Retailers Meet Trump Amid Tariff Concerns, Stocks Mixed

In a significant move to address growing concerns over tariffs, executives from major retailers Walmart and Target met with President Donald Trump at the White House. The meeting comes at a time when businesses are seeking relief from extensive tariffs that have disrupted global supply chains and caused unease among American consumers.

The discussion took place as Trump's high tariffs on various trading partners were temporarily suspended for 90 days, allowing numerous foreign leaders and corporate executives to negotiate more favorable terms. Representatives from Walmart, Home Depot, and Target were among the attendees at the meeting. The dialogue focused on the future direction of trade policies, with all parties expressing a commitment to providing value to American consumers.

Tariffs imposed by Trump have significantly disrupted supply chains, posing challenges for retailers, who are a major driving force of the U.S. economy. The meeting occurred amidst heightened anxiety over tariffs and Trump's threats against Federal Reserve Chairman Jerome Powell, which further exacerbated the sell-off of U.S. assets.

Despite the meeting, the stock prices of Walmart and Home Depot continued to decline, while Target's stock price saw a minimal increase of less than 1% at the close of trading. Companies have warned that their businesses may slow down in the coming months due to the implementation of import taxes. Although companies have operated under tariffs for several years, the scale and rapid changes in Trump's tariffs present a unique challenge.

Trump's tariffs, which cover a wide range of industries and trading partners, including metals, could lead to price increases for a variety of goods, from liquor and clothing to electronics and furniture. Given the sensitivity of American consumers to price changes after years of inflation, these increases are expected to further dampen consumer demand.

In addition to foreign officials seeking tariff reductions, Trump has indicated a willingness to negotiate tariff rates with business leaders. He stated, "We will also communicate with businesses. You know, we need to show some flexibility. No one should be so inflexible."

The Trump administration has excluded smartphones, computers, and other electronic products from the so-called reciprocal tariffs, providing temporary relief for global tech manufacturers like Apple and Nvidia. However, officials later indicated that the U.S. would impose specific tariffs on these products and initiate an investigation into semiconductor imports.

The uncertainty surrounding Trump's tariff policies has made it difficult for businesses to plan inventory and pricing. The 90-day tariff suspension provided temporary relief for some companies, but many warned of complex issues arising from the unknown final tariff rates.

Retailers, who sell many daily necessities, have a particularly close eye on how tariffs will impact consumers and the U.S. economy. Walmart, the world's largest retailer, operates a diversified supply chain, with about two-thirds of its products sold in the U.S. being sourced domestically. The company's management has stated that they are working to keep prices low, with procurement teams carefully considering the quantities of goods needed and how tariffs might affect prices. So far, there has been no indication of consumers stockpiling goods as they did during the COVID-19 pandemic.

Target has not disclosed the proportion of its products sourced from overseas but has indicated that price increases will vary by product category. The company is discussing next steps with suppliers and employees. Home Depot reported that more than half of its products are sourced in North America.