Tariffs Will Likely Lead To Price Increases, Bessent Says

Treasury Secretary Scott Bessent conceded on Sunday that President Donald Trump’s tariffs could increase prices for consumers.

Walmart CEO Doug McMillon announced on a Thursday earnings call that the company would raise its prices due to the tariffs after recording a slip in first-quarter profits, despite strong quarterly sales and a bump in operating profit. During a Sunday appearance on “State of the Union,” Bessent said he spoke to McMillon, who told him that Walmart would potentially pass tariff-related costs on to American shoppers.

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“I did speak to Doug McMillon, who I have a very good relationship, yesterday, just to understand what he had to say. And, you know, understand that came from an earnings call. On an earnings call, because of [Securities and Exchange Commission] requirements, they have to give the most draconian case,” Bessent said. “So, Walmart will be absorbing some of the tariffs. Some may get passed on to consumers. But the other thing that’s happening is that inflation is down. We had the first drop in inflation in four years under President Trump.”

“The other thing that Doug mentioned to me is for his consumers, for his buyers, the most important thing are gasoline prices. And this administration has gotten gasoline prices down, service prices are down,” Bessent continued. “So overall, I would expect inflation to remain in line. But I don’t blame consumers for being skittish after what happened to them four years under Biden. We had the worst inflation in 40 years.”

Inflation eased more than anticipated in April, decelerating to its lowest level since February 2021, the Bureau of Labor Statistics (BLS) reported Tuesday.

Trump demanded that Walmart not pass on tariff-related costs to consumers in a Saturday post on Truth Social.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected,” the president wrote. “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!!!”

However, Republican Kentucky Sen. Rand Paul said Sunday on ABC’s “This Week” that increased costs from tariffs are an inevitability.

“Well, tariffs are taxes, and when you put a tax on a business, it’s always passed through as a cost,” Paul said. “So, there will be higher prices.”

Bessent said on “State of the Union” Sunday that he believed the Trump administration “will do a lot of regional deals,” meaning setting different tariff rates for different regions, including Central America and certain parts of Africa, according to Axios. The treasury secretary also noted that the Trump administration is currently prioritizing “the 18 important trading relationships.”

Following trade negotiations in Geneva, Switzerland, the U.S. and China have temporarily dropped their tariffs on one another significantly. China had previously endeavored to make inroads in Vietnam, Malaysia and Europe, following Trump’s “Liberation Day” tariff rollout in early April.

Trump on Friday asserted that his administration will soon tell certain countries in a letter what their tariff rates will be, Fortune reported. The president noted it was impossible to negotiate with every single one of the numerous nations that his administration has hit with tariffs.

Several recent polls have found that Americans are generally unhappy with Trump’s approach to the economy. For instance, a Reuters/Ipsos poll published April 23 showed that just 37% of respondents approved of the president’s management of the economy.

After Trump said that children may end up with fewer and more expensive dolls due to his tariffs on China, political analyst Mark Halperin, former Democratic strategist Dan Turrentine and former White House press secretary Sean Spicer argued on May 5 that Democrats were failing to capitalize on what they viewed as poor political rhetoric by the president.