WSJ What’s News: U.S. Retail Giants Have Kept Prices Low. But How Long Can It Last?
Release Date: April 29, 2025

Introduction

In the April 29, 2025 episode of WSJ What’s News, hosted by Pierre Bienname and Alex Osola of The Wall Street Journal, the discussion centers on how U.S. retail giants have managed to keep consumer prices low amidst rising tariffs and what the future holds for this strategy. The episode delves into the tactics employed by major retailers like Amazon, Walmart, and Target, the broader impact on the supply chain, and touches on related developments in the logistics and energy sectors.

Amazon’s Tactical Response to Tariffs

Amazon finds itself at the forefront of the retail sector's battle to maintain low prices in the face of escalating tariffs. Initially, the company considered displaying the impact of tariffs during the online checkout process on its budget-friendly platform, Hull. However, after pressure from President Trump and the White House, Amazon retracted this plan.

Pierre Bienname reports, “Amazon was forced to play down a report that it was considering displaying the impact of tariffs during its online checkout” (01:05). The company clarified that the idea was never approved and will not be implemented, stating, “Amazon declined to comment on the phone” (02:00).

Retail Giants’ Strategies to Maintain Low Prices

Despite the imposition of tariffs, retail powerhouses like Walmart, Target, and Home Depot have successfully kept consumer prices from skyrocketing. However, industry insiders express skepticism about the sustainability of this strategy. In a recent meeting with President Trump, the CEOs warned, “higher prices would be difficult to avoid” and indicated potential scarcity of certain products if consumers opted out to avoid tariff costs (02:04).

Wall Street Journal reporter Shane Shiflett explains, “Some retailers have paused shipments from China and other countries, relying on existing inventory to avoid raising prices” (02:27). Additionally, these companies have implemented cost-cutting measures, such as reducing office perks, and are pushing suppliers to absorb tariff costs to prevent price hikes (02:58).

The Role of Independent Merchants on Amazon

Amazon hosts a significant number of independent merchants, accounting for approximately 60% of its sales. These merchants operate within Amazon’s pricing framework, where attempts to raise prices by substantial margins (e.g., 30%) result in de-emphasis of their listings on the platform (03:29). This system ensures that price increases by third-party sellers are minimal, helping Amazon maintain its competitive pricing.

UPS’s Operational Shift Away from Amazon

In response to changing market dynamics, United Parcel Service (UPS) announced plans to cut 20,000 operational positions this year to reduce expenses (05:09). This move follows UPS’s decision in January to decrease the number of packages delivered for Amazon, which previously accounted for about 12% of UPS’s revenue (05:14). By incorporating more automation into its facilities, UPS aims to lessen its dependency on labor, signaling a strategic shift away from its relationship with Amazon (05:39).

Amazon’s Ambitious Project Kuiper

Beyond retail, Amazon is making significant strides in the aerospace sector with Project Kuiper. The company launched 27 satellites into space as part of its effort to compete with SpaceX’s Starlink and other low Earth orbit (LEO) satellite networks aiming to provide global internet access (05:56). Wall Street Journal’s Micah Madenberg highlights that Amazon plans to invest over $10 billion into this initiative, seeking to establish a robust LEO satellite network that offers higher speeds and lower latencies (06:18). This venture represents Amazon’s ambition to secure another major franchise to complement its existing businesses like Amazon Web Services.

BP’s Strategic Shift Back to Fossil Fuels

In a notable shift within the energy sector, BP announced plans to increase its U.S. oil and gas production by more than 50% by 2030, simultaneously slashing investments in green energy initiatives (08:08). Matthew Dalton, covering energy for The Wall Street Journal, explains that BP is redirecting its capital expenditure towards traditional fossil fuels due to insufficient market rewards for its diversified energy approach. BP aims to boost U.S. production from 650,000 barrels per day to over one million by 2030, focusing on both onshore operations and the Gulf of Mexico (08:31).

Market Reactions and Trade Tensions

The episode also covers the stock market’s response to recent trade developments. Following U.S. Commerce Secretary Howard Lutnick’s announcement of a trade deal with an unnamed country, the Dow Jones Industrial Average rose by three-quarters of a percent, while the NASDAQ and S&P 500 each gained about half a percent (08:38). However, the S&P 500 still recorded its largest loss in the first 100 days of a new presidential term since 1973 (10:52).

Amidst these developments, China issued a strong statement rejecting U.S. tariff policies, emphasizing its commitment to resisting what it termed as “bullying tactics” aimed at maintaining American hegemony (11:16). The Chinese Foreign Ministry spokesperson declared, “China won't kneel down because we know standing up for ourselves keeps the possibility of cooperation alive while compromise snuffs it out” (11:21). This stance underscores the persistent tension between the two economic superpowers and the challenges in reaching a comprehensive trade settlement.

Conclusion

The episode of WSJ What’s News provides a comprehensive overview of how U.S. retail giants are navigating the complex landscape of tariffs and global trade tensions to keep consumer prices low. While companies like Amazon and Walmart have implemented various strategies to absorb costs and maintain their pricing structures, the sustainability of these measures remains uncertain. Additionally, developments in logistics, such as UPS’s shift away from Amazon, and strategic moves in the energy sector by BP, highlight the broader economic adjustments taking place. The ongoing trade tensions between the U.S. and China continue to cast a shadow over these efforts, indicating that the battle to keep prices low is far from over.

Notable Quotes:

• Pierre Bienname: “Amazon was forced to play down a report that it was considering displaying the impact of tariffs during its online checkout” (01:05).

• Shane Shiflett: “Some retailers have paused shipments coming from China and other countries, relying on existing inventory to avoid raising prices” (02:27).

• Matthew Dalton: “They have shifted away from a strategy of investing in a broad suite of different energy technologies, from renewables such as wind and solar, to they've really pivoted sharply towards just oil and gas” (08:42).

• Chinese Foreign Ministry Spokesperson: “China won't kneel down because we know standing up for ourselves keeps the possibility of cooperation alive while compromise snuffs it out” (11:21).

This summary was produced based on the transcript provided and adheres to the guidelines for creating a comprehensive and engaging overview of the podcast episode.