Escalating Trade Disputes: China vs. Walmart – Essential Insights
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Highlights
Chinese government officials grilled Walmart honchos following media claims that the retail titan pressured its Chinese suppliers to slash prices and shoulder President Trump's import tariffs. CCTV, the state-controlled Chinese media outlet, broke the news, accusing Walmart of attempting to shift the cost burden of Trump's tariffs onto Chinese suppliers and consumers.
The Details
According to CCTV, the Chinese Ministry of Commerce and other relevant departments summoned Walmart executives over reports alleging the company requested its Chinese suppliers to reduce prices by up to 10% in response to each new round of U.S. tariffs. A spokesperson from the Commerce Ministry confirmed that they had looked into the media reports and contacted Walmart to seek clarification on the matter.
The Chinese government expressed strong disapproval, labeling Walmart's move as an attempt to offload the cost of the tariffs onto Chinese businesses and consumers. In a harsh statement, the Chinese government blamed Walmart for attempting to "shift the burden" of Trump's tariffs.
The China Textile Alliance, the country's top textile trade group, issued a statement on Wednesday, urging US retailers to conduct fair and reasonable international trade practices and vowing to take proactive measures to protect its members' rights and interests.
Walmart's Take
In response, Walmart China stated that they would continue to collaborate closely with their suppliers to optimize prices for customers and encouraged all parties to collaborate towards finding common ground.
The Chinese government's response seems to have been triggered by a Bloomberg report from earlier in the month which reported that Walmart was asking some of its Chinese suppliers for substantial price cuts. The report indicated that the demand for cuts, ranging from 2% to 10%, was met with resistance as it would require many suppliers to operate at a loss.
During their recent quarterly earnings call, Walmart's CEO Doug McMillon and CFO John Rainey expressed confidence in the company's ability to manage tariffs and save customers money.
Feedback from China Daily
During a press conference, Chinese foreign ministry spokesperson Mao Ning remained tight-lipped on the matter, urging queries about the Walmart summit to be directed towards competent Chinese authorities. When asked about Beijing's response to the Trump tariffs, Mao Ning asserted that China has continuously voiced its opposition to the U.S. slapping additional tariffs on Chinese imports and has taken necessary countermeasures to protect its rights and interests.
Additional Reading
- Walmart Asks Chinese Suppliers for Major Price Cuts on Trump Tariffs (Bloomberg)
- Walmart Gets an Earful From China Over Response to Trump Tariffs (Wall Street Journal)
- The Chinese Ministry of Commerce and other relevant departments interrogated Walmart executives about allegations that the retail giant pressured its Chinese suppliers to decrease prices as a response to President Trump's import tariffs, as reported by CCTV, the state-controlled Chinese media outlet.
- After CCTV's report, the Chinese government strongly condemned Walmart for attempting to shift the cost of Trump's tariffs onto Chinese businesses and consumers, with the China Textile Alliance, the country's top textile trade group, echoing this disapproval and vowing to protect its members' rights and interests.
- In a statement, Walmart China maintained that they would work in unison with their suppliers to optimize prices for customers, and despite the ongoing scrutiny concerning their response to Trump's tariffs, Walmart's CEO Doug McMillon and CFO John Rainey expressed confidence in the company's ability to manage tariffs and provide savings to customers.
