US retailer Walmart has reached out to its suppliers in China, requesting significant cost concessions as the company aims to mitigate the financial impact of tariffs introduced by US President Donald Trump.
The request specifically targets manufacturers of items such as kitchenware and apparel, urging them to cut their prices by up to 10%, according to Bloomberg News.
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Negotiations are being conducted on a case-by-case basis with each manufacturer, resulting in varying levels of price reductions. To date, only a limited number of suppliers have agreed.
This is largely because suppliers operate on very slim profit margins, a consequence of Walmart’s longstanding approach of aggressively minimising purchase costs to sustain its market leadership position.
A reduction in prices exceeding 2% could lead to losses for these manufacturers.
A Walmart spokesperson was quoted by Reuters: “As we have done in the past, we will continue to work with suppliers to keep prices as low as possible for customers.
“In the meantime, we encourage all parties to work towards finding common ground that will protect consumers from price hikes and continue to grow our economy.”
Walmart states on its website: “Most of the products we source for our retail businesses in the US and other major markets like Mexico were made, grown or assembled domestically. For example, two-thirds of merchandise sold in Walmart US and 93% of merchandise sold in Walmart Mexico fall in this category”.
US retailers are now bracing for repercussions on pricing following Trump’s implementation of substantial 25% tariffs on imports from Canada and Mexico, along with a 20% tax on Chinese goods.
In early March 2025, the US National Retail Federation called for negotiations with Canada and Mexico – the US’s immediate neighbours – following the Trump administration’s decision to implement 25% tariffs on their imports.
In February, Walmart reported a revenue surge to $680.98bn in fiscal 2025 – a 5.1% rise from the previous year’s $648.12bn.
