A shopper loads her car after shopping at a Walmart in PittsburghWalmart, Pittsburgh, USA - 22 Feb 2018

The U.S.’s biggest retailer told the government that tariffs would force it to raise prices and rethink its reshoring efforts.

The stark warning came in a letter Walmart Inc. sent to U.S. Trade Representative Robert Lighthizer on Sept. 6. This was just over 10 days before the White House powered ahead with its decision on Monday to slap $200 billion of Chinese imports with tariffs, including handbags and luggage.

Walmart expressed concerns about the impact tariffs would have on its business, its customers, its suppliers and the U.S. economy and said it would be left with little choice to push up prices of a number of everyday items.

“Should the tariffs go into effect, Walmart customers will face cost increases for essential items like car seats, cribs, backpacks, hats, pet products and bicycles,” the company said. “For lower-income families, a 25 percent tax on these items would be a serious burden on household finances.”

The Benton, Ark.-based retail giant also argued that increased costs associated with new tariffs could lead families to turn to cheaper, but less safe options to offset new financial burdens.

The company noted that it can take significant time and resources to ensure potential suppliers for personal-care suppliers can meet the necessary requirements, including the FDA’s good manufacturing practices.

Walmart added that in recent years it had made efforts to source more goods from the U.S., but that tariffs threaten to undermine its commitment to reshoring as many manufactures rely on component parts from China to assemble and finish production in the U.S.

“We have heard from U.S. manufacturers from all across the country that the tariffs on component parts will negatively affect their competitiveness and employment in the United Sates,” the retailer said. “Tariffs on intermediate goods make little sense when the stated goal of the administration is to increase manufacturing and jobs in the United States.”

A spokesman told WWD that Walmart encourages the U.S. and China to find near-term solutions to ease trade tensions that will allow more opportunities for U.S. exports and benefit families in both countries.

Walmart was one of many major retailers to have voiced concerns to the administration in the weeks before it made its decision to unleash 10 percent tariffs, which will rise to 25 percent by year-end.

In a letter sent on the same day, Target Inc. wrote it was “disappointed that despite broadly expressed concerns from companies and groups across a variety of industries, the administration has continued to escalate the threat of tariffs that would penalize American families.”

load comments
blog comments powered by Disqus