As tit-for-tat tariffs take effect in major global markets, some companies are already raising prices or making business changes to cope with higher costs.
In response to Trump administration tariffs on steel and aluminum imports, Canada, Mexico and the European Union have each retaliated with duties on U.S. goods. Mexico’s tariffs took effect June 5 on U.S. products such as pork, cheese, cranberries, whiskey and apples. The EU enacted tariffs Friday on more than $3 billion worth of U.S. goodsincluding bourbon, yachts and motorcycles. Canada plans to implement tariffs on July 1 on up to roughly $12.5 billion in imports of U.S. products such as yogurt, caffeinated roasted coffee, toilet paper and sleeping bags.
The White House’s stated goal in implementing tariffs is protecting U.S. jobs, but the initial business response indicates U.S. companies are taking a hit.
Here are some of the American-made goods that are being affected and the markets where their prices are going higher:
Jack Daniel’s — The price of a 700 ml bottle will go up about 10 percent in the EU as a result of the bloc’s tariffs on certain U.S. goods, according to a statement from parent company Brown-Forman.
Motorcycles — Harley-Davidson said Monday it is shifting some production overseas since EU tariffs will increase the average cost of a bike by $2,200. The duties will also reduce the Wisconsin-based company’s 2018 profits by 5 to 8 percent, according to a CNBC analysis of Thomson Reuters data and Harley’s cost projections. Rising steel prices due to the tariffs could trickle through to the prices of bikes for U.S. customers at some point, but the company so far is maintaining that it will eat the higher costs.
Nails — Mid-Continent Nail, the largest U.S. manufacturer of nails, has laid off 60 of its more than 500 workers after U.S. tariffs on steel imports raised its costs by about a third and as of Wednesday resulted in a 70 percent drop in orders for July, according to spokesperson James Glassman.
Rather than buying from the Missouri-based company, customers are going to Chinese manufacturers who don’t pay tariffs on domestically sourced steel and can export nails duty-free to the U.S., Glassman said. “We can’t continue to operate on this basis. … We are asking the President and [Commerce Secretary] Wilbur Ross to grant an exclusion immediately because if that’s not done, there’s going to be 500 jobs lost.”
Cars — A 25 percent tariff on automobiles would increase the cost of every vehicle sold in the U.S., and the cost of the popular Toyota Camry, manufactured in Kentucky, would go up $1,800, Toyota said in a statement Wednesday. President Donald Trump threatened a 20 percent tariff on car imports last week.
Jeans — “Unilateral tariff impositions risk retaliation and destabilizing the global economy, in which case American brands, workers and consumers will ultimately suffer,” Levi Strauss said in an emailed statement to Bloomberg, according to a May report. The article added that Levi Strauss pledged to work with peers in the industry to show U.S. and EU leaders how the tariffs impact consumers and the “millions of people across our supply chain.”
In the same report, Abercrombie & Fitch CEO Fran Horowitz said the tariffs are “one more thing to lose sleep on in this industry.”
Levi Strauss and Abercrombie did not immediately respond to a CNBC request for comment.
Cranberries — The U.S. cranberry industry sells more than $127 million of cranberry products to the EU every year, according to Terry Humfeld, executive director of The Cranberry Institute.
“Since there is no domestic cranberry industry in the EU, costs could increase for manufacturers leading to higher prices for consumers, or reduced access to cranberries,” Humfeld said in an emailed statement.
Peanut butter is also on the EU’s tariff list. But Hormel Foods, parent of Skippy, said in a statement to CNBC that its peanut butter sold in Europe is predominantly manufactured in that market and tariffs should not have a significant effect.
Soybeans — China is set to impose an additional 25 percent tariff on U.S. soybeans and a total $34 billion worth of U.S. imports on July 6, in retaliation against the Trump administration’s planned tariffs on $34 billion in Chinese goods set to take effect the same day. China is the world’s largest consumer of soybeans and the second-largest destination for U.S. agriculture exports last year.
If Beijing implements a 10 percent tariff, total U.S. soybean exports could fall 18 percent, according to a study for the U.S. Soybean Export Council by Purdue University agricultural economists Wally Tyner and Farzad Taheripou. A 30 percent tariff would likely result in a 40 percent drop in U.S. soybean exports, resulting in a 5 percent price drop over a few years, the analysis said.
Soybean prices are down 8 percent so far this year, due largely to uncertainty over trade with China.