In the intricate and high-stakes game of global trade, America’s most prominent retail chains find themselves in a precarious position, akin to walking a tightrope. These retail giants are attempting to mitigate the financial repercussions of tariffs by raising prices for consumers, all while navigating the delicate balance of not alienating their customer base or incurring the wrath of former President Donald Trump. This balancing act is fraught with challenges, as companies grapple with the complex task of communicating the impacts of tariffs to their stakeholders without triggering adverse reactions from the administration or the public.

Walmart, Target, and Home Depot serve as prime examples of how corporations are struggling to navigate this treacherous terrain. These companies are acutely aware that the trade levies imposed by the Trump administration will inflate their costs. However, Corporate America must now master a new language—one that delicately informs shareholders and customers about the effects of tariffs while avoiding the ire of Trump on social media or the threat of punitive actions from his administration.

The three big-box retailers are all bracing for the impact of the global trade war. A significant portion of their merchandise is sourced from overseas, with approximately 40% of Walmart’s products being imported, and roughly half of Target’s and Home Depot’s offerings originating from abroad. As a result, these chains are likely to resort to various strategies to manage the tariffs, including changing suppliers, absorbing higher costs, raising prices, or even cutting certain products from their inventory.

Despite employing similar tactics to minimize the impact of tariffs, each company has communicated about the issue in distinct ways during their recent quarterly earnings calls. Walmart, which reported earnings first, was particularly vocal about the trade war’s impact, stating that higher tariffs would inevitably lead to higher consumer prices. This candid admission elicited a strong reaction from Trump, who suggested that Walmart should “eat” the cost rather than passing it on to consumers.

In contrast, Home Depot and Target chose a more cautious approach during their earnings calls, tiptoeing around the subject of price hikes due to tariffs. This divergence in communication strategies underscores the fact that some companies are more willing than others to speak out and risk potential backlash from the administration. Retail analysts, such as Michael Baker from D.A. Davidson, have noted that companies are acutely aware that their statements will be scrutinized and reacted to by the administration. Walmart, given its size and importance to the US consumer, may possess slightly more leverage and credibility to adopt a more assertive stance. Other companies, however, may prefer to maintain a lower profile to avoid drawing unnecessary attention.

Price decisions are highly sensitive in nature, and missteps can severely damage a company’s reputation with consumers or even jeopardize its business. The challenge is compounded by the constant fluctuations in tariff rates, which make it difficult for companies to make informed pricing decisions. The White House has been particularly vigilant in monitoring these decisions, with Trump himself taking aim at companies that he perceives as unfairly passing on tariff costs to consumers.

For instance, last month, Trump targeted Amazon after a report suggested that the e-commerce giant was considering displaying the added costs of tariffs on some items. This led to an angry phone call from Trump to Amazon founder and Trump donor Jeff Bezos. Similarly, Trump threatened toy manufacturer Mattel with a 100% tariff after its CEO warned that tariffs would increase toy prices in the US. Trump’s message was clear: companies should absorb the costs of tariffs rather than passing them on to consumers.

When Walmart recently acknowledged that tariffs would result in higher prices for consumers, it was well aware of the potential backlash. Walmart CEO Doug McMillon emphasized during an earnings call that while the company would strive to keep prices as low as possible, the magnitude of the tariffs made it impossible to absorb all the pressure given the narrow margins in the retail industry. McMillon also acknowledged the Trump administration’s efforts to reduce tariff levels on China from 145% to 30%, but he maintained that higher tariffs would still lead to higher prices.

A source familiar with Walmart’s decision, speaking under the condition of anonymity, revealed that the company had anticipated Trump’s reaction to its executives’ comments. However, Walmart felt a fiduciary obligation to its investors to explain how tariffs would affect its business. Additionally, the company wanted to ensure that customers did not perceive it as profiteering from the tariffs. McMillon, who has cultivated a cordial relationship with Trump through meetings at Mar-a-Lago and mutual acquaintances, has been candid with the president about the disruptive impact of tariffs on the supply chain. Despite these efforts, Trump criticized Walmart publicly, urging it to stop blaming tariffs for price increases and to “eat the tariffs” instead.

Walmart’s challenge is compounded by its brand image, which is centered around offering “everyday low prices.” According to Scott Bisang, a partner at Collected Strategies, it is more difficult for Walmart to absorb tariff costs without damaging its brand reputation compared to other companies. Home Depot and Target, whose brands are not solely focused on having the lowest prices, chose a different approach. They both downplayed the impact of tariffs on their prices, with Home Depot stating that there would be no broad-based price increases and Target describing price hikes as a “last resort.”

Home Depot executive Billy Bastek emphasized during an earnings call that while some items might be affected by tariffs, the company did not foresee widespread price increases. Instead, Home Depot views tariffs as an opportunity to gain market share by keeping prices stable. Target CEO Brian Cornell also acknowledged the potential costs associated with tariffs but highlighted the company’s strategy to mitigate these impacts through diversifying suppliers, adjusting products, and raising prices only if absolutely necessary. Cornell emphasized that Target’s competitive edge lies in leveraging its capabilities, long-standing relationships, and scale to remain price-competitive.

Business advisers are now encouraging companies to adopt a more nuanced approach when discussing pricing decisions. Rather than attributing price increases solely to tariffs, companies are advised to discuss a range of factors influencing their pricing strategies. Additionally, advisers recommend a “portfolio approach,” where companies raise prices on some items while lowering them on others to offset the impact of tariffs. This strategy allows companies to maintain customer loyalty by offering low prices on certain items while still accommodating necessary price increases elsewhere.

As individual companies navigate the front lines of the trade war, some are questioning the silence of lobbying groups that represent their interests. The lack of a unified business response to the administration’s tariff policies hampers companies’ ability to push back effectively. Jeffrey Sonnenfeld and Steven Tian from the Yale Chief Executive Leadership Institute recently called for business lobbying groups to play a more significant role in catalyzing collective action. They argued that Trump’s reliance on a divide-and-conquer approach to pit rivals against one another can be countered by a united front from the business community. In a Time opinion piece, Sonnenfeld and Tian emphasized that when business groups remain passive in the face of individual CEOs being attacked, they inadvertently cede the moral and strategic high ground to Trump’s impulsive decisions, leaving business leaders vulnerable and isolated.

America’s retail giants are engaged in a high-wire act as they attempt to navigate the complex landscape of tariffs and trade wars. The challenge lies in balancing the need to protect their financial interests with the imperative to maintain customer loyalty and avoid political backlash. As companies grapple with these competing demands, the importance of strategic communication, careful price management, and collective action cannot be overstated. The outcome of this delicate balancing act will not only determine the financial health of these retail giants but also shape the broader economic landscape in the era of global trade tensions.