Global brands face cost pressures as US tariffs bite
The world's largest consumer and retail brands are discussing the impact of American tariffs on their operations during their own financial conferences. Some are already noticing increased import costs, especially from China, on which the US has imposed a 145% tariff.
For some companies, tariffs present a clear yet challenging issue: goods produced abroad, particularly in China, are now more expensive to transport to the US. To protect their profit margins, brands and retailers will be compelled to raise prices.
American tariffs. Global brands react
Business Insider reports that the Germany-based Adidas has warned that the prices of almost all its products in the US will increase due to the current tariffs. The company's CEO, Bjørn Gulden, stated that "we currently can't produce almost any of our products in the US." If tariffs remain in place, it will inevitably lead to increased prices for footwear in that market.
Amazon, on the other hand, has stated that it emphasises keeping the platform's prices low despite existing tariffs on imports from China. CEO Andy Jassy stressed that Amazon's wide selection of products is advantageous for consumers. Retailers also resorted to stocking up, but this is a short-term measure, especially as supply chain complications arise. When the idea was proposed to add the cost of imposed tariffs to the product price on Amazon, the White House immediately reacted. White House Press Secretary Karoline Leavitt called this proposal a "hostile and political act." Consequently, the company withdrew the idea.
Coca-Cola CEO James Quincey stated during a conference call about the company's financial results that the impact of tariffs on the company's operations is "manageable." Coca-Cola benefits from the fact that many ingredients come from local producers, so only specific products, like production machinery, are imported.
However, tariffs and broader backlash against the US still negatively affect the company. Coca-Cola has already noted a decrease in sales among Hispanic consumers in the US and parts of Mexico. In response, Coca-Cola began emphasising the local manufacturing of its drink in Mexico through the advertisement campaign "Hecho en México" (produced in Mexico - ed.).
