Ohio-based Procter & Gamble said it expects to face $1 billion in additional costs, largely tied to President Donald Trump's new tariffs.
On Tuesday, Procter & Gamble CFO Andre Schulten told investors that the company expects to incur $200 million in taxes from materials and products imported from China and $600 million on goods coming to the U.S. from the rest of the world. The company also cited $200 million in costs from retaliatory tariffs on U.S. exports to Canada.
“(It's) very, very difficult to get your arms around, which is the potential for retaliatory tariffs, what -- these will be tariffs imposed by other countries on the U.S. That's the situation we have right now with Canada, which has imposed a 25% tariff on imports of products from the U.S. into Canada. And in our case, that ends up being a big impact," said Procter & Gamble CEO Jon R. Moeller.
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Many economists have said that the cost of import taxes on companies will be passed along to consumers in the form of higher prices. Procter & Gamble leaders did not say how much prices could increase because of the tariffs.
Procter & Gamble has numerous brands under its umbrella, including Pampers, Tide, Charmin, Bounty, Folgers, and Vicks.
Procter & Gamble manufactures many of its products in the U.S. but sources some of its raw materials from outside the U.S.
Moeller also noted that a potential headwind for the company is President Trump's immigration policy, as the administration has promised to increase the number of deportations and limit visas to the U.S.
"There's no one more frustrated with that than I," he said about the uncertainty of tariffs and immigration. "But as you look at the predictability and you think about things like what's the impact of immigration status and immigration policy on consumption over time? What's the impact of tariffs and related both pricing and potential supply chain shifts and portfolio shifts over time? If you look at a place, what's the impact of inflation? What's the impact of interest rates?"
