Factbox: US executives weigh risks from proposed Trump tariffs

Zebra Technologies

20/11/2024 17:19

(Adds Walmart, Home Depot, Lowe's and Williams-Sonoma)
       Nov 20 (Reuters) - Top executives at many U.S. companies
are preparing for the impact from President-elect Donald Trump
fulfilling his campaign promise of raising tariffs, a move that
could disrupt supply chains and worsen inflationary pressures.
    Here is what major companies and C-suite executives have
said on tariffs: 
     
 Company             Commentary
 Tesla     July 23   "... It doesn't make sense to invest a
  TSLA.O             lot in Mexico if (heavy tariffs are
                     imposed on vehicles produced in the
                     country)," said CEO Elon Musk.
 Dollar    Sept. 4   "... We have long-standing contingency
 Tree                plans to diversify our supply chain in
  DLTR.O             a timely and cost-effective manner. We
                     also have the flexibility to adjust
                     product specs and price points to
                     address any changes in the market,"
                     said Chief Operating Officer Mike
                     Creedon, who has now become the
                     interim CEO.
 KKR       Oct. 24   "We spend most of our time here
  KKR.N              focusing on things that we can
                     control. That's (tariffs) not one of
                     them," said CFO Robert Lewin. 
 Zebra     Oct. 29   "The team is actively working on
 Technolo            mitigation plans for some of the new
 gies                tariffs that are coming into place.
  ZBRA.O             And we continue to actively work with
                     our supply chain partners," said CFO
                     Nathan Winters.
 Elf       Nov. 6    "We certainly have run a number of
 beauty              scenarios for potential tariffs. It's
  ELF.N              still too early to tell what level
                     those may come in, but we have a
                     playbook and we have a number of
                     levers at our disposal," said CFO
                     Mandy Fields. 
 Axon      Nov. 7    "We've certainly lived in an
  AXON.O             environment of tariffs before. And so
                     our philosophy is generally to be
                     pretty flexible," said CFO Brittany
                     Bagley.
 IFF       Nov. 6    "Those tariffs could actually
  IFF.N              intuitively be advantageous to our
                     overall business broadly," said Chief
                     Financial and Business Transformation
                     Officer Glenn Richter.
 Under     Nov. 7    "It will be interesting to see how
 Armour              things develop with whether we still
  UAA.N              have a split Congress or not," said
                     CFO David Bergman.
 Steven    Nov. 7    "We have been planning for a potential
 Madden              scenario in which we would have to
  SHOO.O             move goods out of China more quickly.
                     We've worked hard over a multi-year
                     period to develop our factory base and
                     our sourcing capability in alternative
                     countries like Cambodia, Vietnam,
                     Mexico, Brazil, et cetera," said CEO
                     Edward Rosenfeld.
                     
                     "You should expect to see the
                     percentage of goods that we source
                     from China to begin to come down more
                     rapidly going forward."
 Tapestry  Nov. 7    "Tariff regime is changing over time.
  TPR.N              So, we're pretty well-versed in
                     managing through this," said CFO Scott
                     Roe.
 Home      Nov. 12   "... Whatever happens in tariffs will
 Depot               be an industry-wide impact, it won't
  HD.N               discriminate against different
                     retailers and distributors who are
                     importing goods. The type of product
                     as an industry is generally sourced
                     from the named countries," said CEO
                     Edward Decker.
                     
                     "There has been some diversification
                     of those sources, but clearly a bit of
                     concentration in Southeast Asia and
                     China in particular. We source well
                     more than half of our goods
                     domestically and in North America, but
                     there certainly will be an impact."
 Walmart   Nov. 19   "We're concerned that significantly
  WMT.N              increased tariffs could lead to
                     increased costs for our customers at a
                     time when they are still feeling the
                     remnants of inflation," a Walmart
                     spokesperson said.
                     
                     "We never want to raise prices ... so
                     we will work with government officials
                     and our suppliers to minimize the
                     impact on our customers."
 Lowe's    Nov. 19   "Roughly 40% of our cost of goods sold
  LOW.N              are sourced outside of the U.S., and
                     that includes both direct imports and
                     national brands through our vendor
                     partners," said CFO Brandon Sink. 
                     
                     "And as we look at the potential
                     impacts (of tariffs), it certainly
                     would add to product costs."
 Williams  Nov. 20   "We significantly reduced our China
 -Sonoma             source goods from 50% to 25% over the
  WSM.N              last few years," said CFO Jeff Howie.
                     
                     "We are prepared to reduce our
                     exposure to China further if tariffs
                     increase ... So we're currently
                     evaluating quantifying the impact from
                     additional tariffs."
 
    Source: Earnings calls

 (Reporting by Niket Nishant, Shivansh Tiwary, Manya Saini and
Ananya Mariam Rajesh in Bengaluru; Editing by Devika Syamnath
and Alan Barona)
 ((Niket.Nishant@thomsonreuters.com))