China Issues Veiled Threat to Walmart After Retailer Asks Chinese Vendors for Price Cuts To Offset Tariffs

Tensions between China and the U.S. may be reaching recent heights over the continued sparring instigated by President Donald Trump’s doubling of tariffs on imports from Chinese suppliers, but according to Axios, Walmart is getting involved as well.

On March 11, Walmart executives met with officials from China’s Ministry of Commerce to address the retailer’s recent request for substantial price cuts from its Chinese suppliers. The Chinese officials appeared to take this request seriously, and both parties seemed to make some concessions while at the bargaining table. The retailer had reportedly asked its vendors to slash prices by up to 10%.

The following day, however, state broadcaster China Central Television (CCTV) issued what seemed to be a veiled threat targeting the blue-and-yellow brand, stating “If Walmart insists” on pursuing deep discounts from Chinese suppliers, “then what awaits Walmart is not just talk.”

And as CNN reported, CCTV shared a post last week after the big-box retailer’s initial position was made known. That post read: “Walmart’s demand for Chinese suppliers to bear the full tariff burden is unreasonable and disrupts fair competition and international trade order.”

Quoting a Reuters estimate, Walmart was said to have sourced about 60% of its imports — for the period spanning January through August 2023 — from China, per FOX Business. That figure was down from 80% in 2018, as the retailer attempted to, and continues to attempt to, diversify sourcing of its inventory.

Walmart Is ‘Playing With Fire’

Finally, Walmart could be making a significant gamble with this recent negotiation tactic concerning its Chinese suppliers.

Axios cited a Bloomberg analysis of the overall portrait being painted. “The retailer has historically had strong bargaining power over its Chinese suppliers and requests for lower prices have mostly been met,” Bloomberg indicated, citing sources familiar with the matter. “But the scope of the recent requests are unusual and leaves manufacturers weighing whether to absorb the costs to maintain a longer-term business relationship.”

For his part, Axios reporter Nathan Bomey offered his thoughts on the ongoing situation succinctly.

“Walmart is playing with fire but retains a degree of leverage because it’s such an enormous buyer and because it can source more products from other countries if Chinese suppliers don’t cooperate,” Bomey wrote.