Do Companies Have Any Choice But to Raise Prices Amid Tariffs?

On Saturday, President Trump criticized Walmart for attributing upcoming price hikes to tariffs, prompting many economists to recall similar presidential complaints about companies raising prices.

Just last year, President Joseph R. Biden Jr. blamed "corporate greed" for rising costs in gas, food, and rent, while deflecting criticism that his administration’s policies had contributed to inflation.

Economists tend to be equally skeptical of such claims regardless of whether they come from Republican or Democratic leaders.

Michael Strain, an economist at a conservative think tank, explained that when presidents make policy decisions that raise consumer prices, they often shift blame onto businesses rather than acknowledging the policy’s impact.

Regarding the tariffs imposed by the Trump administration—currently at 30 percent on Chinese imports and set to last until mid-August—the economic consequences will ripple through the market, either increasing consumer prices or reducing company profits if businesses choose to absorb some costs. These dynamics could fuel inflation, dampen economic growth, and lead to higher unemployment.

While mainstream economists largely agree that companies must raise prices when faced with higher input costs, this perspective is not universally accepted outside the field.