Criticism of Walmart - Imports and Globalization

Imports and Globalization

As a large customer to most of its vendors, Walmart openly uses its bargaining power to bring lower prices to attract its customers. The company negotiates lower prices from vendors. For certain basic products, Walmart "has a clear policy" that prices go down from year to year. If a vendor does not keep prices competitive with other suppliers, they risk having their brand removed from Walmart's shelves in favor of a lower-priced competitor. Critics argue that this pressures vendors to shift manufacturing jobs to China and other nations, where the cost of labor is less expensive.

In the mid-1990s, Walmart had a "Buy American" campaign. Yet by 2005, about 60% of Walmart's merchandise was imported, compared to 6% in 1995. In 2004, Walmart spent $18 billion on Chinese products alone, and if it were an individual economy, the company would rank as China's eighth largest trading partner, ahead of Russia, Australia, and Canada. One group estimates that the growing US trade deficit with China, heavily influenced by Walmart imports, is estimated to have moved over 1.5 million jobs that might otherwise be in America to China between 1989 and 2003. According to the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), "Walmart is the single largest importer of foreign-produced goods in the United States", their biggest trading partner is China, and their trade with China alone constitutes approximately 10% of the total US trade deficit with China as of 2004.

While the company certainly imports many products, it points out that it purchases goods from more than 68,000 US vendors, spending $137.5 billion in 2004, and supporting more than 3.5 million supplier jobs in the US.