President-elect Donald Trump’s proposed tariffs have already begun to hit businesses across several industries, and many are taking steps to safeguard their profits. The tariffs, which include a 10 to 20 percent tax on all imports and a possible 60 to 100 percent tax on products from China, are causing widespread concern, with the costs likely to hit people’s pockets directly. of consumers.
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Philip Daniele, CEO of AutoZone (NYSE:AZO), has stated unequivocally that if these fees are imposed, consumers will bear the burden. On a recent earnings conference call, Daniele said, “If we get tariffs, we will pass those tariff costs on to the consumer.” The company hopes to raise prices even before the tariffs take effect, anticipating how these new policies will affect its margins.
Many other companies, particularly those that rely significantly on foreign suppliers, are also preparing for possible price increases, so AutoZone is not the only company preparing for these changes.
Steve Madden (NASDAQ:SHOO) is one of the first companies to step forward. The footwear retailer, which sources 70% of its products from China, announced it will halve its dependence on Chinese production, moving to places such as Vietnam, Cambodia and Mexico. Even with these changes, customers should expect price increases as Steve Madden manages increased expenses related to the effects of tariffs and changes to supply chains.
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Columbia Sportswear (NASDAQ:COLM) also expressed concerns about how tariffs would make it more difficult to maintain the affordability of its products. According to CEO Tim Boyle, the company could be forced to raise prices to cover the additional fees.
The National Retail Federation expressed similar views, describing the tariffs as “a tax on American families” and warning that the cost of everyday goods such as furniture, shoes and clothing could rise sharply.
According to their research, a $90 pair of sneakers could cost between $106 and $116 and a $100 coat could cost up to $21 more. Shoe companies, in particular, are worried: Since nearly 99% of all shoes sold in the United States are made abroad, it will be difficult to move production to the United States anytime soon.