Barbie factory in Mexico
In every dream home, a heartache...
“Tariffs are something we’ve managed for many years, and we’ll just continue to manage that,” Walmart's CEO McMillon said on a recent earnings call. “We can’t predict what will happen in the future, but we can manage it really well."
“Let’s be real honest: Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we’ve never seen,” Ford Motor Co. (F) CEO Jim Farley said at a recent investor conference. Just shy of 15% of Ford’s sales are sourced from Mexico, according to S&P Global Mobility data.
“Frankly, it gives free rein to South Korean, Japanese and European companies that are bringing 1.5 million to 2 million vehicles into the U.S. that wouldn’t be subject to those Mexican and Canadian tariffs,” he added.
Best Buy has been warning customers that the president’s tariffs may result in potential price hikes for months. The duties effect on its operations is set to increase on Tuesday.
CEO Corie Barry told MPR News in early February that about 60% of the company’s cost of sales flows through China “in some way, shape or form.” Trump has said his duties on Chinese imports will grow to 20% from 10% on Tuesday.
“We’ll work with vendor partners, but at the end of the day, these really do become costs that get passed on to the American consumer,” she said. “They flow through that entire supply chain, and they become part of the baseline cost.”
Acer CEO and chairman Jason Chen has said his laptops will likely cost an additional 10% in the U.S., directly pointing to Trump’s tariffs.
“We will have to adjust the end user price to reflect the tariff,” Chen told The Telegraph in mid-February. “We think 10pc probably will be the default price increase because of the import tax. It’s very straightforward.”
The CEO added that some companies will likely use the tariffs as an excuse to raise prices by more than necessary. Most of Taiwan-based Acer’s laptops are assembled in China.
Both Mattel and Hasbro have said they may need to raise prices in the face of Trump’s tariffs on Mexico and China.
Mattel, the company behind toy lines like Barbie and Hot Wheels, produces about 40% of its toys in China, compared to the industry average of 80%, Mattel’s head of finance, Anthony DiSilvestro, said on an earnings call. Less than 10% of its toys are made in Mexico, with no exposure to Canada.