Walmart resumes sourcing from China

US retailer Walmart has resumed product sourcing from some Chinese suppliers, marking a shift in its procurement strategy amid rising inventory pressure and looming price hikes for consumers in the United States, according to Chinese suppliers.

Mu Longsheng, director of Pesitro Healthcare Products — a longtime Walmart supplier in Jiangsu province — said the US retailer informed the company on April 28 to prepare for raw material procurement.

The move signals a partial resumption of sourcing activities that has been paused due to increased US tariffs on Chinese goods.

"Two other US brands have also placed orders with us, though the volumes are still small," Mu said. "They are looking to meet immediate daily demand."

Mu said that retailers have agreed to cover additional tariff costs and that prices are being set based on previous orders.

"Many retailers in the United States are anxious about maintaining stock," he said. "Once their early 2025 shipments — arranged to beat tariff hikes — run out, consumers in the US will start feeling the shortage. Price increases are inevitable."

According to CBS News, executives from Walmart and another mega retailer, Target, have recently privately warned the US government that rising tariffs could severely disrupt supply chains and lead to empty shelves.

A report from the US Commerce Department on Wednesday showed US imports surged at a 41.3 percent annual rate in the first quarter, driven by a 50.9 percent increase in goods, as businesses rushed to front-load inventory ahead of potential tariff escalations. The Trump administration elevated tariffs in April, which stand at a 145 percent rate on many Chinese goods and a 10 percent rate on imports from most other countries.

Industry experts say the renewed orders reflect the limited availability of alternative sourcing outside China.

"US retailers are under pressure. It's not easy to find replacements for Chinese manufacturers in the short term," said Jason Yu, general manager of CTR Market Research.

Industry players in the US argue the real cost falls on US consumers and small businesses. The US Chamber of Commerce spoke out against the Trump administration's trade policy on Thursday, saying recently imposed tariffs could cause damage to many small businesses and that the government should take action to avoid a recession.

"We have heard from a historic number of small businesses who have made it clear: they need immediate relief from tariffs," said Suzanne P. Clark, the chamber's president and CEO.

"As each day goes by, small businesses are increasingly endangered by higher costs and interrupted supply chains that will cause irreparable harm," she wrote.

The chamber sent a letter asking the Trump administration to address the impacts of tariffs by granting "automatic exclusions" for any small business importer, establishing a process for companies to apply for an exclusion if the company can demonstrate that tariffs pose a risk to employment for US workers, and providing exclusions for all products that cannot be produced in the United States or are not readily available.

Clark said raising prices on affected products would only hurt families struggling to pay their bills and urged the administration to protect workers from potential job losses by allowing exemptions for companies who may be forced to lay off their employees.

wangzhuoqiong@chinadaily.com.cn