President Donald Trump is sending a stern warning to Corporate America: He will use his bully pulpit to publicly shame companies that dare to raise prices because of tariffs. After Walmart last week said it would have to jack up some prices because of high costs of the global trade war, Trump on Saturday responded forcefully in a Truth Social post, demanding Walmart reverse its decision. “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump said. “Between Walmart and China they should, as is said, “EAT THE TARIFFS,” and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!” The rebuke was the White House’s third such public reprimand of a big American business that discussed the possibility of raising prices because of the steep cost of tariffs. On April 29, after Amazon reportedly considered displaying an additional tariff charge next to the listed price on its Haul platform, White House Press Secretary Karoline Leavitt at a press briefing held up a photo of Amazon Chairman Jeff Bezos and called the move a “hostile and political act.” Trump, whom a senior official described as “pissed,” called Bezos to complain, saying the company’s founder “solved the problem very quickly.” Amazon said that although it was considering displaying the tariff cost, the plan was ultimately not approved and “not going to happen.” A week later, on May 6, Trump threatened a 100% tariff on Mattel after the Barbie and Hot Wheels maker said it would have to raise prices. Mattel CEO Ynon Kreiz said Trump’s tariffs won’t bring toy manufacturing to America, because toys couldn’t be manufactured in America and still be sold at affordable prices. “We don’t see that happening,” Kreiz told CNBC after Mattel warned that tariffs will increase toy prices for American consumers. Trump fired back from the Oval Office, threatening the company and its CEO. “We’ll put a 100% tariff on his toys, and he won’t sell one toy in the United States, and that’s their biggest market,” Trump said. “I wouldn’t wanna have him as an executive too long.” Trump’s demands thus far appear aimed at big companies and their significant profits — echoing former President Joe Biden’s populist “greedflation” mantra, which accused companies that raised prices of taking advantage of the inflation crisis throughout much of his term. “Walmart made “BILLIONS OF DOLLARS last year, far more than expected,” Trump posted on social media on Saturday. That’s accurate — Walmart is America’s biggest retailer and had a strong 2024 on the back of inflation-weary customers seeking out its notoriously low prices. But Walmart’s profit is a function of its massive scale, rather than artificially high prices. As a percentage of sales, Walmart’s operating income last quarter was just a little over 4%. Its net profit margin was less than 3% — razor-thin by business standards. No one believes Walmart, the world’s largest company measured by revenue, is going to the poor house anytime soon, and Trump is probably right that the company could “eat” much or all of the tariff cost and make out just fine in the long run. But CEO Doug McMillion doesn’t work for Trump — he works for Walmart’s shareholders, who demand earnings stability and growth. That’s why McMillion last week said Walmart would eat some — but not all — of the tariff cost. To keep its minuscule margins steady, the company would have to pass some of that on to customers. “We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” McMillon said Thursday in an earnings call. “We’re positioned to manage the cost pressure from tariffs as well or better than anyone. But even at the reduced levels, the higher tariffs will result in higher prices.” Despite Trump’s angry call to Bezos, his tariff threat against Mattel and his warning to Walmart, other American brands will almost certainly follow suit. If Walmart — whose entire business has been built on achieving massive scale and supply chain dominance — can’t avoid passing along costs to customers, what business can? Investors will be watching Home Depot and Target very closely this week for more signs of trade war pain and, perhaps, higher prices. Higher prices are coming to America, and no amount of bullying, even from the president, can stop it.
Trump warns America’s businesses: Eat my tariffs, or pay the price
TruthLens AI Suggested Headline:
"Trump Issues Warning to Corporations Over Price Increases Due to Tariffs"
CNN
5.8
TruthLens AI Summary
President Donald Trump has issued a strong warning to American corporations, particularly targeting Walmart, regarding price increases attributed to tariffs. Following Walmart's announcement that it would raise some prices due to the pressures from the ongoing global trade war, Trump took to Truth Social to demand that the retailer reverse its decision. He stated, "Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain," insisting that both Walmart and China should absorb the tariff costs instead of passing them on to consumers. This public admonishment is part of a broader strategy by the White House to publicly confront major companies that suggest implementing price hikes due to tariff impacts. Previously, Trump had criticized Amazon for considering a similar approach and threatened to impose a 100% tariff on Mattel after the toy company indicated that it might have to increase prices due to tariffs. These actions exemplify Trump's aggressive stance toward corporate price adjustments in the context of rising tariffs, as he aims to hold companies accountable for price increases that he deems unjustifiable.
Trump's remarks reflect a populist approach similar to that of President Joe Biden, who has accused corporations of exploiting inflationary pressures for profit. Despite Walmart's substantial profits, which have surged due to consumer demand for low prices, its operating margins remain thin, leading CEO Doug McMillon to acknowledge that the company cannot absorb all tariff-related costs without passing some onto customers. The broader implications of Trump's threats and demands suggest that if a retail giant like Walmart cannot avoid raising prices, other businesses may soon face similar pressures. As investors and consumers alike watch for potential price increases from major retailers such as Home Depot and Target, the reality of higher prices in the American market seems increasingly inevitable, regardless of the political rhetoric aimed at curbing such developments.
TruthLens AI Analysis
The article highlights President Trump's aggressive stance towards American corporations regarding price increases attributed to tariffs. By publicly shaming companies like Walmart and Amazon for considering price hikes, Trump aims to exert pressure on these businesses to absorb tariff costs rather than passing them on to consumers. This approach serves as a warning to corporate America about the consequences of such decisions.
Perception Management
The intention behind this article appears to be the management of public perception regarding tariffs and their impact on consumer prices. By framing the issue as a choice for companies to "eat the tariffs," Trump aims to present himself as a champion for the average consumer, positioning corporations as the villains if they raise prices. This narrative seeks to garner public support for his tariff policies and to hold large corporations accountable for their pricing strategies.
Concealment of Broader Issues
There may be an underlying aim to divert attention from the broader implications of trade wars and tariffs, such as their impact on the economy and potential job losses. By focusing on individual companies and their pricing decisions, the article may obscure the larger economic challenges posed by ongoing trade disputes.
Manipulative Elements
The manipulative nature of the article is evident in its language and framing. Trump's use of aggressive rhetoric, combined with the direct threats to companies like Mattel, creates a sense of urgency and fear among businesses. The portrayal of these companies as unpatriotic for raising prices can also be seen as a tactic to rally public sentiment against corporate entities while promoting a narrative of protectionism.
Truthfulness of the Content
The article appears to present accurate accounts of Trump's comments and actions regarding tariffs and corporate pricing strategies. However, the selective focus on these incidents may skew the overall understanding of the economic context and the complexities of tariff impacts.
Implications for Society and Economy
This article could influence public opinion, particularly among consumers who may feel they are being unfairly charged due to corporate greed. In the long run, such narratives could lead to increased scrutiny of corporate pricing practices and potentially impact consumer purchasing behavior. The political implications are significant, as Trump seeks to solidify his support among his voter base by positioning himself against big corporations.
Target Audience
The article likely resonates with populist sentiments, appealing to working-class individuals who feel the brunt of price increases. By targeting these communities, Trump aims to reinforce his image as a defender of the common American against corporate interests.
Market Influence
In terms of market impact, companies like Walmart and Mattel might experience fluctuations in stock prices based on public and investor reactions to Trump's statements. Investors may become wary of the potential for increased regulatory scrutiny or backlash against companies perceived as raising prices unfairly.
Geopolitical Context
While the article primarily focuses on domestic economic issues, it also reflects broader global trade tensions. The ongoing trade war with China is a critical backdrop that shapes these discussions, as tariffs are a significant tool in negotiating trade relationships.
Artificial Intelligence Involvement
There is no clear indication that AI played a direct role in crafting this article. However, the use of AI could potentially influence how news is framed and disseminated in broader contexts, shaping public narratives around economic policies and corporate behavior.
In conclusion, while the article is rooted in factual reporting of Trump's comments and threats, it employs manipulative language to shape public perception. Its focus on individual corporations and their pricing strategies may distract from the more complex economic realities at play, serving a specific political agenda.