Walmart's CEO said Thursday that tariffs on China have had the "biggest impact" on costs as he announced that the world's largest retailer will likely raise prices late this month as a result.

"All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact. The cost pressure from all the tariff-impacted markets started in late April and it accelerated in May," CEO Doug McMillon said on the company's earnings call.

"We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure, given the reality of narrow retail margins," he said. "In retail, managing inventory is always important."

McMillon said, "China, in particular, represents a lot of volume in certain categories, like electronics and toys."

As of 2024, approximately 60 percent of Walmart's imported goods came from China, a decrease from 80 percent in 2018, during the first round of tariffs on China, with India gaining some of the shortfall, according to Reuters. In 2024, Walmart accounted for 11.2 percent of total US imports from China, worth approximately $49 billion.

McMillon, who was among a group of CEOs of major retailers who met with President Donald Trump at the White House last month to discuss tariffs, told analysts on the call that he hoped the tariffs would be reduced further.

"We've been really focused on back-to-school receipts," McMillon said in response to a question at the end of the call. "You know, when you have an imported item, you pay the tariff at the time it comes through customs, and so the cost is higher.

"Even if the tariff rate comes down later, the cost has been elevated."

Walmart is the largest importer of container goods in the United States. In 2024, the Bentonville, Arkansas-based company imported approximately 870,000 containers.

While the United States and China reached a deal last weekend that lowered duties for imports on Chinese goods from 145 percent to 30 percent for 90 days, the number is still "too high", CFO John David Rainey said on the call.

"There are certain items, certain categories of merchandise that we're dependent upon to import from other countries, and the prices of those things are likely going to go up, and that's not good for consumers," he said.

"We're very pleased and appreciative of the progress that has been made by the administration to bring tariffs down ... but let me emphasize we still think that's too high," Rainey said.

"The level of tariffs that result from those discussions and the timing of when they ultimately become final may cause larger swings in our financial performance from one quarter to the next."

In an interview on CNBC Thursday, Rainey said: "We've not seen a period where you've had prices go up this high, this quickly. We're well equipped and experienced in dealing with elasticities or price increases that are going up 2 or 3 percent, but not 30 percent."

Rainey told The Associated Press that car seats made in China that currently sell for $350 at Walmart will likely cost customers an additional $100.