The active implementation of tariffs by former President Donald Trump is causing nationwide repercussions, with the effects felt not only by individual consumers but also by large corporations. Due to added costs from these tariffs, several brands may make the decision to bump up their product and service prices. We provide an overview of some corporations that might resort to price hikes in response to these tariffs.
Retail giant Walmart disclosed in early May that they would be compelled to escalate their prices as a response to the tariffs introduced by Trump, despite solid quarterly sales. The pressure from these tariffs is staggering such that even with the trade agreement with China in place, Walmart finds it challenging to counteract all of it due to the slim margins prevalent in the retail industry.
For instance, the cost of bananas, imported chiefly from Costa Rica, saw a rise from 50 cents per pound to 54 cents. Moreover, car seats manufactured in China that currently retail for $350 at Walmart are predicted to have an additional $100 tacked onto their price. It is estimated that these elevated prices could come into effect as early as the tail end of May.
Toy-maker Mattel signaled its intention to elevate prices for a portion of its toys sold in the American market to balance the burgeoning costs attributed to Trump’s tariffs. However, the company expects that between 40% to 50% of its toys will retain a price point of $20 or less. Although there are indications that customer spending may be impacted, the long-term implications on U.S. sales for the rest of the year remain unclear.
China is a significant contributor to Mattel’s global production, constituting around 40% of it. Large electronic retailer, Best Buy, cautioned that vendors spanning their entire assortment will be passing on a part of the tariffs costs to retailers, hence making it quite probable for American consumers to see an increase in prices. On the other hand, some electronic components and gadgets are temporarily excused from the tariffs. However, this grace period isn’t poised to be a permanent state.
Video game company Nintendo chose to postpone the pre-order period for its new Switch 2 video game console, spurred by tariff concerns. Fashion powerhouse Ralph Lauren has confirmed that it will hike its prices beyond what was initially planned as a countermeasure to the tariffs. Although some price bumps were anticipated for the autumn season, these increases are now believed to be of a larger scale for fall and the ensuing spring.
CEO of Volvo Cars hinted that a sizable portion of cost increments related to tariffs would have to be absorbed by the company’s clients. Auto manufacturers such as Subaru and Ford are also implementing higher sticker prices on numerous vehicle models, with Ford specifically targeting three models produced in Mexico. This modification is a regular mid-year pricing action, paired with some tariff faced.
Sportswear brands including Nike and Adidas have affirmed their plans to raise prices. Adidas went as far as mentioning that the escalated tariffs would ultimately lead to increased costs across all its offerings for the U.S. market. In a similar vein, in April, Stanley Black & Decker – an entity that holds numerous power tool brands – applied an average price rise in the high single-digits as a response to the tariffs. Additional price rises are projected over time.
Consumer goods corporation Procter & Gamble suggested that it would deliberate on raising prices in select categories and markets. Now, let us outline a cursory overview of the tariffs imposed by Trump: approximately a 30% tariff on China for a term of 90 days, reduced from an initial 145%. Tariffs as steep as 25% have been imposed on Mexico and Canada, alongside a universal baseline tariff of 10% on the majority of countries, while Trump has been negotiating trade agreements with several nations.
A multitude of diverse import taxes have been enforced on commodities such as automobiles, steel, aluminum, with plans underway to introduce similar import taxes on pharmaceutical drugs. Technology giant Apple was threatened with a 25% tariff on its products unless the production of iPhones was relocated to the U.S.
Consequently, Apple’s CEO declared that the majority of iPhones sold in the U.S. during the current fiscal quarter would be sourced from India, with other devices like iPads being brought in from Vietnam. In an extension of his trade war with the European Union, Trump threatened to impose a 50% tax on all imports originating from the 27-member bloc. Yet, he did later announce that the enforcement of this 50% tariff on the EU would be postponed to allow further negotiation time between both parties.