The news: Chinese authorities summoned Walmart Inc. executives following reports that the retailer pressed suppliers for major price reductions to shield American consumers from the impact of higher US tariffs on Chinese goods, per Bloomberg.

• The Ministry of Commerce and other Chinese authorities met with Walmart to discuss its price negotiations, according to a post by Yuyuantantian, a Weibo account linked to state-run China Central Television (CCTV)
• The post warned that such demands could disrupt the global supply chain, harm both US and Chinese businesses, and raise prices for American consumers.

China’s high-profile, widely publicized dressing down of the retail giant shines a harsh spotlight on the widespread impact of the trade war. The retailer’s struggles to navigate the new terrain suggests that few, if any, merchants will escape the fallout, as rising costs ripple across the global supply chain.

Caught in the crosshairs: President Donald Trump’s steep tariffs on Chinese imports put Walmart in a difficult position of having to navigate rising US costs while protecting its expanding business in China.

• China is a small but fast-growing market for Walmart, with over 300 Walmart and Sam’s Club locations in the country.
• In its most recent quarter, Walmart had $5 billion in net sales in China, a 28% YoY increase, while its ecommerce business surged 34%, underscoring the region’s strategic importance.
• A CCTV-affiliated post claimed that 60% of Walmart’s products come from China and warned that Walmart’s hardline approach toward Chinese suppliers could push local consumers toward domestic alternatives.

As trade tensions escalate, Walmart faces growing risks in China, where supplier disputes and nationalist sentiment could erode its market position and strengthen local competition.

Our take: Even before its dispute with China, Walmart was bracing for uncertainty, warning that growth would decelerate in the months ahead. If the retailer struggles to keep prices low, it risks consumers pulling back even further on discretionary spending, which could slow growth even more.

Go further: Read our Live FAQ: The Impact of Trump’s Tariffs on Consumers, Businesses, and Trade.