Walmart, Target, Home Depot CEOs Tell Trump Prices Will Rise — 'Shelves Will Be Empty' If Tariffs Persist

“Shelves will be empty,” was the blunt warning delivered by the CEOs of Walmart WMT, Target TGT, and Home Depot HD to U.S. President Donald Trump during a private Oval Office meeting in early April.

In response to mounting pressure from retailers and economic indicators, the U.S. and China reached an agreement on May 12, to reduce tariffs for a 90-day period. Under this deal, U.S. tariffs on Chinese goods will decrease from 145% to 30%, while China’s tariffs on American imports will drop from 125% to 10%. 

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This temporary reprieve aims to alleviate immediate economic strains and provides a window for further negotiations toward a comprehensive trade agreement.

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Tariff Tension Shakes Retailers And Rattles Wall Street

Trump’s sweeping tariff announcement on April 2, dubbed “Liberation Day,” slapped a 145% duty on Chinese goods to revive domestic manufacturing. 

However, the move triggered an immediate backlash from the retail and financial markets. The Dow Jones Industrial Average plunged more than 1,600 points that day, one of the worst market drops since 2020.

Speaking privately at a JPMorgan Chase JPM event later that week, Treasury Secretary Scott Bessent said, “Neither side thinks the status quo is sustainable,” referring to the escalating trade war with China according to a transcript obtained by the Associated Press, which also quoted him calling the China talks “a slog.” 

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Inside the Oval Office, the tone was even more urgent. According to sources cited by CBS News, the CEOs – Walmart's Doug McMillont, Target's Brian Cornell, and Ted Decker of Home Depot – emphasized that while prices were stable for now, that wouldn’t last.

“The big box CEOs flat out told him [Trump] the prices aren’t going up; they’re steady right now, but they will go up. And this wasn’t about food. But he was told that the shelves will be empty,” one administration official told Axios. 

The outlet also reported that, according to another official briefed on the meeting, the executives said supply disruptions could become visible within two weeks if the tariffs remained in place. 

Meanwhile, the broader U.S. economy was feeling the pressure. China’s factory activity contracted significantly in April, with the country’s official Purchasing Managers’ Index falling to 49.0. This signaled a slowdown in global manufacturing as U.S. orders declined, according to the official survey by the China Federation of Logistics and Purchasing, published on May 7 .

On the home front, the U.S. economy shrank by 0.3% in the first quarter—the first contraction in three years.

Amid this uncertainty, Trump made headlines again when he said he had “no intention” of firing Federal Reserve Chair Jerome Powell, easing concerns over central bank independence. The reassurance helped markets rebound temporarily.

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Companies were also reacting to prolonged trade tensions. In 2024, Skechers SKX  reported $1,218.2 million in sales from China—13.6% of its $8,969.4 million global revenue. The company, heavily reliant on Chinese imports, faced rising U.S. tariffs that drove up costs and disrupted operations. 

Skechers, alongside 75 other footwear companies including Nike and Adidas America, signed a letter dated 29 April from the Footwear Distributors and Retailers of America urging President Trump to exempt shoes from reciprocal tariffs. Skechers also withdrew its full-year outlook via an April 24 press release. 

Soon after, it announced a $63-per-share cash acquisition by 3G Capital—a 30% premium—citing global brand momentum.

In response to the escalating pressure, Trump unveiled a 90-day tariff pause on April 9 for most U.S. trade partners—excluding China. This shift helped the S&P 500 post its biggest one-day gain since 2008.

Still, market analysts urge caution. Sevens Report Research President Tom Essaye told MarketWatch on May 5 that tariff reprieve may be temporary and that higher trade barriers will continue to weigh on economic growth.

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