Transcript
David Pakman (0:07)
Welcome, everybody. Walmart has just fired a warning shot that every American shopper should be paying attention to. It's going to hit Trump supporters harder, as is often the case with these policies that have a sort of a real trickle down effect in the economy. This is about Walmart's latest earnings report. Walmart posted mixed results. Ok, some good, some bad. But the real story is not their revenue numbers. It's about what Walmart says is coming next and that's higher prices. And they're saying it's the Donald Trump tariffs that are going to lead to that. The Walmart CEO Doug McMillan pointed at Trump's tariffs and says, we aren't able to absorb all the pressure. There was this idea some of these businesses will just absorb the tariffs and say we'll just make less money. And Walmart is now saying in investor documents they're not going to be able to do it. It doesn't seem to be politics so much as it seems to be an economic reality that's going to hit people's grocery bills and expenses for a whole variety of products that people buy. We saw a 4.5% increase in same store sales in the United States at Walmart, but overall revenue missed expectations. Fine. They beat earnings estimates. Some numbers are up, some numbers are down, but the path forward is one where you and I will be paying for it. And the kicker is that this is going to hit Donald Trump's base the hardest. Because sure, Walmarts are everywhere, but especially in red states, Walmart dominates. And in fact, there are more Walmart stores per capita in deep red areas of the United States than really almost anywhere else. In some rural counties, Walmart is the only place where you can go and get the products that Walmart offers. So when Walmart raises prices because of Trump's tariffs, it is Trump voters that are going to feel it first and that are going to feel it the worst. So break down the process. Trump slaps tariffs on imports. Some of them stick, some of them don't. Some are suspended for 90 days, some are not. Walmart can't absorb the cost. They have apparently thin margins. Prices go up at the checkout line. And the voters that are most loyal to Donald Trump, who rely on Walmart for affordable groceries and diapers and in many cases medicine, they are the ones that get absolutely slammed and they won't even see it coming. And meanwhile, on the political side, Trump's out there saying tariffs are a win, China's paying for everything. But Walmart is confirming what economists have said for months and what the economic world has known for decades, which is that tariffs are a tax on American consumers. You can call it a hidden tax or not, although some retailers are making it clearer that it is not hidden. And McMillan said about the Chinese tariffs, even at the reduced levels announced this week, Even during this 90 day pause where the tariff on China is only 15%, it still is too much pricing pressure for Walmart to absorb it. So the translation is that Trump is increasing your cost of living. It's happening sort of quietly, it's happening steadily and it's happening on purpose because Trump did say it might be a little painful for a bit, but it's going to be worth it. Joe Feldman at Telse Advisory Group says that the biggest wild card for the retail space for 2025 is tariffs. What's going to happen with tariffs? Walmart might weather the storm better than others because they're so huge, but American families aren't able to do it. So if you live in a red state, if you shop at Walmart, this is what Trump's economic policy looks like in practice. It's less America first and more sort of like you last. And it's gone well beyond being a culture war. It is now a wallet war. And Walmart is telling us which side is losing. Sadly, it's the average consumer. Kristi Noem got absolutely annihilated yesterday on live television by Congresswoman Delia Ramirez. This was really, you know, some, some on Twitter posted that this was awe inspiring. I don't know if it was awe inspiring, but this is exactly how the Democratic Party needs to be dealing with these unserious people that are in this administration. Let's just get into it. I don't think we need too much more of an introduction to this to understand what's going on. Let's listen.