WalMart built their business on redundant supply chain and hyper efficient logistics. Their heavy handed negotiation tactics are legendary among manufacturers and suppliers. Plenty of people have gone broke selling to WalMart.
They have major leverage in retail. For example it was WalMart that forced Nestle, ConAg and all the other major food processors to change their date codes to a format that could be read by customers --- "Best before 11/4/2024". WalMart did this to bankrupt smaller grocery chains and put pressure on larger ones. The strategy being that WalMart has the best logistics in retail and can move product before it hits those dates much better than anyone else can. Groceries are VERY low margin business and they all have to loss leader milk, bananas, eggs and other staples. WalMart gets sales in other departments from those who make frequent visit to buy groceries so they can loss leader groceries deeper and longer than grocery+pharm-only competitors and they have done so in markets where they want to push competitors out.
A rule in business is "Have at least two sources for everything which is critical to your business." So for WalMart that means having duplicate sources in India, Vietnam, Haiti, etc for almost everything they get from Chinese suppliers.
Lastly, a 20% tariff on the wholesale price does not equal a 20% increase in the retail price. If we look at Alibaba, we see, for example, a black leather belt with a metal buckle similar to one sold at WalMart and the cost is $1.10 FOB China. Other belts are $.067 to $0.85 each and that is more in line with what WalMart would pay due to the volume. That belt sells for $9.97 in a US WalMart store but the tariff of 20% is applied to $0.67 raising WalMart's cost by only 13-cents.
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