Walmart says it’s raising prices due to tariffs. Who’s next?

President Donald Trump says he’s wielding U.S. tariff policy for a variety of reasons, including rebalancing international trade inequities, compelling companies to bring back or establish domestic manufacturing facilities and deterring the flow of illegal immigration and illicit drugs across U.S. borders.

But economists have warned from the outset that the collateral impacts of Trump’s tariff strategy would include higher costs for consumers. And the world’s most powerful retailer just announced that it’s on the cusp of raising prices, and didn’t quibble about what’s driving the decision.

“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,” Walmart CEO Doug McMillon said Thursday on an earnings call. “The higher tariffs will result in higher prices.”

And the retail giant is likely to start rolling out those tariff-related price hikes “towards the tail end of this month, and I certainly expect more in June,” Walmart chief financial officer John David Rainey told CNBC.

Trump has walked back, at least temporarily, some of his most severe tariff decrees, including a 90-day pause on a swath of reciprocal trade levies announced in early April. Last week, he reduced a 145% tariff on Chinese goods to 30% for 90-days, but a 10% blanket levy on imported goods remains in place as do sector-specific import fees on steel, aluminum, automobiles and automobile parts.

While Trump’s presidential campaign made the economy a top issue, along with promises he’d bring down prices on U.S. consumer goods and services, the president has since recognized his trade policy changes, and particularly those targeting China, would put pressure on American family budgets.

“I told you before, they’re having tremendous difficulty because their factories are not doing business,” the president said of China during an April 30 Cabinet meeting. “They made a trillion dollars with Biden, a trillion dollars, even a trillion one with Biden, selling us stuff, much of it we don’t need. You know, somebody said, ‘Oh, the shelves are going to be open.’ Well, maybe the children will have two dolls instead of 30 dolls, you know? And maybe the two dolls will cost a couple of bucks more than they would normally. But we’re not talking about something that we have to go out of our way. They have ships that are loaded up with stuff, much of which, not all of it, but much of which we don’t need.”

Putting aside Trump’s necessities versus luxuries argument, Walmart’s McMillon noted that even the world’s largest retailer doesn’t have the scale to absorb tariff-related impacts and consumers should be prepared to simply pay more for whatever they’re purchasing.

Walmart’s price increases signal broader hikes

Some industry watchers predict the Walmart announcement is a likely bellwether for coming price hikes across the U.S. retail spectrum.

“If Walmart’s coming out — with its scale and its buying power and its focus — and saying prices are going to rise, everyone else is going to have to follow suit,” Neil Saunders, managing director at retail consultancy GlobalData, told NBC News. “Walmart is firing the starting gun on a period of price increases.”

Saunders said he expects grocery prices across the retail industry to rise 3% to 5% by the end of this year, while merchandise more dependent on global sourcing could jump by 5% to 7%.

“It’s not just the odd 1% that people can almost absorb and ignore,” he said. “We’re looking at reasonably substantial inflation.”

As reflected in the U.S. Labor Department’s inflation report released earlier this week, tariff-driven price increases had yet to reach the checkout lines in April as the Consumer Price Index eased to 2.3% last month, down from March’s 2.4% annual inflation rate.

But economists say April’s price easing is a mark of the calm before the storm.

U.S. companies were stockpiling goods earlier in the year ahead of approaching dates for new tariffs and that strategy helped to mute pricing changes last month. Now, however, incoming shipments will be subject to trade levies, which currently stand at an average 18%, according to a report from the Washington Post, roughly six times higher than before Trump took office and the highest in about 90 years.

What other companies are making tariff-related price increases?

While Walmart is the biggest retailer so far to announce tariff-related price increases, a number of other companies have also signaled coming price hikes due to new import fees. Per a Friday report from MSN, those companies include:

• Ford
• Conagra Brand foods company
• Volkswagen
• Best Buy
• Target
• Stanley Black & Decker
• Columbia Sportswear
• Autozone
• Procter & Gamble