Liliputin- 5786

Eating the cost of tariffs turned out to be not a proverbial pie in the sky ... "
Carl Douglas McMillon

Liliputins. What, the heck, is this?
http://stihi.ru/2025/03/08/5867

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Unrealistic or unattainable hope or promise
The phrase "pie in the sky" refers to an unrealistic or unattainable hope or promise. It suggests something that seems wonderful but is unlikely to happen, often used to describe fanciful ideas or plans. The idiom originated from a song by Joe Hill in 1911, which highlighted the contrast between hopeful promises and the harsh realities of life.
Eaat" the cost of tariffs

Trump Wants Retailers To 'Eat' Cost Of Tariffs. Do They Have The Appetite?
By Diccon Hyatt Published May 27, 2025 05:41 PM EDT
An employee counts inventory in a Walmart Supercenter on May 15, 2025 in Austin, Texas.
Brandon Bell / Getty Images
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Key Takeaways
President Donald Trump has called on Walmart to "eat" the cost of tariffs instead of passing them on to customers.
Analysts said retailers like Walmart run on small profit margins, so it's unlikely that they will be able to avoid raising prices for long.
One economist said companies that "eat" tariff costs would have to reduce expansion, investment, and hiring to compensate.
Earlier this month, President Donald Trump told Walmart to "eat" the cost of the tariffs he is imposing on the foreign-made products the retailer sells.

Is it realistic to expect companies to pay the import taxes?

Economists and retail experts said it's unlikely that retailers can "eat" tariffs for long, especially those that sell many items brought in from abroad. Most retailers have relatively small profit margins, meaning they only keep a small portion of each dollar they collect. And if retailers were to bear the brunt of tariffs completely, economists said it could have other economic consequences.

In April, customs collected $15.2 billion in tariff revenue from companies that bought goods from other countries. Retailers can foot some of the tariff bill. UBS Wealth Management estimates that a 10% tariff equates to a 4% increase in retail prices for consumers. And some businesses have found workarounds to reduce their tariff costs.
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But while those tactics can reduce the amount companies have to pay, they still face higher costs, and analysts said it's likely they will pass at least some of them on to consumers.

Profit Margins Are Already Tight
Three major retailers, Walmart (WMT), Best Buy (BBY), and Macy's (M), will all find it nearly impossible to avoid raising prices, analysts at Seeking Alpha said in a commentary this week. Wal-Mart, like other retailers, operates at a small profit margin, giving it very little wiggle room, analyst Daniel Jones wrote.
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"The prospect of the company eating any significant portion of tariffs is absurd," he wrote. "Last year, Walmart generated a net profit margin of only 2.85%. This means that its ability to just absorb higher costs will be limited."

Companies Bearing the Full Brunt of Tariffs Could Cost Jobs
Companies "eating" the full cost of tariffs would have economic consequences beyond inflation, wrote Anthony Chan, former global chief economist at JP Morgan Chase.
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"Temporarily absorbing tariffs might win consumer goodwill, but once profitability plummets, companies would have no cushion to reinvest in store improvements, wages, or innovation," he wrote. "Retail jobs would be at risk, capital expenditure would decline, and dividend payments could be cut. None of this would be sustainable or supported by shareholders."

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Carl Douglas McMillon (born October 17, 1966[1]) is an American businessman who has been the president and chief executive officer (CEO) of Walmart since 2014.[2] He also sits on the retailer's board of directors. McMillon first joined the company as a summer associate in high school, and he previously led the company's Sam's Club division, from 2005 to 2009, and Walmart International, from 2009 to 2013