenware—reduce their prices by around 10% for each round of tariffs, taking on the full cost of President Trump’s tariffs. This information comes from sources familiar with the situation.

However, few suppliers have agreed to Walmart’s request. Many are already operating on extremely tight margins due to Walmart’s approach of sourcing goods at low prices to maintain its competitive edge.

Some suppliers have indicated that any price reduction exceeding 2% would lead to losses. Others have faced pushback from their own suppliers, who are unwilling to cut prices by more than 3%.

This has led some manufacturers to explore sourcing components from Vietnam, raising concerns that lower prices might compromise product quality.

Walmart first asked manufacturers for price cuts when President Trump’s initial 10% tariffs on Chinese goods went into effect in early February.

Last month, Walmart’s shares fell sharply in response to a bleak earnings forecast for the year, which did not take into account the potential effects of these tariffs.

The retailer did express concerns about the uncertain geopolitical climate and rising interest rates.

Other major U.S. retailers are also sounding alarms about the trade war. Target noted on Tuesday that tariffs and a sluggish consumer environment are impacting its full-year outlook.

The CEO mentioned during an investor call that he is actively engaging with vendors to address these challenges.