Prices will rise, Bessent says, as tariff pressure grows
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Prices on groceries at a Houston Walmart in May 2025. Photo: Ronaldo Schemidt / AFP via Getty Images
Some consumer prices will likely rise due to tariffs, Treasury Secretary Scott Bessent acknowledged on Sunday, even after the White House publicly warned retailers against it.
Why it matters: A week after the president's economic team insisted tariffs would not increase consumer prices, there's a different message: They will, but inflation's in check and other costs are coming down.
The big picture: Consumers' expectations for inflation are through the roof, and retailers are starting to make clear there's nothing they can do to hold prices down in the face of historic tariff rates.
- As public opinion of President Trump's economic performance sinks, his team is trying to balance what consumers see at stores with what officials argue are offsetting benefits, like lower gas and grocery prices.
- They are also fighting the same "vibes" problem the Biden administration had — inflation's getting better, but everyone's feeling worse about it.
Driving the news: Earlier this week, Walmart, the country's largest retailer, said it could no longer hold the line and would have to raise prices on some products in the coming weeks.
- On Saturday, Trump warned Walmart against it, demanding in a Truth Social post that the company "eat the tariffs."
- That followed a furious reaction from the White House in late April, after a report Amazon might show customers the impact of tariffs on some prices (which the company later denied).
What they're saying: Bessent, in Sunday show interviews, acknowledged what was coming.
- "Walmart will be absorbing some of the tariffs, some may get passed on to consumers," he told CNN's "State of the Union."
Yes, but: Bessent said he spoke to Walmart CEO Doug McMillon on Saturday and came away with the view that the company's customers were benefitting economically, more than anything else, as a result of lower gas prices.
- "So, overall, I would expect inflation to remain in line," he said.
- He later described the falling gas prices to NBC's "Meet the Press" as "a direct tax cut for consumers."
- The national average retail price for regular grades of gasoline is about 12% lower today than it was a year ago, per AAA.
The intrigue: Republicans are starting to speak out more forcefully about the impact of tariffs.
- Sen. John Curtis (R-Ut.) told CNN he was concerned about the impact of tariffs on small businesses in particular.
- Sen. Rand Paul (R-Ky.) told ABC's "This Week" on Sunday "there will be higher prices" as a result of tariffs, and he criticized the argument that trade deficits were in and of themselves problematic.
What to watch: Walmart said prices should start to rise in the next couple of weeks — and other retailers may follow soon behind them.
Avery Lotz contributed.
