The U.S. Just Imposed Sweeping Tariffs on All Imports. Here's How Walmart Stock Might Be Affected.

The Trump administration announced widespread tariffs on April 2, saying it aimed to level the playing field for America in global trade. The new policies levy a 10% tariff on all imports, with higher “reciprocal” tariff rates applied to a list of “the countries with which the United States has the largest trade deficits.”

It’s a monumental shock to America’s economic status quo, and, at least in the short term, it has sent shockwaves through the global stock markets. The U.S. depends heavily on imports, so consumers could see higher prices as tariffs go into effect. Look no further than Walmart (WMT -4.77%). The leading U.S. retailer gets much of its goods from other countries.

Here’s how tariffs may affect Walmart stock, and what investors may want to do about it.

Walmart has massive tariff exposure

Walmart, the largest retailer in the United States, will feel direct consequences as these new tariff policies go into effect. According to the company, more than two-thirds of its U.S. product sales were on goods grown, produced, or assembled in America last year. Conversely, that implies that imported goods accounted for roughly a third of its U.S. sales.

According to reporting by Reuters, approximately 60% of Walmart’s imported goods come from China. India and Vietnam are also key suppliers for Walmart. All three countries face reciprocal tariff rates.

Data source: The U.S. White House as of April 2, 2025.

These countries specialize in some of the goods people frequent Walmart for, including clothing, shoes, and electronics. As these tariffs go into effect, and assuming they stay in effect, Walmart will likely have to raise its prices.

Why tariffs may not erode Walmart’s competitive advantages

It’s still unclear precisely how tariffs will affect Walmart’s business, but here are some things to consider.

First, Walmart could be better suited to manage tariffs than most retailers. It’s the retail industry’s cost leader because it’s the largest and has the most leverage when it sources goods. Almost every retailer in the United States sells a lot of imported goods, so if tariffs raise everyone’s costs, Walmart would still maintain its competitive edge of having the lowest prices, even if it means customers are still paying more.

Second, grocery shopping is Walmart’s core business. In 2024, the company sold $264 billion in groceries, approximately 60% of all U.S. Walmart store sales. Health and wellness products chipped in an additional $54.9 billion. Higher prices may force consumers to cut back, but shoppers will likely cut discretionary spending, not food, medicine, and toiletries. Target, for example, gets more of its sales from items people want but don’t necessarily need.

Should investors buy Walmart now?

The new tariff announcements are a rapidly evolving situation. Only time will tell which countries may negotiate lower rates, whether the U.S. sticks to these announced policies, or how people ultimately respond. Walmart’s competitive position should be fine over the long haul, but the business could slow if higher costs squeeze consumers to the point that they spend less overall at Walmart’s stores.

Analysts currently estimate that Walmart will grow earnings by an average of nearly 8% annually over the long term. However, estimates have drifted lower since February as the economic outlook worsens. Estimates could slide further as more information about the tariffs and their effects comes to light.

Investors are in a precarious position here. Walmart’s stock trades at a price-to-earnings ratio of 35 at this writing, about 25% above its decade average. I get that blue chip stocks like Walmart are safe spaces for investors during volatile markets, but the valuation is too expensive and puts buyers at risk.

Walmart will probably remain a world-class business and company, but the stock needs a sizable price decline to justify buying shares.