(NewsNation) — Walmart, the world’s largest retailer, continues to source a significant share of its products from China, although the reliance is gradually decreasing.
According to a November 2023 Reuters report, about 60% of Walmart’s imports came from China between January and April 2023, down from 80% in 2018.
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Walmart aims to diversify its supply chain
While Walmart still depends heavily on Chinese manufacturing, it has taken steps to diversify its supply chain.
India has emerged as a key focus. In 2018, Walmart acquired a 77% stake in Indian e-commerce from Flipkart, Reuters reported, marking the beginning of growth in the region.
Between January and August 2023, 25% of Walmart’s U.S. imports originated from India, up dramatically from just 2% in 2018, according to Import Yeti data shared with Reuters. In contrast, China accounted for 60% of imports during the same period.
Walmart began its sourcing operations in Bangalore in 2002, according to Reuters.
In 2021, the company committed to sourcing $350 billion in U.S.-made goods by 2031.
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Walmart to raise prices amid tariff pressure
Tariffs are also shifting the competitive landscape. Starting in July, Indian textile and apparel exports will face a 26% U.S. tariff, lower than rates imposed on Bangladesh (37%), Vietnam (46%), and China (145%). This makes India more attractive as a sourcing hub.
On Thursday, the retail giant announced plans to increase prices as early as next month in an effort to pass along costs associated with Trump’s sweeping tariff agenda.
The retail giant did not release a profit outlook for the first quarter of the year due to the uncertainty surrounding the economy, as experts have warned for months about negative impacts on U.S. consumers.
Walmart on Thursday shared that its profits slipped in the first quarter of the year, to $4.45 billion or 56 cents per share, from $5.10 billion or 63 cents per share, The Associated Press reported.
The news comes after the administration reversed course, lowering tariffs on Chinese imports from 145 percent to 30 percent for 90 days. China, in response, lowered retaliatory tariffs from 125 percent to 10 percent.
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Walmart reportedly asked several Chinese apparel and kitchenware suppliers to cut prices by up to 10% per tariff round, Bloomberg reported in March.
Walmart has historically had strong negotiating leverage, and such requests are typically honored, the outlet reported. However, the scale of these recent demands has raised concern among Chinese manufacturers.
According to The Wall Street Journal, Chinese officials summoned Walmart executives following complaints from suppliers. Authorities criticized the retailer’s demands as unfair, warning that forcing suppliers to absorb tariff costs could breach contracts and disrupt market stability. Legal consequences were reportedly mentioned during the discussions.
