Walmart Announces It Has to Raise Prices

Walmart announced Thursday it will be raising prices on some items in the coming weeks due to rising costs related to President Donald Trump's tariffs.

The world's largest retailer, Walmart saw its first quarter profits fall but also reported robust quarterly sales and said it expects sales growth of 3.5% to 4.5% on Thursday, according to ABC News. 

However, the corporation is still being affected by the new tariffs, resulting in price hikes starting later this month, per CNN.

“We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Walmart CEO Doug McMillon said on an earnings call.

As a result, the "higher tariffs will result in higher prices,” McMillon said.

According to CNN, McMillon said the tariffs on China are raising costs on electronics and toys, while some food costs are rising due to levies against Costa Rica, Peru and Colombia.

President Trump originally proposed a 145% tariff on China, before reducing it to 30% and announcing a 90-day pause on some higher taxes earlier this week. Still, the current tariffs are "too high," Walmart said Thursday. 

On a positive note, Walmart is insulated from some of the taxes. Groceries account for 60% of the outlet's business, and those items are produced in the United States.

Additionally, roughly two-thirds of Walmart's merchandise is sourced domestically. 

Many companies have already begun raising prices to deal with the affects of tariffs. Overall, the Federal Reserve said last week that the new taxes have led to a 0.3% increase in prices this year.