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The Dependence of Walmart Success from The International Trade

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Walmart is one of the largest companies in the world. They sell practically anything you may need daily and for the most part is open 24/7, except for Christmas. Without international trade Walmart would not be where it is today. Most of its trade comes from China. Walmart also announced early this year that it would raise its starting minimum wage to $11 an hour this year. This political move has made it very hard for anyone to keep up with them as of today. Walmart is found in 26 other countries besides the United States. Its 2,300 stores in 2013 in Mexico made it a great platform for regional integration for workers to migrate from a small town to a city.

An online article in Seeking Alpha written by Zoltan Ban states” Walmart is America’s largest importer by far, therefore, it is very reliant on trade relations with the rest of the world, but especially China” makes it very clear that without any type of international trade it would not be America’s largest importer of goods. The article details how reliant Walmart is in having great trade relations with China. In 2016 70-80% of its suppliers came from China” (Ban). In our textbook on page 133 it explains how Walmart and its incredible global expansion is helping international trade. We may not notice it but going into Walmart for just 1 thing is always an issue at least for myself. For example, I have gone to Walmart to buy my son diapers but end up buying some headphone that were on sale for only $20 and that one trip that would have just cost me $25(diapers) just turned into $45. Most of our electronic devices, yes even our brand name electronics are made in China for next to nothing and Walmart can undercut by buying in bulk and buying for all their 5,000 stores in the U.S.

The article “Walmart’s Shiny New $11 Minimum Wage Isn’t Really A Result of The Tax Law” by Maxwell Strachan talks about how because of a new tax law that was recently passed Walmart has increased their minimum wage up $11 an hour will be giving bonuses that range from $200-$1000(Strachan). Depending on which state you live starting wages can range from as low as $7.25 to up to $10.10. People argue that you can’t live on minimum wage, it’s not meant to be lived on just as a starting point where you can grow within a company and excel. Politics play major role in deciding who gets paid what. With the new tax law Walmart was able to give employees around $11 million dollars in between all their current employees. On page 158 of our book it states how political reasons can affect the free trade market. By Walmart increasing their minimum wage it can easily convince a person to work for Walmart rather than another big box store and can even have employees from another store leave for the better pay in some cases.

The article “Challenges Wal-Mart Faces In Mexico And China” By Team Trefis explains how the little growth of Walmart in 2013 wasn’t too good for the company but having nearly 2,300 stores in the country was important for them to work on improving the market. The article also states that because of Mexico’s poor economy its slow growth will take toll on Walmart. On the Brightside it has a potential to grow tremendously with due time. Creating jobs across border and countries is what regional integration is all about. Maybe not necessary moving from one country to another but leaving the small-town setting to live and work in the big city. Mexico is known for many small rural towns. The most known city is Mexico City. Having people from small towns move to cities for jobs helps create regional integration. Both satisfying the fulfillment of the job market and bringing some of that earned money back to a smaller economic market.

Our weekly and sometimes daily trip to our local Walmart has undeniable effect on international trade, political economy and regional integration. Next time you go to Walmart think about that one Made in China product and how the effect of purchasing it affects you and the local economy. Without great relations with other countries “Everyday Low Prices” would not be possible. Walmart serves many purpose’s that we don’t really think about, other than being cheaper than “That other store”. Walmart has shown how far selling very cheap can impact the world in a bigger scale operation.

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