Walmart to Raise Prices Due to Tariffs, Setting the Tone for Other Retailers

Summary

WSJ What’s News Episode: Walmart to Raise Prices Due to Tariffs, Setting the Tone for Other Retailers Release Date: May 15, 2025

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1. Introduction

In this episode of WSJ What’s News, anchor Pierre Bienname delves into significant developments affecting the American economy and global politics. From major retail price shifts to federal policy adjustments and international financial crimes, the discussion provides comprehensive insights into events shaping market dynamics.

2. Walmart's Strategic Price Increases Amid Tariffs

Timestamp: [00:18] - [02:19]

Pierre Bienname opens the episode by addressing Walmart's decision to raise prices in response to ongoing tariffs. As the largest retailer in the United States, Walmart's move is expected to influence other retailers across the nation.

Jim Fowler, Nationwide EVP and CTO, elaborates:

“Walmart is saying that era is coming to an end. They’re in the process of raising prices because of tariffs, and there will be more to come on their shelves. This acknowledgment by such a major retailer sets the tone for others to likely adopt similar approaches.”
[00:35]

Fowler further explains the broader impact:

“Walmart is managing profits across a wide array of goods, not just imported products, which means other retailers might follow suit to maintain their financial health.”
[01:25]

Sarah Nassauer, WSJ retail correspondent, adds that Walmart's actions could have a ripple effect throughout the retail industry and the broader U.S. economy.

3. Federal Reserve's Policy Framework Adjustments

Timestamp: [02:19] - [03:16]

The discussion shifts to Jerome Powell, Federal Reserve Chair, who announced that the central bank is revising its policy-setting framework to better address the current economic landscape post-pandemic.

Sarah Tucker highlights Powell's remarks:

“The economic environment has changed significantly since 2020, and our review will reflect our assessment of those changes. Longer-term interest rates are higher now, driven largely by real rates.”
[02:38]

Powell's adjustments indicate a shift towards accommodating more volatile inflation and frequent supply shocks, presenting challenges for both the economy and central banking strategies.

4. Coinbase's Cybersecurity Breach

Timestamp: [03:16] - [04:53]

Pierre Bienname reports on a significant cybersecurity incident at Coinbase, where cybercriminals accessed customer data and demanded a $20 million ransom, which the company declined to pay. The breach potentially affects tens of thousands of users and could cost Coinbase between $180 and $400 million to resolve.

Key details include:

• Stolen data encompassed personal information, including masked Social Security numbers and government IDs.
• Coinbase is collaborating with law enforcement to investigate the breach.
• The incident occurs as Coinbase is set to join the S&P 500, marking a pivotal moment for cryptocurrency’s mainstream acceptance.

Note: The following segment contains a paid advertisement and has been omitted from this summary.

5. Chinese Money Laundering Operations in U.S. Banks

Timestamp: [05:25] - [08:37]

Pierre Bienname introduces a troubling trend where Chinese money launderers have been making substantial deposits at major U.S. banks, including Chase, Bank of America, and Citibank, funneling approximately $50 million from drug trafficking over four years.

Dylan Tokar, WSJ financial crime and regulation reporter, provides deeper insights:

“There’s a partnership between Chinese money brokers and transnational crime organizations like the Sinaloa Cartel. Brokers seek physical currency to sell to their customers, using the cash obtained from cartels to infiltrate the traditional banking system.”
[06:02]

Tokar critiques the current anti-money laundering (AML) systems:

“Banks are creating extensive reports, but these are often not thoroughly screened by law enforcement unless there’s an existing case. This loophole allows money launderers to exploit the system without significant repercussions.”
[07:19]

The investigation led to the charging of Shai Zhang and 23 others, who are scheduled for trial in October. Zhang has pleaded not guilty, and efforts to contact his lawyer have been unsuccessful.

6. Supreme Court Hearing on Birthright Citizenship

Timestamp: [08:37] - [11:06]

The episode covers a pivotal Supreme Court hearing regarding President Trump's attempt to abolish birthright citizenship. The Court examined whether federal judges can issue injunctions that block government policies affecting large populations.

Jess Bravin, Supreme Court correspondent, explains:

“The key issue was whether federal judges can issue injunctions that apply across the entire country, especially for policies like the executive order limiting birthright citizenship. Over 20 Democratic-led states have injunctions in place, creating a patchwork of enforcement.”
[08:55]

Bravin discusses the broader constitutional implications:

“If the Court agrees with the administration, it could set a precedent where every individual affected by a policy must file separate lawsuits to challenge it, raising significant concerns for collective rights and large-scale policy enforcement.”
[09:49]

7. U.S.-Iran Nuclear Negotiations

Timestamp: [11:06] - [End]

Pierre Bienname concludes the episode by touching on the latest developments in U.S.-Iran relations. American negotiators presented a nuclear proposal to Iran shortly before President Trump's statement suggesting the U.S. was nearing an agreement to avert potential military strikes.

Key points include:

• The proposal aims to delay Iran's nuclear capabilities, which U.S. officials believe could result in weaponization within months.
• Iranian counterparts have taken the proposal back to Tehran for further deliberation.
• Trump's remarks emphasized that a deal would prevent military action, highlighting the delicate balance in international diplomacy.

8. Conclusion

The episode of WSJ What’s News provides a thorough examination of critical issues impacting the U.S. economy and international relations. From Walmart's influential price adjustments and the Federal Reserve's strategic shifts to cybersecurity threats and international financial crimes, listeners gain a multifaceted understanding of the forces shaping today’s market and political landscapes.

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Produced by Anthony Banci with Supervising Producer Michael Kosmides.

Transcript

[Sarah Tucker]

Tech leaders and boards are teaming up to transform businesses. On the latest episode of techfluential Nationwide board members Sarah Tucker and Jim Fowler Nationwide EVP and CTO take us behind the scenes to show how it can be done. Techfluential, a podcast from Deloitte and custom content from WSJ.

[Pierre Bienname]

Walmart plans to raise prices because of tariffs and other retailers will likely follow.

[Jim Fowler]

A lot of companies imported ahead of tariffs so that stores and their suppliers are still working through that supply. But Walmart is saying that era is coming to an end.

[Pierre Bienname]

And Fed Chair Jerome Powell speaks of a new strategy for the central bank in a world where very low interest rates are not guaranteed. Plus how Chinese money launderers are flooding US Banks with bags of cash from drug cartels. It's Thursday, May 15th. I'm Pierre Bienname for the Wall Street Journal, filling in for Alex Osila. This is the PM edition of what's the top headlines and business stories that moved the world today. Trade war Price increases are coming for American shoppers Walmart says it will raise prices in response to tariffs. The retail giant, which counts 90% of Americans as customers, is the biggest company so far to signal price hikes because of tariffs. Sarah Nassauer writes about large retailers for the Wall Street Journal. She says Walmart's price increases stand to ripple through the retail industry and the US Economy.

[Jim Fowler]

So Walmart this morning when it reported earnings said that right now they're in the process of raising prices because of tariffs and that there will be to come on their shelves. And that was a pretty significant moment because they're, you know, huge retailer where most Americans shop at least sometimes. And they're just acknowledging that this is coming. It's significant for other retailers as well because Walmart is one of the biggest and you know they're going to sort of set the tone. So they're saying this that means other retailers are probably going to have similar approaches. The other aspect of this is that it doesn't mean that just because a product is imported that that product will become much more expensive, though in some cases that will certainly happen. A retailer like Walmart is going to look at the whole store, everything they sell and try to manage their profits across that whole swath of goods.

[Pierre Bienname]

Federal Reserve Chair Jerome Powell said today the central bank was in the process of making adjustments to its overarching policy setting framework. That's to account for meaningful changes in the outlook for inflation and interest rates following the pandemic in 2020. Powell spoke at a research conference at the Fed's headquarters in Washington.

[Sarah Tucker]

The economic environment has changed significantly since 2020 and our review will reflect our assessment of those changes. Longer term interest rates are a good deal higher now, driven largely by real rates. Given the stability of longer term inflation expectations, many estimates of the longer run level of the policy rate have risen, including those in the summary of economic projections. Higher real rates may also reflect the possibility that inflation could be more volatile going forward than during the inter crisis period of the 2010s. We may be entering a period of more frequent and potentially more persistent supply shocks, a difficult challenge for the economy and for central banks.

[Pierre Bienname]

Framework refers to how the Fed spells out its strategy for setting interest rates. The central bank adopted its current framework five years ago and began a review of it. Powell's remarks today indicate the Fed would retract key changes it made five years ago. US Indexes closed mixed after a midday rally faded. The S&P 500 rose 0.4%, the Dow rose 0.7% and the Nasdaq Composite fell nearly 0.2%. The cryptocurrency exchange Coinbase said today that cybercriminals stole customer data and sought a $20 million ransom, which the company refused to pay. Coinbase said that while customer funds weren't accessed, the stolen data included personal information such as names, addresses, phone numbers and email addresses masked Social Security and bank account numbers, government ID images like driver's licenses and passports and account data such as balance snapshots and transaction histories. Tens of thousands of users were potentially affected, according to a regulatory filing. Coinbase estimates the incident could cost them between 180 and $400 million so as to fix the underlying issues and reimburs. The company said it is working with law enforcement to investigate the incident. The breach came as Coinbase is slated to join the S&P 500 next week, a development celebrated by crypto proponents as a key step toward mainstream adoption. Coming up, how drug cartel money is laundered at US Banks by Chinese money launderers that's after the break.

[Amazon Prime]

This episode is brought to you by Amazon Prime. From streaming to shopping, prime helps you get more out of your passions. So whether you're a fan of true crime or prefer a nail biting novel from time to time, with services like Prime Video, Amazon Music and fast free delivery, prime makes it easy to get more out of whatever you're into or getting into. Visit Amazon.comprime to learn more.

[Pierre Bienname]

Across Los Angeles County, Chinese money launderers in recent years have allegedly made six figure deposits at Chase, bank of America and Citibank branches. The network allegedly handled some $50 million in proceeds from drug trafficking over four years. According to law enforcement officials and court records, similar operations are active in plain sight around the country, hiding the staggering revenue brought in by cross border drug smuggling cartels. Dylan Tokar covers financial crime and regulation for the Wall Street Journal and he joins me now. Dylan, let's follow the money here. How does this cash get laundered by Chinese criminals?

[Dylan Tokar]

What we were looking at here was this partnership that has formed between these Chinese money brokers and transnational crime organizations like the Sinaloa Cartel. Basically what's happening is there's this huge demand to get cash out of China and these brokers are looking for physical currency that they can sell to their customers. And that quest for more physical currency has led them to people like the Sinaloa Cartel which have on their hands a lot of cash that they are trying to get rid of and find a way to put it into the traditional banking system. The case we dug into in this story takes place in Los Angeles County. The investigators in that case spent something like four years investigating a Chinese money broker named Shai Zhang. And they were able to show how this money is tied to drugs, specifically the Sinaloa Cartel, how Zhang sold this money to Chinese customers in the LA area, and then finally how they were also pausing a good amount of this money at banks.

[Pierre Bienname]

What have US banks said about their being used in this money laundering manner?

[Dylan Tokar]

We know that Zhang used three of the biggest banks in the U.S. that's Chase, bank of America and Citibank. Those three banks told us we fulfilled our legal obligations with respect to this case or just generally. But the banks have a lot to say about the anti money laundering system. More generally speaking, the system creates a lot of reports and a lot of those reports may not be thoroughly screened by law enforcement. More often if law enforcement use them, it's when they already have a case. So we have a system that is pretty costly for banks, requires a lot of work on their end, but doesn't necessarily lead to specific law enforcement actions. And the Chinese money launderers in this case and generally were taking advantage of that fact. So cy Zhang and 23 others were charged by the U.S. attorney's Office in Los Angeles following this investigation and their case is ongoing. They are scheduled to go to trial in October. At the moment, Zhang has pleaded not guilty. We reached out to his lawyer multiple times but didn't receive any response.

[Pierre Bienname]

Dylan Tokar covers financial crime and regulation for the Wall Street Journal. Dylan, thanks so much.

[Dylan Tokar]

Thank you.

[Pierre Bienname]

President Trump's bid to abolish birthright citizenship reached the Supreme Court today. Justices held a special hearing on the administration's request to set aside three federal court orders blocking implementation of his decree. Our Supreme Court correspondent, Jess Bravin joins me now. Jess, what happened at this special hearing today?

[Jess Bravin]

This is a very long argument scheduled on a special day. The regular argument calendar ended in April, went more than two hours long, and the issue was, can federal judges issue injunctions that block a government policy across the board, across the entire country? And there have been dozens of those issued against the Trump administration. So the government came in today asking the court to say federal judges just can't do that. And that would mean in this case involving the specific issue, the president's executive order that essentially limits citizenship at birth, that order would go into effect in much of the country, but not all of it, because more than 20 Democratic led states would have injunctions applying to them. So that was the underlying issue. But the top line issue was really this question of injunctions.

[Pierre Bienname]

What would be the broader implications of this case?

[Jess Bravin]

The Justice Department wanted the Supreme Court to rule that those injunctions are improper and that in fact, they want a ruling saying that federal judges cannot issue injunctions that apply to non parties, to people who are not litigants in the lawsuit. And so that raises a question. What about a policy that affects thousands or hundreds of thousands or millions of people? And if courts all think it's illegal, does every one of those people who is harmed by the illegal policy have to file his or her own lawsuit to enjoin it? That's sort of the question here. I mean, Justice Sonia Sotomayor tried to turn the issue inside out. What if a future president decides to confiscate all the guns in the country and people go to court to say that's violating the Second Amendment? Does every single gun owner in the country have to file his or her own lawsuit? Or can a judge say, well, the Second Amendment provides the right to keep and bear arms, and so we're going to block the government from enforcing their illegal order. So in other words, if the court agrees with the Trump administration, this may not be the only provision of the Constitution that gets reinterpreted by either this president or a future one.

[Pierre Bienname]

Supreme Court correspondent Jess Braven and American negotiators for the first time pitched a nuclear proposal to their Iranian counterparts days before President Trump said that the US Was close to an agreement. That's according to people briefed on the matter. Speaking at a business event in Doha, Qatar, earlier today, Trump alluded to military strikes and said a deal would avoid that. One of the people said the Iranians said they would take the proposal back to Tehran for discussion. The US Wants Iran to roll back its program, which American officials think is within a few months of being able to produce a nuclear weapon. And that's what's news for this Thursday afternoon. Today's show was produced by Anthony Banci with supervising producer Michael Kosmides. I'm Pierre Bienname for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.