Treasury Secretary Scott Bessent admitted on Sunday that Walmart, the biggest US retail company, might transfer certain expenses resulting from President Donald Trump’s tariffs to its customers in the form of increased prices.

Bessent described his call with the company’s CEO a day after Trump warned Walmart to avoid raising prices from the tariffs at all and vowed to keep a close watch on what it does.

As doubts persist about Trump’s economic leadership, Bessent pushed back against inflation concerns, praised the uncertainty caused by Trump as a negotiating tactic for trade talks and dismissed the downgrade Friday of US government debt by Moody’s Ratings.

Yet Walmart does not appear prepared to “eat the tariffs” in full, as Trump has insisted the company and China would do.

Bessent said he spoke Saturday with Walmart CEO Doug McMillon, stressing in two news show interviews that what he thought really mattered for Walmart customers was the decline in gasoline prices.

Gas is averaging roughly $3.18 a gallon, down from a year ago but also higher over the past week, according to AAA.

“Walmart will be absorbing some of the tariffs, some may get passed on to consumers,” Bessent said on CNN. “Overall, I would expect inflation to remain in line. But I don’t blame consumers for being skittish after what happened to them for years under Biden,” a reference to inflation hitting a four-decade high in June 2022 under then President Joe Biden as the recovery from the pandemic, government spending and the Russian invasion of Ukraine pushed up costs.

Walmart did not comment on Bessent’s description of his conversation with McMillon.

In a social media post on Saturday morning, Trump said Walmart should not charge its customers more money to offset the new tariff costs. “I’ll be watching, and so will your customers!!!” he posted.

Bessent said Walmart on its earnings call on Thursday had been obligated under federal regulations “to give the worst-case scenario so that they’re not sued,” suggesting in an NBC interview that the price increases would not be severe in his view.

But Walmart executives said last week that higher prices began to appear on their shelves in late April and accelerated this month.

“We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” Chief Financial Officer John David Rainey told The Associated Press on Thursday.

Bessent maintained that the ratings downgrade was a “lagging indicator” as the financial markets had already priced in the costs of a total federal debt of roughly $36 trillion.

Still, the tax plan being pushed by Trump would add more roughly $3.3 trillion to deficits over the next decade, including a $600 billion increase in 2027 alone, according to the Committee for a Responsible Federal Budget.

The treasury secretary maintained that deficits would not be a problem because the economy would grow faster than the debt accumulation, reducing its increase as a size of the overall economy.

Most independent analyses are skeptical of the administration’s claims that it can achieve 3% average growth as Trump’s 2018 tax cuts failed to do so.

Those tax cuts from Trump’s first term did boost economic growth before the pandemic, but they also raised the budget deficit relative to previous estimates by the Congressional Budget Office.

On tariffs, the Trump administration is still trying to determine rates with roughly 40 major trading partners before a July deadline.

It’s also in the early stages of a 90-day negotiation with China, after agreed a week ago to reset tariffs on that country from 145% to 30% so that talks can proceed.

Bessent said any worries about tariffs by small business owners most likely reflected the higher rate previously being charged on China. Still, the uncertainty has been a major drag for consumers and businesses trying to make spending plans in the weeks, months and years ahead.

“Strategic uncertainty is a negotiating tactic,” Bessent said. “So if we were to give too much certainty to the other countries, then they would play us in the negotiations.”

Bessent appeared on NBC’s “Meet the Press” and CNN’s “State of the Union.”