Walmart speaks out against Trump proposal in an unprecedented warning to US shoppers
Walmart is warning against President Trump's proposed border adjustment tax, saying it would raise the cost of goods for US shoppers.
"The border tax is a concern," Walmart Chief Financial Officer Brett Biggs said Tuesday on a call with reporters. "Anything that would raise prices for customers in the US is a concern for us."
The company had previously joined a coalition of retailers against the tax, but this is the first time executives have spoken out against it.
Trump proposed the tax, which would impose a 20% levy on Mexican imports, as a way to help pay for a wall along the US-Mexico border. The tax is now part of the US House Republican tax reform proposal.
Biggs said Walmart is generally in favor of tax reform, but not when it involves taxing imports. It's estimated that more than 97% of all clothing and shoes sold in the US are imported.
As the world's largest clothing retailer, that poses a huge problem for Walmart.
The costs of Mexican imports would likely rise under the proposed tax. Walmart would either have to eat those costs and take a hit to profitability, or pass the costs onto customers. It seems like the latter option is more probable, according to Biggs' statements.
Biggs made the comments on a call to discuss Walmart's fourth-quarter earnings.
For the quarter, revenue increased 1% to $130.9 billion and US same-store sales, or sales at locations open at least a year, jumped 1.8%, marking the biggest quarterly increase in four years.
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