Walmart is caught in the crossfire of the intensifying trade war between the United States and China.
Chinese officials summoned executives from the U.S. retail giant on Tuesday to investigate reports that Walmart had pressured its Chinese suppliers for discounts to manage the rising tariffs imposed by Donald Trump, according to state media.
Last week, Trump raised tariffs on all Chinese imports to 20%. In retaliation, China implemented new tariffs on U.S. agricultural imports, which went into effect on Monday.
Many businesses are struggling with the fallout from Trump’s unpredictable tariff decisions, which have intensified trade tensions between the world’s two largest economies. Retailers told CNN that they might have to raise prices just as many customers are already facing financial strain and the effects of inflation.
Last week, Bloomberg reported that Walmart was attempting to address its tariff challenges by requesting significant price cuts—up to 10%—from some of its Chinese suppliers to offset the impact of U.S. tariffs.
According to a post on Wednesday by Yuyuantantian, the official social media account of state broadcaster CCTV, officials from China’s Ministry of Commerce requested a meeting with Walmart to “understand the situation.”
“If true, Walmart’s request for Chinese suppliers to bear the full burden of tariffs is unreasonable and disrupts fair competition and the order of international trade,” the post stated.
In what could be seen as a warning, it added that Chinese authorities may “take further action” if the American retailer persists in seeking discounts. While it’s not uncommon for suppliers to be asked to lower their prices in China, it’s a difficult request given that many businesses are already operating with very thin margins.
In a statement to CNN, Walmart emphasized that its goal is to help people “save money and live better.”
“Our discussions with suppliers are focused on making our mission a reality for millions of customers, and we will continue working closely with them to find the best path forward during these uncertain times,” Walmart stated.
The Arkansas-based retailer doesn’t just source products from China; it also has a strong and growing presence in the country. Walmart entered China in 1996, opening its first superstore and Sam’s Club in the southern megacity of Shenzhen.
Walmart now operates in over 100 cities across China. In the most recent financial year, its net sales in the country increased by 16%, reaching $17 billion, compared to the previous year.
