China has issued a warning to Walmart regarding its practices of pressuring suppliers to reduce prices in light of rising US tariffs on Chinese goods. This intervention highlights Beijing's concern over the economic impact of the US-China trade tensions, specifically addressing the repercussions on Chinese suppliers if they are pressured to absorb the tariff costs. A meeting held with Walmart executives signals the seriousness with which China is approaching the issue, suggesting future consequences if these practices continue.
“Beijing has essentially warned that it would take action against Walmart if Chinese suppliers are coerced to absorb the tariff impact,” wrote Vishnu Varathan, Mizuho's head of macro research for Asia excluding Japan.
“The authorities sought to discuss reports that Walmart had asked suppliers to cut wholesale prices to offset higher US tariffs,
“Such a move would create risks of supply chain disruption and may violate commercial contracts and disrupt the order of normal trading.”
“If Walmart insists on doing so, then what awaits Walmart is more than just a meeting.”
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