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Trump’s Trade War Threatens Walmart’s Low Prices 

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Trump’s Trade War Threatens Walmart’s Low Prices | Mises Wire

In 1962, businessman Sam Walton had an entrepreneurial objective in mind: Offer shoppers the lowest prices possible. From forcing US suppliers to slash costs to finding cheap imports abroad, Walmart became an iconic global brand, generating $500 billion in annual revenues because of its ability to enhance the consumer’s purchasing power, enabling the rise of the middle class.

The Federal Reserve may have depreciated the value of the greenback, but $100 at Walmart can get you quite far. With a single Benjamin, you can purchase a tea kettle, bed sheets, the latest bestselling novel, five pairs of underwear, and dinner for tonight. And, noticing an array of opportunities in the marketplace, Walmart is expanding its arsenal, specializing in walk-in care, ecommerce, and banking.

For all the flack that Walmart receives from the left for ostensibly destroying mom and pop shops, the company has a decent business model that appears to be satisfying the customer.

But those lowest prices guaranteed may come under threat. As the US government embarks upon a bitter trade dispute with China, Walmart is warning that it may be forced to raise prices due to tariffs.

If Sam Walton were around today, he’d be apoplectic, staging a sit-in on Capitol Hill — or, perhaps sending his team of lobbyists to do it for him.

Walmart’s Trade Woes

President Donald Trump and his administration recently escalated the trade spat with the world’s second-largest economy by slapping 10% tariffs on approximately $200 billion worth of Chinese products, ranging from mattresses to Christmas items to travel bags. The first round of levies will go into effect on Monday, and the second round — 25% tariffs — will be instituted on January 1, 2019.

China immediately retaliated by announcing its own series of taxes on US imports.

 

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Francesco Saverio Abbruzzino is the editor at large of  The Uncensored Report & The Scoop News

 

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