Trump Meets with U.S. Retail Giants, Walmart and Target Might Feel the Pain Differently

TradingKey - On Monday, April 21, U.S. President Donald Trump met with the CEOs of three major American retailers at the White House: Doug McMillon of Walmart, Brian Cornell of Target, and Ted Decker of Home Depot.

After the meeting, all three retail giants issued similar statements, describing the discussions as "productive" and "constructive."

Trump has now launched a global tariff war, imposing significantly higher tariffs on China—a country that plays a critical role in the global supply chain—compared to other nations. This move poses challenges for U.S. retailers.

The impact of these tariffs varies across different retailers, such as Walmart and Home Depot. For instance, two-thirds of the goods Walmart sells in the U.S. are made domestically, but Target, a furniture and household goods giant, sources the majority of its products overseas, with China accounting for roughly 50% of its supply chain.

Overall, high tariffs will increase import costs, erode corporate profits, and reduce household wealth for American consumers. Trade associations have pointed out that more tariffs mean greater anxiety for both U.S. businesses and consumers.

Earlier in April, due to the potential impact of Trump's tariffs, Walmart withdrew its first-quarter revenue guidance. The company had initially projected first-quarter revenue growth of 0.5% to 2.0%. CEO McMillon stated that the environment had changed, and they were uncertain about what might happen. Their focus would remain on keeping prices as low as possible.

JPMorgan noted that, given the uncertainty brought by Trump's trade negotiations, future corporate earnings expectations are likely to decline. Some companies have already withdrawn their earnings guidance, and JPMorgan expects more to follow suit.

JPMorgan analysts have revised their earnings growth forecast for S&P 500 companies over the next month from a previous estimate of 5% growth to flat, with the possibility of a 5% decline.