As an American retail giant, Walmart's movements in Sino-US trade are highly representative, and many textile enterprises have cooperated with it for many years. However, entering 2025, the tariff issue has put Walmart in a difficult situation. Its three strategic shifts reflect the complex game in the textile trade between China and the United States.
Walmart's Three "Changes of face" in response to tariffs
In the first stage, Walmart pressured Chinese suppliers to bear a 20% fentanyl tariff; otherwise, the cooperation would be halted. Later, the attitude was changed after being interviewed by the Chinese side. In the second stage, due to concerns that shelf shortages and rising commodity prices would affect the midterm elections, Walmart held a secret meeting with the top management of retail giants with Trump, promising to bear tariffs and resume orders to Chinese suppliers. In the third stage, due to the impact of tariffs, Walmart's net profit in the first fiscal quarter dropped by more than 12% year-on-year. It announced that the prices of goods would increase starting from the end of May. This move aroused Trump's dissatisfaction and he demanded that Walmart "swallow the tariffs".
The game between China and the United States behind the three "face-changes"
These three transformations reveal three key points: First, the United States relies on Chinese goods. About one-third of Walmart's imported goods come from China, and nearly 30% of the clothing in the US market is supplied by China. The advantage of the industrial chain is irreplaceable. Secondly, Chinese merchants have long been subject to price cuts by giants. Walmart's unreasonable demand to pass on tariffs in the early stage exposed the weak position of China's manufacturing industry in the supply chain. Thirdly, the inflationary pressure in the United States is huge. The additional tariffs have increased the annual expenditure of American households by approximately $4,000. Continuing to pass on the tariffs will impact Trump's approval rating, and enterprises will also find it difficult to bear the costs alone.
Risks in the US market have intensified
The once high-quality US market has seen a decline in purchasing power and a sudden increase in risks under the impact of inflation and tariffs. It can be seen from the country's tough attitude in dealing with this tariff that there is no longer any bottomless compromise. Trump's tenure is long and future policies are full of uncertainties. The risks in the US market have become a consensus in the textile industry. Enterprises need to re-examine the trade pattern and actively seek new ways out.
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