For the past few years, consumers have faced an uphill battle with inflation.
Higher prices started to take hold in 2021, and the problem really hasn’t gone away since. Only now, consumers have a new economic issue to deal with — tariffs.
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So far, the impact of tariffs has largely been stock market-related.
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When tariff policies were announced in early April, it sent markets spiraling. Stock values have flip-flopped since, but all told, it’s been a volatile number of weeks.
Because tariffs were paused shortly after they were announced, it’s too soon to comprehend the impact they’re going to have on the economy. But retailers are definitely bracing for a hit. So are inflation-weary consumers, for that matter.
Walmart makes bold decision amid tariff threats.
Image source: Jeff Greenberg/Getty
Walmart says it’s ready to manage tariffs
A retail giant like Walmart is probably in a better position to adjust to tariff policies than are smaller competitors. The big box giant has plenty of negotiating power and can leverage its size to minimize the impact.
During the company’s most recent earnings call in February, Walmart CEO Doug McMillon had a reassuring message for investors who expressed concerns over incoming tariffs.
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“Tariffs are something we’ve managed for many years, and we’ll just continue to manage that,” he said. “We can’t predict what will happen in the future, but we can manage it really well.”
Walmart is already taking steps to minimize the impact of tariffs by turning to suppliers overseas and initiating price negotiation talks.
The fact that Walmart sources products from a number of foreign trade partners also helps. Because the company’s imports aren’t limited to a single foreign country, Walmart can pivot as needed to adjust for tariff-related increases.
Walmart makes a bold move in response to tariffs
Another good way for Walmart, and retailers in general, to minimize the impact of tariffs is to source as many products as possible domestically. And to that end, Walmart has a plan.
As it is, roughly two-thirds of Walmart products come from the U.S., which helps minimize the company’s exposure to tariffs. But Walmart is also introducing a new program for small businesses that could help address the issue.
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The program, called Grow With Us, is aimed at helping small U.S. businesses receive the training and resources they need to sell products to Walmart.
The company says that more than 60% of its U.S. suppliers are small businesses. Now, small operations that want to sell to Walmart can apply for the company’s four-step program, which includes online courses on business fundamentals and Walmart basics. The program also gives select businesses the opportunity to apply for financial support.
The company is also offering small businesses a chance to get their products in front of customers. Walmart has a number of upcoming events scheduled for May and June for businesses to meet with company buyers.
“Small businesses play a powerful role in bringing unique products to market to help meet the diverse needs of customers and communities nationwide,” said Walmart’s corporate press release. “We’re excited to continue providing support for and championing the achievements of these businesses every step of the way.”
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Not only does Walmart’s small business initiative offer a world of opportunity for local entrepreneurs, but it’s an innovative way to address the tariff problem. It’s also a good way to throw already cash-strapped consumers a bone.
Walmart’s program could also be instrumental in helping small businesses expand, thereby creating more jobs. Other giant retailers may want to follow in Walmart’s footsteps if their goal is to increase their supply of domestically produced products and avoid having to raise prices in response to tariffs.
