- China has warned Walmart against squeezed suppliers to compensate US tariffs.
- US tariffs on Chinese goods have increased among the tensions raised with the Trump administration.
- Companies were already shifting some products to other developing countries due to US-KIIN tensions.
Beijing brought Walmart leaders for a meeting earlier this week – a sign that the country is holding a close observation with retailers between US tariff concerns.
On Tuesday, the Chinese authorities called for a retail giant for a meeting, reported Yuyuan Tantian, a Weibo social media account linked to state television CCTV.
A spokesman at the Chinese Ministry of Trade said at a press conference on Thursday that he had communicated with Walmart after reviewing reports and reactions from several companies, according to CCTV. Walmart has explained the situation, the ministry said without further elaboration.
Yuyan Tantian’s post said authorities, including the Ministry of Trade, demanded discussing reports that Walmart had asked suppliers to reduce wholesale prices to compensate for the highest US tariffs.
The posting of social media said such an action would create risks of breaking the supply chain and could “violate trade contracts and disrupt the order of normal trading”.
She also warned Walmart not to exceed tariff costs for its Chinese suppliers.
“If Walmart insists on doing that, then what Walmart expects is more than an appointment,” according to the post.
Beijing’s meeting with Walmart underlines Chinese leaders’ concerns for economics, as US President Donald Trump’s trade war injects new challenges.
“Beijing has essentially warned that it will take action against Walmart if Chinese suppliers are forced to absorb the tariff influence,” wrote Vishnu Varathan, the head of Macro Research for Asia excluding Japan on Thursday.
Beijing “is in his guard against the attack of US tariffs on the borders of Chinese producers,” he added.
Development shows tensions between US efforts to uncover inflationary effects from Chinese tariffs and efforts to remove the deterioration of deflationist risks, Varathan wrote.
On Wednesday, the US began imposing additional new tariffs on all imports of steel and aluminum. On March 4, the Trump administration doubled the blanket tariffs for Chinese goods to 20% at the top of existing taxes.
Walmart did not immediately respond to the Business Insider request for commentary overtime. However, the company confirmed the meeting for Reuters and said it will continue to work closely with suppliers to “find the best way forward during these unsafe times”.
China is the world’s factory floor for companies around the world, including Walmart. Net sales worth $ 5 billion with net sales value in China make up about 3.5% of its total net sales globally.
Bessent: ‘prices prices will not grow’
Trump’s new tariffs come while China is trying to revive trust in its economy, which has been trying to recover since the end of pandemic blockages. Balfing is involved with numerous problems, including a wealth crisis, high youth unemployment and deflation.
In February, China’s consumer inflation fell below zero for the first time in 13 months, highlighting poor demand.
China’s industrial profits in large companies – a major indicator of how well factories, mining and service firms are doing – 3.3% in 2024, marking its third year of direct decline.
Last week, US Treasury Secretary Scott Bessent told Fox News that he was the positive Chinese suppliers would absorb fees.
“With China tariffs, I’m very sure Chinese producers will eat fees – prices will not rise,” Bessent said.
Tensions between Washington and Beijing have been boiling over for years, incentive companies – even Chinese ones – to move production outside China. The movements were accelerated during the pandemic due to the outage of the supply chains in China, which implemented external blockages for nearly three years.
Trend beneficiaries include India, Vietnam and Mexico.