For Walmart’s China-Sourced Goods, The Tariff Expiring July 24 Was Never The Real Cost

US retailers are pulling orders out of China four to six weeks earlier than usual to secure Black Friday and Christmas stock ahead of an expected tariff increase later this summer, shipping executives told Reuters. Imports from China rose 35 percent in May, after 11 percent growth in April and a contraction in March, and shipping firms said May and June volumes ran higher than the usual July-to-September peak. Maersk said container space on the China-US route has tightened since mid-May. Drewry’s spot rate from Shanghai to New York reached $7,149 per 40-foot container on June 25, up 25 percent year over year, while the Shanghai to Los Angeles rate hit $5,750, up 54 percent.

The Expiring Tariff Isn’t The One That Sets China Costs

The rush is timed to a specific date. The 10 percent universal tariff the administration imposed in February, invoked under Section 122 after the Supreme Court struck down the earlier IEEPA tariffs, expires on July 24 unless Congress extends it, and the administration has moved to replace it rather than let tariff levels fall. In early June the US Trade Representative proposed Section 301 duties of 10 to 12.5 percent covering roughly 60 economies and nearly all US import value, with China in the higher tier, and a hearing on the proposal is set for July 7 ahead of the July 24 sunset.

For goods from China, that expiring 10 percent was never the main event. The older Section 301 tariffs on Chinese imports, which the courts left untouched, already stack on top of it, putting the effective duty on many Chinese consumer goods near or above 30 percent. The new forced-labor duty would add to those existing tariffs rather than replace them, so a seller who held a shipment to clear after July 24 and dodge the 10 percent surcharge could face the 12.5 percent duty instead and pay more, not less. The July 24 date is less about whether duties come off China goods than about what lands on top of a Section 301 wall that is not going anywhere. The legal picture adds uncertainty of its own, since the Court of International Trade ruled the Section 122 tariff unlawful in May but limited relief to the importers who sued, and the government has appealed, so collection continues for everyone else.

Walmart Already Runs This Playbook

The frontloading that shipping firms are now reporting across the sector is close to a standing description of how Walmart has operated for the past year. Walmart imports about a third of what it sells in the US, with China, Mexico, Canada, Vietnam and India its largest sourcing markets, chief financial officer John David Rainey told analysts in 2025. Then-chief executive Doug McMillon said China created the greatest cost pressure of any market, concentrated in categories like toys and electronics. Those are among the same China export categories driving the current shipping surge, alongside smartphones, kitchenware and festival goods.

Walmart’s response has been methodical and stated openly. Rainey has described speeding up imports, managing tariff costs item by item and category by category, and absorbing the increase in some places while passing it through in others. John Furner, then head of Walmart US and now chief executive of Walmart Inc., described using the retailer’s wider assortment to raise prices on some items and lower them on others, and adjusting merchandise orders to reduce the risk of markdowns. By its most recent quarter Walmart said it had roughly 7,200 rollbacks in place, more than 20 percent above the prior year, and Rainey told analysts the company plans to put any recovered tariff payments back into lower prices. The cost still shows up on the shelf. Walmart reported that general-merchandise inflation ran above 3 percent in its holiday quarter, up from 1.7 percent the quarter before, and tied the increase largely to tariffs.

The Same Tariff Lands Differently On 1P And 3P

Where the duty actually sits depends on how a brand sells to Walmart, and the difference is real. For first-party suppliers, the tariff is negotiated inside the cost of goods. When landed cost rises, it surfaces as a cost-increase request to a merchant, and how much the supplier recovers depends on Walmart’s posture of absorbing some increases, passing others through, and leaning on its wide assortment to balance the two. Walmart has also spent years diversifying its sourcing toward markets like India and Vietnam, which changes the competitive set a China-dependent 1P supplier is measured against.

For third-party Marketplace sellers who import from China, there is no merchant on the other side of the table. The seller owns the landed cost and sets the retail price against it, so a higher effective duty comes straight out of margin or straight onto the shelf price. The end of the $800 de minimis exemption for Chinese goods, ordered in 2025 and left in place after the Supreme Court ruling, sharpened this further, since every shipment from China now clears customs entry and carries duty regardless of value, removing a workaround that many smaller import-driven sellers had built their unit economics around.

The Freight Spike Is Not A Demand Signal

The reading to resist is that rising rates mean a strong holiday. Kyle Henderson, chief executive of container-tracking firm Vizion, told Reuters that US demand sits below its three-year average and is better called “normal-to-soft,” and that the higher costs reflect carriers managing capacity, including cancelled sailings, more than any surge in orders. He expects volumes to fall after July as landed inventory builds and the tariff environment structurally raises the cost of China-origin goods.

That structural cost is the part that outlasts the rush. The July 24 date swaps one surcharge for another, and for anything arriving before it the window is effectively closed given four-to-six-week transit times. The China tariff floor beneath the expiring surcharge will still be standing when the holiday stock lands. June import figures, due July 14, will show whether the frontloading held.

Winning With Walmart

Winning With Walmart is an independent platform for suppliers, sellers, solution providers, and industry experts.

Articles are developed by staff editors, contributing experts, and trusted partners.

Some are researched and drafted with the assistance of AI tools and are reviewed, fact-checked, and edited by Winning With Walmart editors before publication.

Editorial judgment, sourcing decisions, and final approval rest with the publication's human editors in every case.

We are committed to accuracy and fairness. If you believe this article contains an error, we welcome your feedback.