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From Ford to Walmart to Procter & Gamble, a growing number of iconic American companies are warning that President Donald Trump's US import tariffs are increasing costs and prices.
Jim Hackett, CEO of Ford, the second-largest US automaker, said Wednesday that Trump's taxes on imported steel and aluminum cost Ford $ 1 billion and threaten to drive up prices in the industry. automobile.
Similarly, Walmart, the largest US retailer, told the administration that Trump's latest round of taxes – on $ 200 billion of Chinese imports – could raise prices for his customers. Walmart specifically mentioned items ranging from car seats, cribs and backpacks to hats, pet products and bicycles.
Procter & Gamble, the consumer goods giant, warned of potential price hikes and job losses due to tariffs.
In the meantime, Coca-Cola consumption costs more because of Trump's prices. Macy's also warned of likely price increases. So, Gap.
On Wednesday, Federal Reserve Chairman Jerome Powell addressed the issue at a press conference after the Fed announced its latest interest rate hike. Asked about Trump's tariffs that drive up prices for US consumers, Powell agreed that Fed officials are hearing companies talk about higher costs ahead.
"You do not see it yet," said the president, referring to data from the Fed's studies.
But, acknowledged Mr. Powell, "tariffs could serve as a basis for businesses to raise prices in a world where they are very reluctant and unable to raise prices."
At its own press conference in New York on Wednesday, Trump rejected any suggestion that his rates posed an economic risk, echoing his administration's claims that consumers would barely notice new taxes.
"This has had no impact on our economy," said the president after meetings with foreign leaders at the UN General Assembly.
Hackett, in a television interview on Wednesday, revealed that the $ 1 billion estimate that Trump's steel and aluminum prices were costing Ford. He said the figure is a year-over-year increase from March to 2019.
Ford buys most of its metals from US producers, who have raised their prices this year because of tariffs on their foreign competitors, the company said.
Other vehicle manufacturers producing vehicles in the United States are experiencing the same price increases, said Peter Nagle, an analyst at IHS Markit. Although they can currently absorb the increased costs, they will eventually have to transfer at least part of the costs to customers, he added.
"They maintain price discipline now that the consumer can not bear these higher prices," said Nagle. But if tariffs remain in effect until the end of Trump's term, "it is clear that some of these costs should begin to be passed on to the consumer."
Ford will not comment specifically on price increases, but said it would "continue to make the decisions necessary to stay competitive."
In March, the Trump administration imposed a 25% tariff on imported steel and 10% on aluminum from some countries, including China. He added Canada, Mexico and the European Union in June. The administration justified the tariffs by qualifying the Foreign steel and aluminum threat to US national security.
Before tariffs were applied, US metal producers raised prices as companies tried to buy before tariffs came into effect, Nagle said. He said steel prices have risen 25% since the start of tariffs and are expected to reach nearly 30% next year.
Automakers would increase sticker prices or cut discounts on new cars, trucks and SUVs, Nagle said. The administration is also considering tariffs of 25% on imported vehicles, also based on national security concerns. These tariffs would raise prices, slow down auto sales and could halve US economic growth by 2020, Nagle said. Other countries are also likely to respond to imports from the United States.
"You can not have a trade war without the automobile," he said.
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