Chinese officials warned of legal consequences after this week that they gave Walmart a dressing down and reported that retailers had pressured China-based suppliers to cover the costs of the tariffs, according to the report.
authorities Summon Walmart executives to meet them Tuesday after a complaint that the discount chain is pushing Chinese suppliers down their prices and absorbing costs from President Trump's 20% collection, according to the Wall Street Journal and sources familiar with the issue.
“The purpose of Walmart is to help people save money and live a better life,” the spokesman wrote in a statement. “All our conversations with our suppliers are aimed at making our purpose a reality for millions of customers, and we will continue to work closely with them to find the best way to do this in these uncertain times.”
A spokesperson said Walmart has a “strong” business in China.
Economists warn that President Trump's strict tariffs could reheat inflation, raising concerns that businesses must cover the extra costs associated with importing products and parts from China.
To avoid the price of hiking, Walmart is reportedly suing Chinese suppliers, including kitchen and clothing manufacturers, to cut by 20%. Bloomberg reported previously.
Few people agreed to a major price cut, but there have been talks with several manufacturers.
So on Tuesday, Chinese officials asked Walmart representatives to explain what the company was doing, saying it was unfair and irresponsible to force Chinese suppliers to pay tariffs.
Authorities warned Walmart that asking suppliers to lower their prices could breach the contract and disrupt the market order, referring to potential legal consequences, sources told the journal.
“Walmart claims” to let Chinese suppliers absorb tariff-related costs, and “What Walmart is waiting for is not just a story,” state broadcaster China Central Television said Wednesday.
Walmart executives said they would find ways to work with Chinese suppliers to avoid eroding profits, highlighting the importance of Chinese businesses and suppliers, the report said.
Chinese officials also reportedly told Walmart executives that Chinese consumers shopping at Walmart can easily find alternatives, the journal said.
Walmart stocks slid 2.6% on Wednesday.
Walmart operates more than 300 Walmart and Sam's Club stores in China.
The retailer reported net sales of approximately $5 billion in China in the most recent quarter. This is an increase of 28% from the previous year. This accounted for less than 3% of total global revenue.
