Recently, a “resumption of shipments” notice from major US retailers has attracted widespread attention. According to a report by Hong Kong’s Ming Pao on April 26, several Chinese exporters revealed at the ongoing Canton Fair that major US retailers – including Walmart, Target and Home Depot – have notified them to “resume shipping goods” that had been temporarily halted due to the high tariffs imposed by the US on Chinese imports, with the tariff costs to be “paid by the American buyers.”
Walmart and other companies have not yet confirmed this information. However, earlier reports indicated that the CEOs of these three major US retail giants met with US President Donald Trump at the White House on April 21 local time to discuss the impact of tariff policies on their “import-heavy” businesses. Recently, Walmart China also announced the launch of a “green channel” to support eligible foreign trade enterprises. Both Chinese and US companies are actively working to maintain the normal operation of supply chains, which once again underscores that tariff barriers cannot override the rigid demand underpinning China-US economic and trade relations.
The specific scope and details of the retailers’ notice remain unclear. Last month, Walmart reportedly demanded price cuts from its Chinese suppliers under tariff pressure, prompting China’s Ministry of Commerce to summon Walmart for talk. The latest twist in this saga is significant, though not surprising. Multinational companies like Walmart owe their success to economic globalization, and reckless tariff policies pose a severe test to their product pricing and supply chain systems.
At the current tariff rate, a US-based company would have to pay at least $145 in tariff fees to Customs and Border Protection to import an item valued at $100 from China. This cost would wipe out any potential profit, forcing companies either to sell at a loss or to raise prices to a level unaffordable for consumers. US politicians may shout slogans about “decoupling,” but the daily needs of ordinary Americans won’t wait for political rhetoric to materialize.
According to exporters cited by Ming Pao, only some orders are currently resuming, while others have been canceled. Faced with high tariffs, US retailers like Walmart have only two options: cancel orders for Chinese products or pass the tariff costs onto US consumers. Walmart and others have lobbied the White House and persisted in working with Chinese suppliers – willing even to absorb the tariff costs themselves – because they simply cannot find adequate substitutes for goods “made in China” in the short term. High-quality, cost-effective Chinese products are critical to their survival, operations and profit margins. In short, Washington’s tariff stick is hitting the US public hard. And this turmoil is only just beginning.
As the world’s two largest economies, China and the US have reaped tremendous economic benefits from bilateral trade. The US imports a lot of consumer goods, intermediate goods and capital goods from China, supporting its manufacturing supply chains, expanding consumer choices, lowering living costs, and boosting the real purchasing power of American people, especially low- and middle-income groups. Even if imports are restricted, domestic demand for Chinese-made products in the US will not simply vanish.
According to a report released by the US-China Business Council in April, 2024, China is a key market for US exports of goods and services. In 2022, China was the largest export market for three US states, in the top three for 32 US states, and in the top five for 43 US states. US exports to China also created 931,000 American jobs in 2022. China-US trade relations are shaped by natural endowments and market demand – basic economic realities. The so-called reciprocal tariffs are nothing more than an expensive political performance that reality will eventually correct.
Facts have proven that beggar-thy-neighbor and de-globalization practices are not only harmful but also unsustainable. It is impossible for countries to retreat into self-sufficiency behind closed doors, and the idea of “excluding China” from global industrial chains is nothing but a fantasy.
Economic globalization is driven by the objective requirements of productivity growth and the inevitable result of technological advancement; it is the only path forward for human society and an irreversible trend of our times. Walmart’s “resumption of shipments” notice is something Washington should reflect on carefully. It is hoped that the US side will learn a lesson from this incident, promptly correct its misguided tariff policies, and return to the right path of engaging in dialogue with China based on equality, mutual respect, and reciprocity. GT
