This sound is produced automatically. Please let us know if you have feedback.
Dive brief:
- “Procter & Gamble is delaying its efforts to balance the supply chain with the Trump administration tariffs to make their impact on suppliers clearer,” said CFO.
- Schultan said existing tariffs have had the most impact on raw materials and packaging and some end products from China. The retaliatory tariffs completed the most impact of the US products issued to Canada.
- “The supply chain changes need certainty,” said Schultan.
Dive insight:
The P&G expectation approach to tariffs is different from manufacturers in trying to deceive the impact of taxes. Pharmaceutical companies PFizer and ELI Lilly are ready to increase US production to prevent tariffs, and the US automotive industry is seeking to relieve the White House that taxes for automakers billions of dollars, rising consumer prices and low sales.
The rival P&G Colgate-Palmolive joined US manufacturers that diverse supply chains and reduce confidence in China, which has reached the highest tariffs imposed by the Trump administration.
More than seven or eight years, P&G has invested more than $ 10 billion in the United States to bring production closer to consumers. However, reducing tariff impact requires further changes in business operations.
“I think it is clear that productivity, innovation and pricing are probably the short -term leverage that we will use,” Scholten told investors.
On Monday, Procter & Gamble refused to explain Scholton’s comments.
“It is early to try to determine the effects of long -term tariffs to the extent that we are affected,” said a spokesman for the P&G.
P&G is financially damaged by the Trump administration tax. The company has reduced its sales forecast for fiscal year 2025 to Flat from a 2 % increase to 4 %. The impact of the pre -tax growth tax on the current quarterly financial quarter, which ended in June, is $ 100 million to $ 160 million, and according to what the company knows today, the impact of the next fiscal year is $ 1 billion to $ 1.5 billion.
However, it is still soon investing in major supply chain changes, CFO said.
“So we are really waiting for confidence at this time to make decisions because these decisions are generally a) they have several months, sometimes, and b) they have the same lead time,” Scholtan said. “So any sharp reaction in the knee does not feel completely.”
About the Author
