Walmart (WMT) shares plunged 5.01% in Friday's trading session, as investors reacted to the announcement of new tariffs that could significantly impact the retail giant and the broader U.S. retail sector.

The sell-off came in response to President Donald Trump's "Liberation Day" announcement, which introduced a baseline tariff rate of 10% on imports from various countries, with higher rates targeting specific nations. China, a key manufacturing hub for many U.S. retailers, faces a steep 34% tariff, raising concerns about increased costs for companies like Walmart that heavily rely on Chinese imports.

The new tariffs are expected to put pressure on Walmart's supply chain and potentially lead to price hikes for consumers. Industry experts warn that the retail giant may soon face increased costs from its suppliers, which could force the company to choose between absorbing the additional expenses or passing them on to customers. This situation has raised concerns about potential price gouging and its impact on consumer purchasing power.

Walmart, known for its "everyday low prices" strategy, now faces a challenging balancing act. The company has previously pressured suppliers to absorb tariff-related costs, but with the new, higher rates, this approach may become increasingly difficult to maintain. As a result, Walmart may need to reevaluate its pricing strategies and supplier relationships to navigate the changing trade landscape.

The broader retail sector also felt the impact of the tariff news, with other major players like Target and Home Depot experiencing significant stock price declines. As companies across the industry grapple with the potential consequences of these new trade policies, investors will be closely watching how Walmart and its peers adapt to the evolving economic environment.