Walmart speaks out against Trump proposal in a warning to US shoppers
Walmart is warning against one possible element of President Donald Trump’s tax plan, saying it could raise the cost of goods for US shoppers.
“The border adjustment tax, for us, is a concern,” Walmart CFO Brett Biggs said Tuesday on a call with reporters. “Clearly anything that would potentially raise prices for our customers in the US is a concern for us.”
A border adjustment tax would affect imports from other countries while leaving exports exempt.
Though his official tax plan is not expected to arrive for a few days, Trump has previously floated ideas regarding corporate taxes that would favor US exporters over importers.
Walmart had previously joined a coalition of retailers against a border adjustment tax but this is the first time executives have spoken out against the possibility. Biggs said Walmart was generally in favor of tax reform but not when it involved taxing imports.
An estimated 97% of all clothing and shoes sold in the US are imported, which is why such a change in US tax policy would most likely have a dramatic effect on Walmart, the world’s largest clothing retailer.
If such a tax were introduced, Walmart would most likely need to either eat those costs and take a hit to profitability or pass the costs on to customers.
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.