Soda, Motorcycle Prices Rise as Tariffs Hit Home for Consumers
Consumers are starting to see higher prices for recreational vehicles, soda, beer and other goods that now cost more to make as a result of recent tariffs on metals and parts.
When costs rise, manufacturers generally must chose whether to absorb bigger bills for aluminum, steel and imported components, or pass the increases along to customers. Many manufacturers in recent days, including Coca-Cola Co. and Polaris Industries Inc., have said they plan to raise prices.
U.S. steel and aluminum prices are up 33% and 11%, respectively, since the start of the year, as producers and their customers begin to price in the tariffs that the Trump administration first applied on foreign-made metal in March. Tariffs on a host of additional imported products from China this month have added costs for companies that use those components to assemble their products in the U.S.
(snip)
U.S. manufacturers have been on a tear. Factory output is up 22% since a recession low in June 2009. Industrial stocks have climbed this month as companies including 3M Co. and Honeywell International Inc. reported higher-than-expected sales and profits. Some of those companies said tariffs were less of a concern than rising labor and shipping costs, and that they would make production changes before raising prices.
But other executives and investors fear rising costs as a result of the tariffs could sap customer demand and crimp profits.
And some companies say they believe a strong economy will support higher prices.
(snip)
Consumer prices rose 2.9% in June from a year earlier, the Labor Department said, the highest rate in more than six years. Producer prices, a measure of what businesses are paid for goods and services, have also climbed to the highest level in years. The producer-price index rose 3.4% in June from a year earlier as energy and shipping costs climbed along with metal prices.
(snip)
Strong demand for heating and ventilation equipment is helping manufacturers in that sector recoup most of the added costs that have resulted from the steel and aluminum tariffs. Manufacturers of such equipment have succeeded before at raising prices to cover—and even profit from—higher commodity costs, said Stephen Volkmann, an analyst at Jefferies & Co.
Lennox, one manufacturer of such equipment, has raised prices to cover higher costs and plans a second round to cover the additional $50 million the Richardson, Texas, company expects to spend on steel this year. Lennox said it also expects to pay $20 million more for freight and $5 million for tariffs on components such as motors from China this year.
Office furniture maker Steelcase Inc. also raised prices in June for the second time in four months as steel prices climbed. “It’s been a long time, if ever, that we’ve done two price increases back to back as quickly as we did,” Chief Executive James P. Keane said.
https://www.wsj.com/articles/soda-motorcycle-prices-rise-as-tariffs-hit-home-for-consumers-1532862000 (paid subscription)
= new reply since forum marked as read
I hope it gets to 20-30 pct.
