Arkansas-based Walmart, the world’s largest retailer that has traditionally targeted America’s working and middle class, warned that the president-elect’s plans to raise tariffs across the board will be felt by ordinary consumers.

“The rates are going to be inflationary, there’s no doubt about that,” Walmart Chief Financial Officer John David Rainey told Fox News on Thursday.

However, that is not the message that the Trump campaign delivered to the country during the 2024 election race. During the campaign, the former president wondered whether voters were better off than they were just under five years ago, when the seeds of inflation were sown with the COVID-19 outbreak.

The resounding answer was no, as two-thirds of the population was dissatisfied with the state of the economy. From coast to coast, Americans felt deep-seated resentment over rising prices for everything from gasoline to groceries to restaurant visits.

Trump labels the tariffs a “tax on foreign countries” with no downsides

Then came the Trump campaign, which repeatedly portrayed tariffs as a panacea. They would fill the nation’s coffers, reduce the budget deficit, bring back manufacturing jobs — and perhaps even eliminate the need for income taxes. And the costs? Well, those would be borne by others – especially US strategic rival China, which could face tariffs of up to 60% on goods it exports.

“A tariff is a tax on a foreign country, that’s what it is whether you like it or not,” Trump promised his supporters at an August rally in the key state of Pennsylvania. “It’s a tax on a country that defrauds us and steals our jobs.”

The National Retail Federation, however, begged to differ. Unless exporters are both willing and able to lower their factory prices to maintain volumes, the costs will be borne entirely by the Americans – either directly in the form of tariffs, indirectly through higher prices passed on to the customer, or in a different way. of them.

“A tariff is a tax paid by the U.S. importer, not the foreign country or the exporter,” NRF Vice President Jonathan Gold said in a statement released a day before the November election.

Advantages and disadvantages of tariffs

Limited tariffs targeting strategic economic sectors – those vital to national security, for example – may be sensible, and every country imposes levies in some way. Some may enter through the back door by demanding compliance with certain regulations to protect domestic sectors such as farming and agriculture.

And while economic incentives such as tax breaks can encourage migrant manufacturers to move their factories back into the country, tariffs can also be effective.

Yet they can also cause companies downstream of these producers to shrink as they have to bear higher costs. As a result, they could inadvertently lead to a loss of American jobs when all effects are accounted for.

Even for U.S. goods that may not require foreign inputs, tariffs can also be inflationary because they are an invitation for domestic suppliers to raise prices simply to boost shareholder profits. Finally, if left unchecked, they could spark a retaliatory trade war.

Walmart warns: ‘We are not immune’ and costs will be passed on

That is why most industrialized countries have traditionally followed economic orthodoxy by trying to dismantle tariffs, and instead specialize in goods and services where they enjoy a competitive advantage.

The resulting era of highly efficient, globalized supply chains caused prices for many goods to fall, with flat-screen television sets being an often cited example.

This could now come to an abrupt end if Trump imposes a blanket tariff on all imported goods, which could range from 10% to 20%.

Walmart finance chief Rainey said the major retailer would do its utmost to cushion the blow, but pain was inevitable.

“We’re going to work with our suppliers and with our own private label range to continue to try to bring prices down for customers,” he told Fox News. “But we are not immune and rates will be inflationary for customers.”