WSJ What’s News - U.S. Retail Giants Have Kept Prices Low. But How Long Can It Last?

Episode Date: April 29, 2025

P.M. Edition for April 29. In the face of rising tariffs, the country’s biggest retailers are trying everything to keep prices low. But WSJ reporter Shane Shifflett says they warn that higher prices may be difficult to avoid and that certain products could become scarce. And Amazon plays down a report that it was considering displaying the impact of tariffs during its online checkout process after President Trump called the company’s founder Jeff Bezos. Plus, BP once aimed to lead the shift to renewables. Energy reporter Matthew Dalton says it’s now doubling down on fossil fuel production in the U.S. Pierre Bienaimé hosts.Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Conditions apply to all benefits. Visit pcfinancial.ca for details. Amazon has ruled out displaying the impact of tariffs after criticism from the White House. Plus, retail giants in the U.S. have managed to keep prices under control. But they say that won't last. The full impact of those tariffs is yet to be seen. But it is something that will eventually appear in the prices that Americans pay for products on the store shelves of Walmart, Target or online in Amazon.

And the Chinese foreign ministry denounces the US's tariff policy in a fiery social media video. It's Tuesday, April 29th. I'm Pierre Bienemé for The Wall Street Journal, filling in for Alex Osola. This is the PM edition of What's News, the top headlines and business stories that moved the world today. Amazon was forced to play down a report that it was considering displaying the impact of tariffs during its online checkout process, after President Trump called the company's founder Jeff Bezos and the White House press secretary said such a move would be a hostile and political act.

The company said today it had considered displaying how much import charges would increase prices on its ultra-cheap shopping website, Hall. But it added that the idea was, quote, never approved and is not going to happen. Amazon also said it hadn't considered the idea for the main Amazon site, and no changes had been implemented on any Amazon properties. Amazon declined to comment on the phone call between Trump and Bezos. In the face of rising tariffs, retail giants in the U.S., including Amazon, have managed to keep prices from ballooning. For now.

But as the chief executives of Walmart, Target, and Home Depot told President Trump in a meeting last week, that can't last forever. According to people familiar with the matter, they warned Trump that higher prices would be difficult to avoid, and said certain products could become scarce if retailers decide not to sell them in order to avoid tariff costs. Wall Street Journal reporter Shane Shifflett joins me now with more. Shane, how are these big companies managing to keep prices down? Some retailers, most of them that we've looked at and who we've talked to, they have paused shipments coming from China and other countries.

They pulled some forward so that they're relying on some existing inventory so they don't have pause shipments coming from China and other countries. suppliers to keep prices low by shouldering the costs and absorbing the costs of tariffs, essentially. And how are those suppliers reacting to that? What's the relationship like? Suppliers are negotiating, but the retailers are in a position of power for the most part when it comes to these negotiations. Walmart is saying they're trying to work with their suppliers. It's not us versus them, but obviously those costs have to be made up somewhere. And Walmart's not going to absorb all of them, so they're not letting their prices increase. So those suppliers are going to have to eat the costs in some way. Amazon in particular works with a lot of independent merchants who sell goods through the site. What part are they playing?

Independent merchants make up a huge portion of Amazon sells. It's something like 60%. These are independent companies who sell on Amazon and use its site to reach consumers. So they're working inside Amazon's system, which is tracking how much they're changing their prices and how quickly they're changing prices. So when they try and increase their prices, some of them have tried to increase their prices by as much as 30%. Amazon will take steps to essentially deemphasize them. They'll also take steps to deemphasize them if they raise their price well above what can be found elsewhere online. So they're really playing by Amazon's rules for a lot of these smaller third-party sellers that are working on the site.

Of course, China is a powerhouse in manufacturing. So how are American companies dealing with that in particular? We've been tracking some 10,000 products since early January. A majority of those products that are on store shelves, they do come from China. companies dealing with that in particular? administration during the last round of tariffs. Some companies did diversify their supply chains and move to other countries. China is still a major player here, and those tariffs are definitely going to raise the prices of some products. We're already seeing it in some cases with certain types of electronics, chargers, Bluetooth speakers. The full impact of those tariffs is yet to be seen, but it is something that will

eventually appear in the prices that Americans pay for products on the store shelves of Walmart, Target, or online in Amazon. That was Wall Street Journal reporter Shane Schiflitt. Shane, thanks so much. Thank you. United Parcel Service says it's cutting 20,000 operational positions this year in a move to slash expenses after breaking ways with Amazon, its biggest customer. UPS has been looking to shrink its operations after deciding in January to reduce the number

of packages it delivers for Amazon. The e-commerce company accounted for about 12% of UPS's revenue. UPS has nearly 490,000 employees. Most of these are represented by the Teamsters. The union didn't respond to requests for comment. Executives at the delivery company said it's going to be less dependent on labor, which includes adding automation to its facilities for tasks including label application, as well as loading and unloading trailers.

Amazon launched 27 satellites into space last night, a small step in its goal to compete with SpaceX's Starlink and other fleets that provide internet access from above. Amazon executives have said the company plans to invest more than $10 billion in Project Kuiper. Micah Maidenburg covers the business of space for the Wall Street Journal, and he says Amazon needs to quickly manufacture and deploy thousands more satellites on a narrow timeline in order to compete. Amazon is trying to build a low Earth orbit satellite network. These are satellites that are relatively close to the globe.

You need thousands of them to provide coverage. But the advantage, if you get thousands of them up, is that you can offer higher speeds and lower latencies. More broadly, the company is looking for another big franchise to support all of the other ventures and businesses like the e-commerce side, Amazon Web Services, etc. that it already has. The clear market leader right now is SpaceX's Starlink network. More than 7,000 satellites are already up. It has millions of users around the world, most of them in the US, and a big and growing business among

corporate and company clients. Other governments and companies are building their own low-earth orbit networks including Canada-based Telesat. In Europe, governments and satellite companies are working on a new government-oriented system that would include a low-Earth orbit layer. And there's at least a couple of other Chinese LEO networks in the works as well. Coming up, BP pledges to boost U.S. fossil fuel production as it slashes its green energy investments. That's after the break. its green energy investments. That's after the break.

The all-new, all-electric Can-Am Pulse Motorcycle is your cheat code for the city. Light, agile and stylish for all you smart commuters. Find your pulse today. Learn more at CanAmMotorcycles.com BP said today it aims to boost its US production of oil and gas by more than 50% by the end of the decade Aligning itself with President Trump's mantra of drill baby drill The British company reported today a sharp drop in its first quarter underlying replacement cost profit, a metric similar to net income that US companies report. At $1.38 billion, the figure is just over half what BP reported in the same period last year.

Matthew Dalton covers energy for the Wall Street Journal, and he joins me now. Matthew, what's BP aiming to achieve here? Matthew Feeney Well, they have shifted away from a strategy of investing in a broad suite of different energy technologies from renewables such as wind and solar. They've really pivoted sharply towards just oil and gas, towards really getting out of the green energy business. They've said that they're going to direct most of their capital expenditure towards the traditional fossil fuels industries. And they're doing this because Wall Street investors

really haven't rewarded them for having this less focused approach that they're now pursuing. They say there are other companies that are going to be investing in green energy, but that's not going to be our focus. And indeed, they're looking to boost US production from 650,000 barrels a day to more than a million by the year 2030. How are they planning to do that? They're going to be shifting a lot of their capital expenditure to spending on those things

in the US. The US as a whole represents about 60% of BP's overall business. So it's a logical place for them to be investing. The CEO told me that they're going to be boosting production both onshore and in the Gulf of America, as he called it, taking President Trump's preferred term for the Gulf of Mexico. He said that the company was very much aligned with President Trump's call to drill baby drill and really boost oil and gas production. Of course, they're facing right now an environment in which crude oil and natural gas prices

have really slumped as a reaction to the Trump administration's tariff plans. Really throwing a lot of doubt on the global oil market because people think that these tariffs are going to really slow growth on a global scale. Matthew Dalton covers energy for The Wall Street Journal. Matthew, thanks so much. Thanks a lot. Stocks climbed today after U.S. Commerce Secretary Howard Lutnick told CNBC he's reached a trade deal with an unnamed country.

A deal on tariffs with even one nation could be seen by investors as much-needed progress. The Dow increased three-quarters of a percentage point, while the Nasdaq composite closed up about half a percent. The S&P 500 ended the day up about half a percent as well, but despite that, it recorded its biggest loss in the first 100 days of a new presidential term since Richard Nixon's in 1973. China signaled its resolve to stand up to President Trump's efforts to pressure Beijing into a settlement on trade, vowing in a social media video to resist U.S. coercion and urging other countries to also resist.

China won't kneel down because we know standing up for ourselves keeps the possibility of coercion and urging other countries to also resist. In a version narrated in Chinese and another in English, the Chinese Foreign Ministry denounced what it calls bullying tactics designed to shore up American hegemony. The video comes as President Trump has struck a softer tone on trade tensions with China in recent days, fueling some optimism that the two governments could start hashing out a potential deal. The video, however, suggests Beijing isn't prepared to blink first in the trade standoff. And that's what's news for this Tuesday afternoon. However, suggests Beijing isn't prepared to blink first in the trade standoff.

And that's what's news for this Tuesday afternoon. Today's show was produced by Anthony Bansi, with supervising producer Michael Kosmides. I'm Pierre Viannais for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.