Walmart has found itself caught in the middle of an intensifying trade war between the United States and China.
Chinese officials confirmed on Thursday that they had met with executives from the U.S. retail giant following reports that Walmart had pressured its Chinese suppliers for discounts to offset rising tariffs imposed by Donald Trump.
“Our relevant departments have reached out to Walmart to further understand the situation, and the company has provided an explanation,” He Yongqian, a spokesperson for the Commerce Ministry, said during a regular press briefing. However, she did not offer additional details.
Last week, Trump doubled tariffs on all Chinese imports to 20%. In retaliation, China imposed a new round of tariffs targeting U.S. agricultural imports, which went into effect on Monday.
Businesses are struggling with the uncertainty caused by Trump’s unpredictable tariff policies, which have escalated tensions between the world’s two largest economies.
Retailers have told that they may be forced to raise prices at a time when consumers are already feeling the financial strain of inflation.
Bloomberg reported last week that Walmart sought to address its tariff-related challenges by requesting some of its Chinese vendors to reduce prices by as much as 10% to help offset the impact of U.S. levies.
On Wednesday, China’s state broadcaster CCTV’s official social media account, Yuyuantantian, revealed in a post that Chinese authorities had summoned Walmart representatives for a meeting on Tuesday.
Walmart Company“Walmart’s demand for Chinese suppliers to bear the full tariff burden is unreasonable and disrupts fair competition and international trade order,” the post stated.
In what appeared to be a warning, the post further suggested that Chinese authorities might “take further action” if Walmart continued to insist on price cuts.
While negotiating price reductions with suppliers is common practice in China, it is particularly difficult at the moment since many suppliers are already operating on razor-thin profit margins.
In a statement, Walmart reaffirmed its commitment to helping people “save money and live better.”
“Our conversations with suppliers are all aimed at making our purpose a reality for millions of customers, and we will continue to work closely with them to find the best way forward during these uncertain times,” the company stated.
Walmart’s ties to China extend beyond sourcing products. The retailer has maintained a significant presence in the country since entering the market in 1996, when it opened its first superstore and Sam’s Club in the southern megacity of Shenzhen.
Today, Walmart operates in more than 100 Chinese cities. In its most recent financial year, the company reported a 16% increase in net sales in China, reaching $17 billion compared to the previous year.
