Reacting to statements by Walmart executives last week during an earnings call, President Donald Trump castigated the retailing giant on Saturday for warning that his new tariffs would force the company to raise retail prices for customers. Pointing out that Walmart is profitable, Trump said the company should “EAT THE TARIFFS” rather than passing some portion of his import tax onto consumers.
At the White House Monday, Press Secretary Karoline Leavitt was asked if Trump’s comments acknowledge that his tariffs are paid by American importers and consumers – the basic story most economists tell but is denied by members of the Trump administration, including the president himself, who insist that exporters and foreign countries absorb the costs of the tariffs.
Leavitt downplayed the comments from Walmart and doubled down on the administration’s view. “The reality is, as the president has always maintained, that Chinese producers will be absorbing the cost of these tariffs,” she insisted.
Appearing on CNN this past weekend, Treasury Secretary Scott Bessent was asked about Trump’s social media post. “Doesn’t that inherently serve as an acknowledgement that tariffs are essentially a tax on consumers?” asked CNN’s Jake Tapper. Bessent also downplayed the comments about price hikes, saying executives on earnings calls are required to give “the most draconian case.” But he admitted that the tariffs could hurt consumers and importers: “Walmart will be absorbing some of the tariffs, some it may get passed onto consumers,” he said.
Writing at Axios Monday, Ben Berkowitz said the comments by Trump and Bessent make it clear the argument about who pays for tariffs is over. “The Trump administration conceded this weekend what economists, CEOs and consumers already knew: Americans pay for tariffs,” he wrote.
Bessent added that lower inflation should ease the pain of any price hikes, while laying the blame for consumers being “skittish” about inflation on the Biden administration.
Separately, a report from Bloomberg Economics suggests that the cost of the tariffs is already being borne by American importers and consumers.
“April import prices suggest the US side is continuing to pay most of the cost of tariffs so far,” said economists Chris G. Collins and Anna Wong. “While we don’t know much about how trade patterns shifted in April, import-price indexes that exclude the cost of tariffs have been little changed since the start of the year. This suggests US importers are paying essentially the same price they would have paid in the absence of tariffs, plus the tariff.”