Walmart worries that US tariffs will raise Mexican fresh produce prices
By Nandita Bose - Jun 10th, 14:40
Walmart CEO Doug McMillon says the retailer is concerned that fresh produce prices would rise if tariffs are placed on imports from Mexico.
“We are concerned about that category. We don’t want prices going up on those fresh items for customers and we will resist it as long as we can, but we can’t tell when those prices have to go up,” McMillon said at Walmart’s shareholders’ meeting.
“If the customer is focused on avocado prices, we will hold those prices for as long as we can and focus elsewhere.”
US President Donald Trump has threatened to impose levies starting at 5% on June 10 if the Mexican government does not agree to do more to tackle an increase in mostly Central American migrants crossing Mexico to enter the US.
Trump said there was a “good chance” the US would be able to reach a deal with Mexico over migration, though his administration was still pushing ahead with a plan to slap import tariffs on its southern neighbour.
McMillon's comments come as retailers are preparing for an increase in prices after the Trump tariffs on imports from China. Walmart will change sourcing bases on products when possible, he said.
“Where we can change sourcing, whether it’s Mexico, it’s China, we will but where we can’t we just have to deal with it and find places where we can cut costs in the near term,” he said.
McMillon did not give details on how much Walmart procures from China or Mexico.
Walmart US CEO Greg Foran told Reuters the impact from tariffs on imports from Mexico will be “significant” for Walmart. He declined to share additional details.
Walmart also said it hopes the US and China find a way to work together. It is in the best US interest to do so because China offers a “tremendous business opportunity”, McMillon said.
In May, the retailer said prices would rise for shoppers due to tariffs on Chinese imports.
“Trade overall has been good for Americans, good for consumers ... and I realise it gets criticised at times,” said McMillon, urging a focus on how trade helps a broad number of people in the country and “not just those it harms”.
Walmart has spent time talking to both governments and is trying to encourage things to work out “in ways we can but we don’t control that”, he said.
The retailer said it has so far seen no impact from trade wars on businesses in China and Mexico. Mexico is Walmart’s largest international market in terms of stores and revenue outside the US.Business Live
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