We’ve already established that President Trump is a lousy negotiator. But now, out of his own thumbs, we’ve got the proof that he’s got no business chops, either.
After Walmart announced that it would soon be raising retail prices because of Trump’s tariffs, Trump posted this 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. 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!!!”
It’s rare, even with Trump, to find so much nonsense packed into a single paragraph. But somehow he’s managed it.
For one thing, serious business people don’t whine. They make the best decision they can and then either live with the consequences or change their approach. What they don’t do is throw a tantrum because their customers and competitors are not cooperating with their plans.
Second, Walmart has a duty to its shareholders, not to Trump’s ego or his political fortunes. Walmart should not be “eating tariffs” to make the president happy, and it is cringe-worthy that Trump has suggested it should.
Trump’s suggestion is proof positive that he doesn’t know the first thing about Walmart’s business or how it works. Walmart is a high-volume, low-margin retailer. In other words, it makes a tiny profit on each sale but it sells a huge amount. Walmart’s profit margin is just 2.75 percent. So yes, Walmart made almost $19 billion over the last year, but it had to wrack up almost $700 billion in sales to do it. It’s hard to tell exactly, since Walmart doesn’t like to talk about it, but one analyst estimates that about 75 percent of Walmart’s non-grocery inventory is imported, and around 60 percent of that is imported from China. Since selling imported goods is such a large part of its business, Walmart has no choice but to pass along tariffs — especially 30 percent tariffs — to its customers. The alternative is bankruptcy.
But let’s have a little fun with this. Even if Trump is past educating, American voters aren’t. Democrats have been desperate to find some way to push back against the Trump administration that’s more effective than singing folk songs on the Capitol steps. Congressional Democrats are, apparently, incapable of holding Trump’s feet to the fire. But maybe state Democrats can.
Suppose California and other blue states passed laws requiring retailers to display two prices for every item: one without tariffs and the actual price that includes the cost of tariffs.
This would bring home to voters just exactly how much the “Trump tax” is costing them every time they shop. COVID inflation made voters mad enough. Think how they’ll react to inflation that’s being arbitrarily imposed based on the president’s whims.
And though this would only be legislated in blue states, it is likely that online retailers such as Amazon would display prices both with and without tariffs nationwide, because trying to hide tariff costs on a state-by-state basis would be needlessly complicated.
But the best part of this is that MAGA-world would have a collective meltdown. We already know that’s true, because it’s already happened. And when Republicans begin screaming about how these price transparency laws are “a hostile and political act,” Democrats can ask, “Aren’t you proud of tariffs? What are you trying to hide? Why shouldn’t voters have this information?”
So yes, Trump is lousy at business. He’s already got six bankruptcies to his credit, a statistic that might have gotten him barred from running any future companies in less-forgiving countries. Unless Walmart wants to be number seven, it should not be taking business advice from the president.
Nor should the U.S. Trump’s economic policies, from tariffs to tax cuts, are the worst kind of magical thinking. They are going to result in inflation and economic chaos. Moody’s has already cut our credit rating and there is worse to come. Let’s hope America isn’t bankruptcy number eight.
Chris Truax is an appellate attorney who served as Southern California chair for John McCain’s primary campaign in 2008.
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