The Trump administration’s volley of tariffs has U.S. companies scrambling for ways to absorb — and if possible avoid — the added business costs.
Some enterprises, from small businesses to nationally recognized brands, have already announced higher prices, citing President Trump’s tariffs. While others, from footwear companies to furniture brands, are warning consumers to brace for increased costs to come.
Amazon CEO Andy Jassy told CNBC Thursday that he expects the tariffs to lead to higher prices on a host of consumers goods, noting that the site’s third-party sellers are likely to pass on tariff-related costs.
Some consumers are also preparing for price hikes by stocking up on goods they think are likely to become more expensive if U.S. “reciprocal levies” on dozens of countries, which are paused for 90 days, take effect.
A 10% tariff on all U.S. imports remains in place. China, which accounts for nearly a third of all goods imported into the U.S., faces levies of up to 145% for some items. In an escalation of the trade war between the world’s two largest economics, Beijing fired back Friday by announcing it will hike duties on American exports from 84% to 125% and deriding Mr. Trump’s tariffs as a “joke.”
Tariff fees on what you buy
Although the tariffs and retaliatory moves by other countries have yet to hit economic growth, U.S. businesses aren’t waiting around. Some are introducing “tariff surcharges,” announcing new prices on their websites and in letters to consumers.
Labucq, which sells high-end footwear that is fabricated in Italy, addressed tariffs and their effect on pricing in a recent social media post. The company said a 20% U.S. tariff on imports from the European Union, which Mr. Trump announced on April 2 before pausing them, would require the company to hike prices by 10% beginning April 15. Labucq said its pricing will then jump by an additional roughly 10% on May 7, noting the increases are necessary for it to “remain sustainable.”
Dame, a sexual wellness brand that makes adult toys and personal care products, has implemented a $5 “Trump tariff surcharge” that is automatically added to customers’ online shopping carts at checkout.
Dame CEO Alexandra Fine said the fee doesn’t cover all of its extra costs and that the company is analyzing its pricing given that most of its products are made in China. “Our whole industry is in China, so we’ve already seen the impact,” she told CBS MoneyWatch.
Fine also said she wants to be transparent with customers about what is happening, rather than quietly inflating prices.
“The intention of adding the Trump tariff surcharge as a line item at checkout was to remind people that this is an extra tax on us. I wanted people to understand why it’s more expensive — that it’s because of political decisions that were made,” she said.
Other companies are also moving to raise prices. In a quarterly earnings call last month, a senior executive with U.S. chip maker Micron said some of its products would be subject to higher U.S. tariffs on Canada, Mexico and China and that it plans to “pass those costs along to our customers.” …