Even After Beijing Pushed Back, Walmart Keeps Pricing Pressure on Suppliers

Walmart Inc. is maintaining pressure on its Chinese suppliers to lower prices in response to U.S. President Donald Trump’s tariffs, despite being summoned by Chinese officials last month to discuss the matter, according to sources familiar with the situation.

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The world’s largest retailer has remained firm in its request for suppliers to cut prices by up to 10% for each round of tariffs, essentially asking them to absorb the additional costs imposed by Trump’s trade policies.

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The sources, who requested anonymity due to the private nature of the discussions, indicated that Walmart’s persistence highlights the difficulties Chinese manufacturers face as they deal with both the impact of tariffs and a slowing domestic economy.

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Even after warnings from Chinese state-affiliated social media about possible retaliation, Walmart has not softened its stance. The retailer’s negotiations with suppliers reflect the broader efforts of U.S. businesses to mitigate the rising costs of imported goods. These pressures are expected to intensify as Trump prepares to announce new reciprocal tariffs against key U.S. trading partners, adding to the existing 20% duties already imposed on Chinese imports.

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Discussions between Walmart and its suppliers are occurring across various product categories, rather than being based on the country of origin, according to a source familiar with the matter.

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A Walmart spokesperson stated that the company’s discussions with suppliers are aimed at keeping prices low for consumers, and that it remains committed to working closely with vendors to find the best solutions.

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Other major U.S. retailers, such as Target Corp. and Costco Wholesale Corp., have also acknowledged that tariffs are likely to drive up costs, and they are exploring ways to navigate these challenges. Analysts predict that categories such as clothing and home goods will be particularly affected by the tariffs on Chinese imports.

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Some Chinese manufacturers are struggling to meet Walmart’s demands for price reductions of up to 10% per tariff round, the sources said. The specific nature of these price negotiations varies by supplier, but many manufacturers are finding it increasingly difficult to accommodate the retailer’s requests.

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These tough negotiations indicate that Chinese exporters may continue facing difficult conditions for the foreseeable future. In an effort to maintain long-term relationships with U.S. buyers while protecting their profit margins, some Chinese factory owners are exploring alternative production locations in other parts of Asia, including Cambodia and Vietnam.

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Despite these tensions, Walmart remains a dominant player in China. It is regarded as a highly desirable business partner among Chinese manufacturers, given its reputation for placing large and consistent orders.

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Additionally, Chinese consumers have shown strong interest in the company’s Sam’s Club stores, which are known in China for their high-quality meats and premium food offerings.

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Walmart’s deep-rooted presence in the world’s second-largest economy may provide some level of protection from political retaliation, even as other global businesses scale back operations or exit the Chinese market entirely.

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Although a Weibo account affiliated with China Central Television, Yuyuantantian, warned in March that Walmart’s price-cutting demands could harm both American and Chinese companies, there has been no further public indication of dissatisfaction from Chinese authorities.

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The Commerce Ministry confirmed last month that it met with Walmart executives to discuss their dealings with Chinese suppliers, but it has not taken any punitive actions against the retailer since then.

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This contrasts with the scrutiny faced by CK Hutchison Holdings Ltd., which has encountered significant opposition from Beijing over its attempt to sell 43 ports, including key ones near the Panama Canal, to an international consortium.

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For now, Walmart continues to press suppliers to absorb tariff-related costs, positioning itself to keep consumer prices competitive even as global trade tensions persist.

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