Companies have a playbook for tariffs under Trump. It includes price increases.
Subscribe to enjoy similar stories. Companies are weighing possible price increases in response to any new tariffs proposed under the incoming Trump administration, a step that some finance chiefs say they’re wary of taking as customers feel the strain of inflation. President-elect Donald Trump has talked about a tariff of 60% or more on goods from China and an overall tariff of 10% to 20% on imported goods.
Still, his plans for global trade remain uncertain. Many big companies have a playbook for handling tariffs after navigating Trump’s first term in office, when he targeted imports from China and aluminum and steel imports. U.S.
importers are on the hook to pay customs duties. Companies have several options to offset the additional cost: raising prices, cutting costs or taking a hit on their profit margin. Some companies already have diversified their supply chains away from China in recent years to avoid the risk of future trade skirmishes.
Chief financial officers say that while price hikes aren’t their only option to respond to potential tariffs, they’re nonetheless on the table. “We consider all the levers that we have at our disposal, and back in 2019 pricing was one of those," said Mandy Fields, CFO at E.l.f. Beauty.
Oakland, Calif.-based E.l.f. Beauty raised prices by $1 on one-third of its goods in response to tariffs imposed in 2019 on Chinese imports. At the time, E.l.f.
Beauty, which is known for its low-cost makeup and skin-care products, produced roughly 99% of its goods in China. Since then, the company has diversified its supply chain to include other parts of Asia, Europe and the U.S. The company now produces about 80% of its items in China, Fields said.
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