Trump tells Walmart to ‘eat the tariffs’ as stock falls 2.4%

Why Did Walmart’s Stock Price Decline After Trump’s Criticism?

Shares of Walmart Inc. (NYSE: WMT) fell by 2.4% on May 19, 2025, as investor confidence took a hit following remarks from U.S. President Donald Trump urging the retail heavyweight to absorb the costs associated with tariffs rather than pass them on to American consumers. The criticism, delivered via Trump’s Truth Social account, accused Walmart of leveraging tariff policies to justify retail price increases, despite its scale and profitability.

The drop in Walmart’s share price came as markets reacted swiftly to Trump’s statements, which reignited debates around the inflationary impact of import tariffs on essential goods and household staples. The retail sector, already grappling with pricing volatility and thinning margins, was once again placed under the microscope, with Walmart at the center of the storm due to its outsize influence on U.S. consumer behavior.

What Exactly Did President Trump Say About Walmart?

President Trump, in a widely circulated post, stated that “Walmart and China should both eat the tariffs,” urging the company not to use trade-related costs as a pretext for increasing prices for everyday American families. He pointed out that Walmart’s profits were “more than sufficient” to absorb some of the burden, especially given its standing as the largest retailer in the U.S. and a dominant global procurement player.

The message was not an isolated comment but part of a broader strategy by the Trump administration to pressure corporations to prioritize domestic economic stability over earnings-driven decisions. The president’s remarks came shortly after Walmart executives, during their earnings call, admitted that the company may be unable to fully offset tariff-related costs through internal efficiency or supply chain tactics.

How Did Walmart Respond to the White House Pressure?

In response to President Trump’s pointed comments, Walmart issued a formal statement emphasizing its commitment to offering low prices to consumers. The company noted that while it does absorb some cost increases, the scale of recent tariff-related expenses—especially those stemming from imports from China and Southeast Asia—present significant challenges for margin management.

CEO Doug McMillon, speaking during the company’s recent earnings call, acknowledged that although the administration’s tariff rollback deal had introduced a 90-day suspension on new levies, the retailer was still managing legacy import costs and long-term supplier pricing contracts. McMillon credited the Trump-Bessent trade diplomacy for recent easing but reiterated the difficulty of holding prices flat when freight, raw materials, and wage costs remain elevated.

The company also noted ongoing efforts to diversify its sourcing base to minimize exposure to tariffs, including ramping up operations in Vietnam, India, and Latin America.

What Does This Mean for U.S. Retail Pricing and Inflation?

Walmart’s role in the American retail ecosystem is massive. The company services over 240 million customers each week and exerts significant influence on national pricing trends for groceries, clothing, pharmaceuticals, and consumer electronics. When Walmart signals potential price hikes due to tariffs, economists and policymakers take notice.

Historically, tariffs have been used as a trade policy lever to pressure foreign competitors—often with domestic price repercussions. In this case, the pricing tension plays into 2025’s broader inflation narrative, which has seen consumer prices rising faster than wage growth in several middle-income households. Retailers that operate on slim margins, such as Walmart, Target, and Dollar General, are finding it harder to shield consumers without affecting earnings.

The Trump administration’s stance reflects political awareness of inflation fatigue, especially in the run-up to the 2026 midterms. Targeting Walmart allows Trump to demonstrate a tough stance on corporate accountability while reinforcing his “America First” trade platform.

What’s the Investor and Institutional Sentiment Around Walmart Stock?

Despite the 2.4% drop following the president’s comments, Walmart shares remain up approximately 9% year-to-date. The retailer’s robust omnichannel growth strategy, driven by investments in digital retail and automation, has kept long-term investors optimistic about its prospects—even amid pricing headwinds.

On the day of the selloff, institutional data from Nasdaq and Bloomberg showed heightened intraday trade volumes, particularly sell-side moves by hedge funds and algorithmic traders reacting to social and political volatility. Analysts at Morgan Stanley and UBS issued advisories noting that the short-term price action was “reactionary,” with no underlying shift in Walmart’s fundamentals.

Bank of America retained its “Hold” rating on the stock, citing ongoing macro risks. Citi, on the other hand, reiterated a “Buy” rating, pointing to Walmart’s scalable logistics infrastructure and procurement leverage as tools that could help cushion tariff blows over the next 12–18 months.

How Are Global Supply Chains Shifting in Response to Tariff Pressure?

Walmart has long pursued global sourcing strategies that balance cost, speed, and regulatory risk. The tariff tensions under Trump’s presidency have accelerated this diversification. In recent years, Walmart has grown its supplier base in India, Bangladesh, Vietnam, and Mexico to hedge against overdependence on Chinese manufacturing.

Company executives said that while China still plays a critical role in electronics, apparel, and household product imports, Walmart is reducing that reliance by 15–20% by the end of FY26. The company is also exploring reshoring some critical categories to the U.S. in partnership with regional manufacturers—particularly in consumables, pharma packaging, and home goods.

This move not only aligns with Trump-era political pressure but also reduces exposure to geopolitical flashpoints such as the South China Sea, cross-strait tensions, or supply chain disruptions from future pandemics or climate events.

What Should Investors Watch for Going Forward?

Walmart’s near-term share performance will likely depend on three macro variables: tariff developments, consumer sentiment, and broader political rhetoric. If President Trump continues to spotlight corporate pricing practices, especially in the consumer staples sector, further volatility in retail stocks could be expected.

Investors will also be tracking the Federal Reserve’s next interest rate guidance, as tighter monetary policy could dampen consumer discretionary spending—putting further pressure on Walmart’s lower-income customer base. In parallel, any renegotiation of tariff terms or a second phase of the 90-day suspension deal could provide temporary relief for big-box retailers.

Technical analysts have identified the $60 level as a near-term support zone for Walmart shares, with upside capped at $65–67 unless macro conditions stabilize.

Walmart’s recent stock slide serves as a case study in how politics and policy can directly shape equity performance in the retail sector. President Trump’s intervention has heightened scrutiny of pricing strategy at a time when inflation remains front of mind for American households. While Walmart’s fundamentals remain intact, its leadership now finds itself navigating both operational costs and political optics—a dual front that could shape not just investor sentiment, but public trust in the company’s pricing practices.