Which companies can "eat" Trump's tariffs?
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Or throwing a bumping shindig.

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In which the theme of the program, broadly speaking, is pricing power.

From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. Tuesday today, May the 20th, good as always to have you along, everybody. We seem to have entered the, are you corporate America or are you not going to raise your prices as tariffs start to bite in this economy? You'll recall the other day Walmart said flat out on its earnings call that it is going to raise prices by the end of this month, thanks, the company said directly to President Trump's tariffs.

The president then, as you have heard, said on his social account and through his treasury secretary that Walmart ought to eat the cost of the tariffs. That's the president's word. Home Depot, though, on its call this morning, said it's not planning broad price hikes because, as it turns out, and as Marketplace's Evanna Peters reports, are you or are you not going to raise prices kind of hinges on what kind of business you are in.

At a time when consumers are bracing for higher prices, companies can give themselves an edge by promising to buck that trend. Terry Esper, a professor of logistics at The Ohio State University, says Home Depot is in a good position. I think they're able to weather this trade scenario maybe a bit differently than a company like a Walmart. And only partly because of the strong domestic supply chain Home Depot touted on its earnings call.

Esper says home improvement retailers deal in higher margin goods, things like garden supplies and certain construction materials. Some of the specialty products that typically have a bit more of a higher markup. Leaving a bit more room to absorb higher wholesale costs. Plus, Esper says these retailers aren't just catering to households. Home Depot also has a pretty big customer base that are contractors.

professionals who buy in high volumes and are less sensitive than DIYers to economic uncertainty. But companies that don't have all that going for them can pull other levers to keep a lid on prices, says Amal Shah, a retail consultant with Alex Partners. You know, they're all trying to find, you know, some sharing of the pain, so to speak.

Shaw says big box stores are asking wholesalers to eat some of the costs associated with tariffs so they don't have to pass as much on to customers. But Wendy Liebman, CEO of WSL Strategic Retail, says lots of companies just won't be able to pull it off. She was struck by Walmart's warning about tariff-driven price hikes. I mean, Walmart, of all the retailers in the world, does not like to take tariffs.

price increases or make these kinds of statements. Liebman says that the company isn't waiting to raise prices, tells us things are getting serious for retailers. I'm Savannah Peters for Marketplace. Wall Street midweek, a little bit of a slide. Today we will have the details when we do the numbers. ♪

Unless you're really into crypto, it is really easy to tune out most of the crypto news.

But something happened in the Senate last night that you might ought to be up to speed on. Something called the Genius Act, the Guiding and Establishing National Innovation for U.S. Stablecoins Act, in that cute way the Congress has of coming up with snappy acronyms. It moved a big step closer to becoming law. Among other things, it would let banks, regular, normal, everyday banks, issue a kind of cryptocurrency called stablecoins.

So from the marketplace desk of what exactly is a stablecoin and why should I care? Matt Levin has today's crypto primer. Unlike Bitcoin or Dogecoin or other cryptocurrencies whose values are extremely volatile, stablecoins are supposed to be stable.

One of them should equal $1 today, tomorrow and forever. Dante Disparte is chief strategy officer at Circle, which has issued $61 billion worth of a stable coin. The digital dollar that has supported activities around the world in the way that you and I would send emails to one another. Unlike good old fashioned greenbacks, stable coins move at the speed of the Internet. No time wasted for financial clearinghouses or cross-border transaction settlements.

Desparte says if the Genius Act becomes law, stablecoins will modernize our payment systems. Think Venmo, only with stablecoins.

But for now, they're mostly used for crypto trading. Speculators use stable coins to borrow and buy and sell more crypto, which is why Duke lecturing fellow Lee Reiners is worried about banks like, say, JPMorgan Chase or Bank of America getting in on the action.

For instance, stablecoin companies buy billions in U.S. Treasury bonds to back their coins.

Reiner's fear is a bank run scenario where if everyone panics and tries to redeem their stable coins for actual fiat currency, those companies will have to sell their bonds en masse. So the price of treasuries could potentially plummet the bigger the stable coin market gets, potentially driving up borrowing costs for the rest of us in the real economy. Stable coin enthusiasts say those risks are overblown and that the bill offers rules and regulations that don't exist right now.

Salah Hazel is at the industry trade group Blockchain Association. You want to make sure that the U.S. government and all their respective agencies can supervise them, can enforce against wrongdoing. The Senate bill, which received bipartisan support, must be reconciled with a similar bill making its way through the House before it can be sent to President Trump. I'm Matt Levin for Marketplace.

The other day, maybe a week, 10 days ago, nine-ish in the morning, downtown L.A., walking just a couple of blocks from Marketplace World Headquarters. It was gray and it was cold for L.A. anyway. All right. Early morning coffee interview. It's kind of what I need right now. I'm just saying. Good thing, then, that the people I was going to talk to sell coffee for a living. I am Amanda Jane Thomas, co-founder of Sip and Sonder, and we are at our downtown Los Angeles location at the Music Center.

Yeah, my name is Shanita Nicholas, and I am one of the co-founders of Sip and Sonder. Sip and Sonder was founded back in 2017. Today, it's one of the few black-owned coffee companies that distributes nationally. They've got a flagship store in Inglewood, not far from SoFi Stadium, one at Disneyland, and this one outside Disney Hall in downtown.

I just learned the other day, this is a true story, what the word Sonder means. So when this came up, I was like, Sip and Sonder, we've got to do this place. One of you tell us what Sonder means, please. Sure. So Sonder is...

uh, the realization that everyone around you is living a life that's as beautiful and complex as your own was the big, like, so what is this going to be called? And, uh, she knew that it was like, you know, there's this word Sonder that I came across, uh, years ago in the dictionary of obscure sorrows, which is, um, a dictionary that describes it. It is, it's really phenomenal. It really describes there's all these, um,

and sentiments that sometimes can be really difficult to put a word to or feeling to. And Sondra was one of those. And so when we saw that, it really just hit the nail on the head of what we wanted Sip and Sondra to really be about.

She needed to keep going with that, right? Why'd you put it in the title of your shop, of your business? Absolutely. I mean, that's the feeling we want people to have when they come into the space, that you can come in as yourself, you can come in with other people. However you're showing up that day, that understanding that you can be an individual amongst the collective. You guys are high-powered lawyers, and here you are running a coffee business.

How? Why? I think that's so interesting. Yeah, you know, so we met at the point, like,

10 plus, I don't even know how long ago, but at our first corporate law firm, kind of baby attorneys just starting out. And I think it was very clear for both of us immediately that that wasn't it. We would meet up with some of the other men and women at the firm and really have these conversations around what are our biggest dreams, our passions. We ended up going to different firms, remained in contact. We were friends. Yeah.

And one day coffee came up in conversation and it was like, are you still friends now that you've been in business for a while? You know, we're not, we're not friends anymore. We're like sisters now. We're sisters. Yeah. We've graduated to sister land. Why coffee? Where did that come from?

My background is in chemical engineering. Yeah, which I love, right? You're the official coffee person, right? You're the one who's certified. You're the one who does the sourcing and the tasting, right? I enjoy the coffee world. No, more part of it. I think that that has always been an area of looking at a product that is kind of global, that can be utilized in these different ways. What does it look like on the commodities floor when you're trading as well? Yeah.

And all of that shows up into what we do on the roastery side. And then as we broaden that, and I think what's so beautiful on our coming together is like, okay, how do we really see this connection between people that sonder and what does that live through coffee? People that sonder. I love that so much. I love that word.

You mentioned the roastery. This is a vertically integrated company, right? You got the roastery and you got the retail sales thing. Yeah. Intentional, necessary? Absolutely intentional. Absolutely intentional. You know, coffee, there's such a culture around coffee. Yeah. And it's such a beautiful culture. And really, when we set out to do Sip and Sondra, it was how are we involved in this entire ecosystem? We like to say from crop to cup.

The relationship building that happens on the ground with the farmers, with the producers, all the way to the end consumer. So it really is this full circular integrated supply chain that we've created. Did I read somewhere that you two chose coffee for the coffee, but you also chose it because it's really white?

And you wanted to be and prove yourselves and make a space for yourselves, to pick up on your word.

in a really white-dominated industry. I mean, Starbucks leadership is all white. I mean, I think coffee is actually very non-white globally. Yeah, but like, no, no, no, totally. Sorry, I meant the corporate side. The business of coffee in America is really white, right? I mean, you're right. Not the sourcing that you're doing all this stuff, but the business of coffee. Yeah, no, I think it's us approving ourselves. I think it's an industry and an area that is so connected to our people

and the diasporic connection. I think in the showing up, we have a chance really to start becoming bridges. And I think when we stand in this location in downtown LA, one of the reasons that we were really excited and being in this space was that it acts as a portal from our communities across communities. And that's what we wanted to do. Can we talk about this moment in this economy? And I don't know...

And don't care right now, actually, for the purposes of our conversation about tariffs and whether it's going to hit you or whatever. But you're two black women running a business in a time when what you were trying to stand for is under no small degree of assault. And I wonder, I guess most plainly, how you feel about that as you try to run your business. Yeah.

You know, I think that there's it, you know, for me, there's a certain level of doubling down in who we are. Things can be under assault, but who we are intrinsically can never really be under assault and that can never be taken. To your question, remaining steadfast in that we can continue to build a company. We can continue to do the work that we're doing. Will it be a little bit more challenging?

Will there be more folks that may be naysayers of what we're doing, feeling more empowered? I mean, absolutely. And I always tell them, people are like, you know, starting a business, like, how do I make sure I stay true to it? You have to have the conviction behind what you're doing because it makes it a lot easier when you know the inevitable, the waves that will come.

And right now, you know, the waves are what they are in X number of years. They'll be what they are. But that conviction as a baseline, really, it continues to inform, you know, the decisions we make every single day. What I hear you saying is that stuff is happening, but you're keeping your head down and you're doing your job.

That's what we're all doing, right? Like, we're waking up and we're living. With varying degrees of success, right? I mean, I don't know how you're doing it. Yeah, you know, I think that's the thing, you know. We have to be steadfast in what we believe in. There are all sorts of things that can happen in a day that we, you know, can't make our business on, honestly. Like, literally can't make our business on.

Humans are very fickle. Okay? We have a lot of personality. We have a lot of opinions, thoughts. And that's just in a vacuum, much less than when you have the world around you influencing that. Right? That is just like, that's just who we happen to be. There are going to be people that jive with what you're doing and others that won't. And that's okay. It might mean that some deals go down south or maybe some. That's just the cost of doing business. It reminds me of physics.

Says the chemical engineer. Oh, man. Oh, man. Like, pretend we're in a frictionless vacuum. Oh, yeah. A frictionless vacuum. Oh, my God. The humanities, the physics, and it's all the same concept, right? Oh, man. All right. So, look, before we go, because I know you guys have to run a business, do you guys have beans here? Can I buy some beans? We can get something going, yeah. Okay.

I finished those beans this morning, as it happens. Coming up... It's easier for consumers to disproportionately focus on immediate costs and savings. Consuming in a tariff economy. But first, let's do the numbers. ♪

Now, industrial is down about 114 points, a quarter percent, 42,677. The NASDAQ slipped 72 points, about four-tenths percent, 19,142. S&P 500 dropped 23 points, also four-tenths percent, 59 and 40. Savannah Peters was telling us about Home Depot and its pricing thing. Today, the home improvement retailer declined six-tenths percent on Wall Street. Competitor Lowe's fell 1.3 percent. Walmart, should you be curious, down about three-tenths of one percent.

Armour Sports is another company that thinks it has tariffs kind of figured out. The parent company of Wilson Sporting Goods said it is well-positioned to weather tariffs, partly because of its diverse global operations. Shares up today 19%. Continuing the theme, Dollar General stock added 4%. Today, the company said its emphasis on food and drinks make it less likely to be severely affected by tariffs. Bonds down. Yield on the 10-year T-note rose 4.48%. You're listening to Marketplace.

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This is Marketplace. I'm Kai Risdahl. Electricity consumption in this country is going up. A lot. Thanks in no small part to all those new data centers gobbling up all those electrons.

How to meet that rising demand is the million-dollar energy question, with mostly billion-dollar solutions, among them building new natural gas power plants, net gas being relatively cheap, relatively clean, and more consistent than wind or solar. But as Marketplace's Elizabeth Troval reports, there is, of course, a problem.

There is a bit of a scramble right now to get the supplies needed to keep the lights on as electricity demand goes up, says Ramteen Siyashansi with Carnegie Mellon. Take natural gas turbines. Which are in relatively short supply. So suppliers have fairly lengthy backlogs to be able to get those components to utilities and others who are building electricity infrastructure.

So why can't manufacturers just ramp up production of gas turbines? Sam Huntington is with S&P Global Commodity Insights. These are big industrial machines, right? So you need big, heavy foraging and casting components. You need refrigerators.

really skilled labor. Plus, it requires a lot of specialty materials. And manufacturers are hesitant to make a big investment in ramping up production when there could be an overcount of how much electricity data centers will need. There's just a ton of uncertainty about the sort of range of projections of how much load growth could we actually see. He says the wait for some natural gas turbines is four years.

And the limited supply of turbines, which are a critical component to a natural gas plant, can add challenges and delays to these energy projects, says Tom Mergen with Stanley Consultants. It is difficult to get equipment, and there's definitely a race to get your orders in now. He says projects will place turbine orders early on if they can. But there's some risk in that, right? You're going to be starting to order equipment before you've done the environmental due diligence.

And it's getting worse. It's not just the gas turbines for big power plants that are in high demand, he says. Now you've got the market kind of converging that the demand is for any type of technology and pretty much any size is in high demand. It's another headache for project managers who are also dealing with governmental red tape, while a bunch of natural gas plants are coming through the pipeline at the same time. I'm Elizabeth Provol for Marketplace.

There's the policy slice of the ever-present tariff story in this economy right now. Which country is going to be tariffed, at which rate, starting when, on which products, for how long, and who's going to get exemptions. And then there's the behavioral corollary, how manufacturers and importers and wholesalers and retailers are reacting to those higher costs.

Do not, however, leave consumers out of that equation. All of this is as chaotic and confusing for them as it is for any business out there. People trying to figure out whether they should stock up on things and prioritize big purchases before tariff pricing kicks in. Marketplace's Kristen Schwab got some advice on how to budget during these turbulent tariff times. All the talk about tariffs finally got into Dan Blanchard's head.

I have a one-year-old who goes through a lot of diapers, so personally I've stocked up on diapers. Blanchard is Senior Associate Director of Research at the Yale Center for Customer Insights. And he says his sudden rush to the store isn't based on insider knowledge about the diaper supply chain. It's based on emotion. The business world has a term for when consumers panic buy. They call it scarcity mindset.

All the tariff chatter and the idea that almost everything we consume will be affected by the taxes can be overwhelming, especially as we inch closer to higher prices at checkout. As a result, the government has to make sure that we don't have to pay more taxes.

As we said earlier on the show, Home Depot isn't planning on hiking prices because of tariffs. But Walmart is later this month. That signals to everyone else in the industry when they can start to also raise prices. Jason Miller, a professor of supply chain management at Michigan State, thinks we'll see other retailers follow Walmart in June, with even more joining in as we creep closer to the end of the 90-day tariff pause.

So if you were going to plan on replacing your car this year, don't wait till September. Go out and do it now. Other big ticket items to think about buying now are kitchen appliances, furniture, and especially, says Willie Shee, a professor of management practice at Harvard, electronics. If you have kids who are going to college now,

in the fall, okay, and you know that you're going to buy a new notebook computer for them, now might be a good time to do it. A lot of electronics and other complex goods are made in China. It's why Xi ordered a fancy telephoto lens he'd had his eye on for bird photography. You know, wandering albatrosses are incredible. I like penguins.

I like northern gamuts. Buying expensive stuff now, like camera parts, could help save money. For smaller items, it could be worth stocking up on specialty products, like French wine or Himalayan salt. But Blanchard at Yale says don't go overboard, buying more than you can reasonably store or use. And tariffs shouldn't tempt you into hastily making a large purchase that would normally take more deliberation. It's a good thing.

It's easier for consumers to disproportionately focus on immediate costs and savings. Instead of the long-term financial picture, if you spend more than you can pay off, credit card interest can cancel out any tariff savings. Plus, spending a lot early in the year can throw off your budget. By the end of the year, you might have accidentally spent more altogether.

And we have to talk about the elephant in the room, the potential for a recession. When the future is murky, Blanchard says it's risky to take on debt. Which can be harder to pull out of, especially in an economic situation where, you know, some people might not have jobs.

So, yeah, if you absolutely need a new car, then you need a new car. But don't be tempted to let the threat of tariffs justify a splashy purchase. It's better to wait and see what happens with the economy. I'm Kristen Schwab for Marketplace.

Speaking of what's going on in this economy, we do that around here every single day. And if you miss something on the air, well, we've got a podcast for you. Marketplace.org is where you can find it or, of course, the platform of your choice. Just follow us there.

This final note on the way out today, which is either this week's sign the apocalypse is upon us or the greatest thing ever, you decide. Saw this in Variety this morning, that as part of the Fox Sports coverage of the Indianapolis 500, Oscar Mayer is going to do a weenie 500. I am not making this up. Six Oscar Mayer wienermobiles racing each other around the Indianapolis Motor Speedway. Come on, you've got to watch, right?

Our digital and on-demand team includes Jordan Mangy, Dylan Mietenen, Janet Nguyen, Olga Oxman, Virginia K. Smith, and Tony Wagner. Francesca Levy is the executive director of digital and on-demand. I'm Kyle Rizzo. We will see you tomorrow, everybody. This is APM.

Personal finance isn't just about spreadsheets and investing. It's emotional. Talking to your partner about money, negotiating a raise. Even the smallest decisions, like splitting a bill, can bring up feelings of shame or anxiety. I'm Rima Kheys, host of This is Uncomfortable, a podcast from Marketplace about life and how money messes with it.

In this season, we get into topics like workplace drama, tough financial trade-offs, and the quiet tension that builds when love and finances collide. Listen to This Is Uncomfortable wherever you get your podcasts.