HP Joins Companies Stockpiling Products Ahead of Potential Tariffs
HP Inc. (HPQ) is stockpiling products in anticipation of potential tariffs imposed by President Trump. CEO Enrique Lores announced inventory buildup in a recent interview at the World Economic Forum in Davos, Switzerland.
This move mirrors similar actions by Suntory, which has stockpiled whiskey in Europe for a year's supply. Global concerns revolve around the potential impact on HP's AI PC demand and tariffs in 2025.
China is a significant market and component sourcing destination for HP. Increased tariffs could raise material costs and necessitate higher consumer prices. Tariffs of 10-20% on most imports and 60% on Chinese imports have been proposed.
A large US electronics retailer board member noted that 50% of their time is spent analyzing tariff scenarios due to high exposure to China imports.
Despite tariff concerns, HP has reported mixed financial results. PC sales declined 4% in the latest quarter, while commercial sales rose 5%. However, PC division operating margins have decreased year-over-year.
Analysts attribute HP's challenges to competitive pricing and the need to absorb higher memory costs. JPMorgan's Samik Chatterjee highlights the uncertain market outlook for PCs.
Follow the latest news from the World Economic Forum in Davos, including:
* Coinbase CEO advocates for a strategic bitcoin reserve
* Trade war with China anticipated following Trump's inauguration
* Bank of America CEO discusses potential Fed response to Trump's policies
* Suntory's whiskey stockpiling in Europe
* Insights on the impact of Trump's presidency on corporate America