China summons Walmart over price cut request on local suppliers

Chinese authorities have summoned Walmart executives over reports it asked suppliers to bear rising costs incurred by increased US tariffs.

Several Chinese authorities, including the Ministry of Commerce, were said to have met with the US retailer to learn about its negotiations over price cuts with suppliers in China, according to local sources affiliated with state-run China Central Television.

Such demands risk fracturing the global supply chain and hurting the interests of both US and Chinese companies and of American consumers, sources said, while also hinting that Walmart could expect more actions from Beijing if it continues to do so.

The move marks Beijing's efforts to show strength as US President Donald Trump targets China with consecutive rounds of trade tariffs.

It was reported last week that Walmart asked some suppliers for major price reductions as a way to insulate American consumers from higher levies on Chinese goods.

Meanwhile, Trump's increased tariffs on all US steel and aluminum imports took effect yesterday, stepping up a campaign to reorder global trade in favor of the US.

Trump's action to bulk up protections for American steel and aluminum producers restores effective global tariffs of 25 percent on all imports of the metals and extends the duties to hundreds of downstream products made from the metals, from nuts and bolts to bulldozer blades and soda cans.

The European Commission said it would impose counter tariffs on EUR26 billion (HK$220 billion) worth of US goods from next month. China said it would take all necessary measures to safeguard its rights and interests, while Japan said the move could have a major impact on US-Japan economic ties.

Close US allies Canada, Britain and Australia also criticized the blanket tariffs, but Australia ruled out tit-for-tat duties.

The countries most affected by the tariffs are Canada, Brazil, Mexico and South Korea, which all have enjoyed some level of exemptions or quotas.

Bloomberg, Reuters