Tariffs, Inflation, and the American Cart: Will Walmart Pass On the Tariff Burden to Consumers?

Here we are again—back to talking tariffs, retail giants, and the delicate dance between politics and prices. Over the weekend, newly appointed Treasury Secretary Scott Bessent appeared on CNN, casually yet clearly signaling that the economic levers of the Trump administration are shifting back into motion, with implications that could land right in your shopping cart.

Specifically, Bessent addressed concerns about Trump’s proposed tariffs, which aim to put more pressure on imports—especially from China. His comment that “Walmart will be absorbing some of the tariffs, some may get passed on to consumers” carries all the familiarity—and ambiguity—of past economic cycles.

And while Bessent tried to reassure Americans that “inflation will remain in line,” the subtext was clear: consumers are right to be uneasy. After all, inflation peaked in June 2022 at a 40-year high of 9.1%, largely driven by the post-pandemic supply crunch, federal stimulus, and the geopolitical shocks from Russia’s invasion of Ukraine.

Walmart Is a Buffer, But Not a Fortress

Walmart’s role here is interesting. As the country’s largest retailer—and perhaps its most price-sensitive brand—its decisions reverberate throughout the economy. If Walmart says it can “absorb” some tariff costs, that might sound comforting. But let’s be honest: they’re not a charity.

At some point, those costs trickle down, either through higher prices, smaller product sizes (yes, shrinkflation is still a thing), or reduced employee hours. According to Walmart’s own earnings reports, even minor disruptions to cost structures have ripple effects. They run on razor-thin margins, and any external pressure—like a tariff—forces a rebalancing act.

It’s also worth noting that tariffs are essentially taxes on imports, not foreign producers. The burden often lands on U.S. companies and consumers, not Chinese factories. This isn’t a controversial take—it’s backed by a 2019 analysis by the Congressional Budget Office, which found that American businesses bore the brunt of Trump’s first round of tariffs.

Inflation Memory Is Still Raw for Many Americans

Bessent’s mention of inflation under Biden wasn’t subtle—it was a political jab cloaked in economic rationale. But he’s not wrong that people still carry a sense of sticker shock. Whether it was eggs soaring past $6 a dozen, or families rethinking summer vacations because of $5-per-gallon gas, the wounds are still fresh. And consumer confidence, as tracked by The University of Michigan, is only just starting to recover from its 2022 lows.

So when Bessent says he doesn’t blame people for being “skittish,” it resonates. It’s a recognition that economics is as emotional as it is empirical. People don’t just vote with their wallets—they feel with them, too.

A Bigger Game of Economic Chess

There’s also the larger question of whether tariffs are an effective long-term tool. Trump and his advisors argue they’ll force countries like China to play fair, particularly around manufacturing and intellectual property. But critics—both left and right—point out that tariffs tend to disrupt supply chains more than correct trade imbalances.

A Brookings Institution report found that previous tariffs during Trump’s first term raised costs for American manufacturers, especially in sectors like automotive and agriculture. Meanwhile, trade partners responded with their own tariffs, leading to retaliatory spirals that hurt U.S. exporters.

And even if Walmart shields consumers this time around, not every retailer can—or will. Smaller chains, niche brands, and independent businesses often lack the scale to negotiate better shipping rates or diversify their sourcing. Main Street could take the hit Walmart can dodge.

What Happens Next?

To be honest, we’re in wait-and-see territory. Trump’s tariff strategy is still taking shape, and while Bessent’s comments give us a glimpse, they don’t offer full clarity. What we do know is that inflation is deeply tied to perception. If enough people expect prices to rise, they often do—just from behavioral momentum alone.

That’s the tricky part. Once inflationary fears seep into public consciousness, they’re hard to dislodge. No matter how many times Walmart promises stability, even small changes at the checkout line can spark a broader unease.

This moment feels like a pivot—perhaps even a rerun. The players are familiar, the policies recognizable, but the stakes are higher now. After the economic turbulence of the last few years, consumers aren’t just watching—they’re bracing.