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President Donald Trump has taken the extraordinary step of asking Walmart, the world’s largest retailer and its largest private-sector employer, to reject free-market principles and, in his words, “EAT THE TARIFFS.” These are, of course, the tariffs that Trump has unilaterally imposed and that are causing companies throughout the United States, including Walmart, to raise prices.
In a free-market economy, which this country used to have, a provider of goods and services has the right to charge what it wants to charge. Consumers then have the right to buy or not buy.
In seeking to bully Bentonville-based Walmart, the president cited the billions of dollars the company made last year. Walmart is, in fact, a highly successful company, as the phenomenal growth of northwest Arkansas attests. But its profit margin was less than 3%, and absorbing the tariffs would likely cause real financial pain to the company.
How might that financial pain manifest? Walmart’s shareholders, which include large institutional investors that invest on behalf of millions of Americans, would suffer. And declining company revenue has been known to cause layoffs.
The suggestion to eat the tariffs is not only a recipe for economic indigestion, but sounds suspiciously like a communist-inspired command economy.
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