Walmart, the nation’s largest retailer, announced last week that it will raise prices on a wide range of products, citing the financial strain imposed by President Donald Trump’s tariffs on imported goods, particularly those from China. The company warned that consumers could see higher prices as soon as the end of May, with even more significant increases expected in June.

Walmart CEO Doug McMillon explained during a Thursday earnings call that while the company has worked to keep prices low, the magnitude of the tariffs, even at recently reduced levels, makes it impossible for Walmart to absorb all the additional costs.

“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” McMillon said.

The price hikes are expected to impact a broad array of items, including groceries, school supplies, home goods, and toys.

Former President Trump, who has consistently claimed that the burden of tariffs falls on exporting countries rather than American consumers, responded sharply to Walmart’s announcement. Taking to his Truth Social platform on Saturday, he criticized the company, writing:

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump posted. “Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, “EAT THE TARIFFS,” and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”

Throughout his presidency, Trump repeatedly claimed that tariffs on imported goods, especially from China, would be paid by foreign countries and would not affect American consumers. However, his recent Truth Social post, in which he tells Walmart to absorb the costs of tariffs rather than raise prices, directly contradicts this narrative. By insisting that Walmart should “eat the tariffs,” Trump is acknowledging that these costs are indeed hitting U.S. companies and, if not absorbed by them, will be passed on to shoppers through higher prices.

The statement that Walmart made record profits is also nuanced and not entirely accurate. Walmart’s net income for fiscal 2025 is reported as $$19.4 billion, and for fiscal 2024 as $16.3 billion. Contrary to Trump’s claim that Walmart made “far more than expected,” financial analysts and reporting indicate that Walmart’s results were largely in line with, or only modestly above, expectations.

Walmart operates on very slim net profit margins, typically around 2.5% to 3%. For every dollar of revenue, only a few cents translate to net profit, which is standard for the grocery and discount retail sector.

Trump has continuously assured the public that his economic policies, including tariffs, will ultimately benefit U.S. manufacturing and jobs. The evidence indicates that Trump’s tariffs during his first term did not broadly benefit U.S. manufacturing and jobs.

According to Brookings, some specific industries, such as steel and washing machines, saw modest job gains due to tariff protection, these benefits were limited and often outweighed by broader economic costs. For example, tariffs on steel led to several thousand new jobs in that sector, and washing machine tariffs created about 1,800 jobs at U.S. factories. However, these gains came at a high cost to consumers, with studies estimating that American consumers paid hundreds of thousands of dollars in higher prices for each job created.

A 2021 study commissioned by the U.S.-China Business Council (USCBC) found Trump’s tariffs resulted in net job losses. While a small number of jobs were created in protected industries, far more were lost in sectors that rely on imported inputs or were affected by retaliatory tariffs from other countries. The study found that Trump’s trade policies cost the U.S. economy about 245,000 jobs.

Walmart’s announcement is expected to set a precedent for other major retailers, many of whom may follow suit with their own price increases. If a low-price leader like Walmart is raising prices, it signals broader cost pressures across the retail sector.