Wall Street Breakfast
Big retailers ask China for help ahead of tariff announcement
Apr 2, 2025
Major retailers are pressuring Chinese suppliers to cut prices as fears of tariffs loom. In a significant move, LG Energy secures a deal to buy GM's stake in a Michigan battery joint venture for $2 billion. Meanwhile, Visa and American Express are vying to outmaneuver Apple in the credit card arena, posing a challenge to Mastercard. The environment is tense as big pharma stocks drop ahead of tariff announcements, with analysts warning about Tesla’s potential downturn following disappointing deliveries.
06:35
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Quick takeaways
- Walmart is pressing Chinese suppliers for up to 10% price cuts due to impending Trump tariffs, affecting profit margins and supplier relations.
- Visa's competitive $100 million offer to Apple for its co-branded credit card contract signals intensified rivalry among financial institutions in the credit card market.
Deep dives
Retailers Pressuring Suppliers Amid Tariff Challenges
Retailers, particularly Walmart, are applying significant pressure on their Chinese suppliers to lower prices in response to tariffs imposed by the Trump administration. Reports indicate that Walmart is demanding cost reductions of up to 10%, which has become challenging for Chinese manufacturers already operating on thin profit margins. Some suppliers are exploring alternative manufacturing locations, such as Cambodia and Vietnam, to remain profitable while maintaining their relationships with U.S. retailers. This situation has sparked criticism from Chinese state media regarding the fairness of Walmart's tactics, raising concerns about the potential negative impact on both U.S. and Chinese businesses.
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