A man rests on a bicycle next to containers outside a logistics center near Tianjin Port, in northern China, May 16, 2019. REUTERS/Jason Lee
NEW YORK (Reuters) – Some executives from U.S. companies that sell clothing, food and other products warn that costs related to the latest round of tariffs on goods from China will be passed along to consumers in the form of higher prices.
The U.S. increased tariffs on $200 billion in Chinese imports to 25% from 10% last week. China retaliated with $60 billion of its own levies on a range of U.S. goods including frozen vegetables and liquefied natural gas.
U.S. President Donald Trump has also threatened an additional round of tariffs on $300 billion that would cover nearly everything imported from China to the United States.
Del Monte Foods Inc – “It’s not just tariffs. Transportation costs are up, labor costs are up,” Chief Executive Officer Greg Longstreet told Reuters at a conference in New York. “It’s an inflationary environment. A lot of that’s going to have to be passed on. The consumer is going to have to pay more for a lot of critical goods.”
Del Monte has already raised prices on many products, including mandarin oranges that it imports from China, and will do so again with tariffs rising, he said.
Walmart Inc – “Higher tariffs will lead to higher prices for customers,” Walmart Inc Chief Financial Officer Brett Biggs told Reuters in an interview. He added that the company, known for low prices, will try to minimize the effect of the levies on the company and its customers.
Macy’s Inc – “The increase of the third tranche from 10% to 25% on May 10 does have some impact, particularly on our furniture business. However, the team anticipates that this can be mitigated,” Macy’s CEO Jeffrey Gennette told investors on a conference call.
“It’s too early to comment on what we think that’s going to mean in terms of potential price increases and what categories are going to be more affected than others,” he said.
Ralph Lauren Corp – “The tariffs enacted to date have a limited impact on our business, but our teams are prepared for multiple scenarios and have accelerated the diversification of our supply chain to mitigate the long-term impact of any potential tariff outcomes,” CFO Jane Nielsen told investors on a conference call.
Reporting by Nandita Bose, Siddarth Cavale, Rod Nickel; Editing by Susan Thomas