Treasury Secretary Steven Mnuchin told lawmakers he spoke to the Chief Financial Officer of Walmart about how additional tariffs could affect the price of consumer goods.
Mnuchin testified before the House Financial Services Committee on Wednesday.
Rep. Ben McAdams pressed (D-UT) Mnuchin about how the next round of tariffs on approximately $300 billion worth of Chinese imports would impact American consumers.
“What do I tell mothers and fathers in my district when the price of their baby formula and diapers goes up? What if they can’t afford those price increases? Should they just go without buying diapers or not buy a carseat for their kid? What do I tell them?” asked McAdams.
Mnuchin noted the tariffs are proposed — and are not currently in place. He said the administration is working on an exception process and monitoring the impact on U.S. consumers carefully.
“People are alarmed,” said McAdams.
“I was on the phone with the CFO of Walmart — which is obviously one of the biggest sellers of the items that you’ve described — to specifically understand from Walmart what things they can source from other areas and what items they can’t. I would say we haven’t made any decisions yet, but we will be especially sensitive to the consumer items. Within the consumer items, I assure you, items that particularly affect people on fixed salaries,” said Mnuchin.
On its first-quarter conference call last week, Walmart (WMT) said proposed tariffs would result in higher prices for shoppers. “We are going to continue to do everything we can to keep prices low. However, increased tariffs will lead to increased prices for our customers,” CFO Brett Biggs said.
‘Being paid for by China’
Mnuchin said he’s not seeing price increases at this point.
“Given the depreciation of the Chinese currency, a big component of this is being paid for by China, because as the currency depreciates, our companies are able to buy things at lower prices,” Mnuchin said.
Rep. Cindy Axne (D-IA) also grilled Mnuchin about whether American consumers will bear the brunt of additional tariffs.
Mnuchin added he speaks to the Walmart CFO on a regular basis and has talked to “all the major companies that provide consumer goods.”
“Most of those companies are moving their products to other places,” Mnuchin told Axne.
Mnuchin said he doesn’t expect a decision on the next round of tariffs will be made in the next 30-45 days, and the administration will have an exclusion process built and ready if President Trump decides to move forward with the tariffs.
“There may be in certain cases an impact passed on to our consumer and we’re closely monitoring that,” said Mnuchin. “I don’t expect there will be significant cost on the American families. That’s something that we’re absolutely focused on.”
A Walmart spokesperson told Yahoo Finance the company does not reveal details about private conversations.
The spokesperson added it's not uncommon for the company to have conversations with officials — in the Trump administration or in prior administrations — since the Walmart is often seen as a bellwether of the US economy.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.