Bessent Speaks To Walmart CEO, Dismisses ‘Draconian’ Forecast On Tariffs

Treasury Secretary Scott Bessent dismissed Walmart CEO Doug McMillon’s “draconian” tariff warning on Sunday, stating the retail giant will absorb some costs and may pass other price increases on to consumers, following a direct conversation between the two.

Bessent shared the development on CNN’s “State of the Union” after McMillon announced last week that tariffs would lead to higher prices at Walmart, prompting President Donald Trump to warn against it.

“I did speak to Doug McMillon, who I have a very good relationship [with], yesterday, just to understand what he had to say,” Bessent told anchor Jake Tapper. “And understand that came from an earnings call. On an earnings call, because of SEC requirements, they have to give the most draconian case. So Walmart will be absorbing some of the tariffs. Some may get passed on to consumers.”

He added: “But the other thing that’s happening is that inflation is down. We had the first drop in inflation in four years under President Trump. The other thing that Doug mentioned to me is, for his consumers, for his buyers, the most important thing are gasoline prices. And this administration has gotten gasoline prices down. Service prices are down. So, overall, I would expect inflation to remain in line. But I don’t blame consumers for being skittish after what happened to them four years under [President Joe] Biden. We had the worst inflation in 40 years.”

Bessent: “Walmart will be absorbing some of the tariffs. Some may get passed on to consumers.” pic.twitter.com/QhpOfIMsim

— The Bulwark (@BulwarkOnline) May 18, 2025

McMillon shared his forecast for prices during an earnings call on Thursday, alluding to a breakthrough in negotiations in which the United States lowered tariffs on Chinese imports from 145% down to 30% for 90 days while trade discussions continue between the world’s two largest economies.

“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” McMillon said, adding later: “We’re positioned to manage the cost pressure from tariffs as well or better than anyone. But even at the reduced levels, the higher tariffs will result in higher prices.”

Trump responded Saturday in a post on Truth Social.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected,” Trump said. “Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”