Walmart (WMT) shares plunged 5.01% in Friday's trading session, as investors reacted to China's announcement of retaliatory tariffs on US goods. The steep decline comes amid broader market turmoil following President Donald Trump's "Liberation Day" tariff policy and subsequent international trade tensions.

China's decision to impose a 34% import tariff on all U.S. goods is a direct response to Trump's new tariff structure, which includes higher rates for countries deemed as "worst trade offenders." This move has sent shockwaves through the retail sector, with Walmart and other major retailers facing potential significant increases in costs for imported goods.

The impact on Walmart is particularly severe due to its heavy reliance on Chinese imports. As one of the largest retailers in the United States, Walmart sources a substantial portion of its products from China, including electronics, apparel, and home goods. The new tariffs threaten to squeeze margins and potentially force price increases for consumers, a scenario that investors fear could harm Walmart's competitive position and profitability.

Analysts are concerned about the broader implications for the retail sector and the U.S. economy. With Walmart's vast supply chain and market influence, the company's struggles could ripple through the entire retail landscape. Other major retailers like Target and Home Depot also saw their stocks decline, indicating widespread investor concern about the sector's ability to navigate these new trade challenges.

As the situation continues to develop, investors will be closely watching for any signs of how Walmart plans to mitigate the impact of these tariffs, whether through negotiations with suppliers, adjusting its sourcing strategies, or potentially passing costs on to consumers. The company's response to this trade crisis could set the tone for the retail industry's approach to navigating the new tariff landscape.