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Concerns about Trump’s tariffs have entered a second stage among executives at the world’s largest power brokers.
I would broadly characterize the first phase as the shocking and tongue-in-cheek state that emerged in the seven days following this month’s election.
Leaders I spoke to in the aftermath of the election were still trying to make sense of the outcome and what it meant for their employees and businesses in the short term. Few were confident that President Trump would follow through on his series of head-scratching promises. And if they had a view, they had no intention of sharing it with you on the record.
As a reminder, President Trump has imposed tariffs of over 60% on China and up to 20% on most goods from other countries.
Well, welcome to the second stage. There, leaders are beginning to speak out publicly about the issue and are beginning to work together behind the scenes to try to change the president-elect’s mind on tariffs.
“Also, I spend time with my team that once something is announced, we want to take pricing actions for customers of some size. ,” Stanley Black & Decker (SWK) CEO Don Allan told me on Yahoo Finance this week (video above).
“We won’t do anything until we know this is what the new tariff world is going to look like.”
President-elect Donald Trump walks after watching SpaceX’s giant rocket Starship take off for a test flight from Starbase in Boca Chica, Texas, Tuesday, Nov. 19, 2024 (via Brandon Bell/Pool Associated Press) ·Related news organizations
Allan said he is spending time with politicians and people close to the incoming Trump administration to help them understand the negative effects of potential tariffs.
Alan explained: “If you look at our industry, if you take a current Chinese operation that makes power tools and bring it to the United States, it will cost about 60% to 70% more to manufacture that product. That’s significant. Consumers won’t pay that price, and if we’re going to reduce our exposure to China, which we are, we’ll already be looking at other Southeast Asian countries like Vietnam and maybe Mexico. It has been operated.”
Allan’s concerns about tariffs are echoed elsewhere.
“Look, if [tariffs do] If this happens, it will likely have macroeconomic implications and put further inflationary pressures on consumers. However, it is also important to note that we have increased flexibility to continue to evolve our supply chain, ensuring we are in the strongest possible position as trends unfold.” GAP CEO Richard Dixon spoke on the phone. Quarterly profit was higher.
Apparel industry peer Dan Sheridan, CEO of Brooks Running, said on the Opening Bid podcast that tariffs would make sneaker prices even higher. “Another 20-25 [percent tariff] …It’s big. “This debate is huge. As companies start to disinvest from R&D, to absorb that…you have to pass it on to consumers, but you can’t fully pass on a 25% cost increase. ” he said.
When it comes to macroeconomic implications, Goldman Sachs chief Jan Hadzius tried to give investors some straight reality on the topic this week.
“A shift to a broader trade war would strengthen the dollar, but it would also put pressure on global equities. Abnormally high valuations for U.S. stocks not only hurt long-term expected returns, but also “It amplifies the potential response to economic downturns,” Hadsius said in the new study. Note.
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Hazzius said tariffs could ultimately tighten financial conditions in the short term and weigh on U.S. economic growth.
“We want low prices for our customers and members. We support low prices and value for our customers and members. Therefore, we will do everything we can to not raise our prices. But for now, this is a guess. We don’t have any tariffs. We know what categories the tariffs may apply to, and even which countries they apply to, and if we look back at history when the tariffs were enacted seven years ago, we know that customers “Certainly, prices have gone up,” said John, Walmart’s CFO. David Rainey told Yahoo Finance’s Morning Brief.
The bottom line is that American companies are starting to speak out against self-imposed tariff officials. Who knows if they can do it to his face if necessary.
But leaders have a point when it comes to tariffs, and their claims may be borne out in the form of significant price hikes for consumers and corresponding declines in stock prices.
Three times a week, I facilitate insightful conversations and chats with some of the biggest names in business and markets. starting bid Podcast. You can find more episodes. video hub or your Preferred streaming service.
Brian Sozzi I’m the executive editor of Yahoo Finance. Follow Sozzi on X @BrianSozzi And even more linkedin. Have a tip about a deal, merger, activist situation, or more? Email brian.sozzi@yahoofinance.com.
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