Procter & Gamble (PG) Plans Price Hikes if Tariffs Increase Import Costs
U.S. consumer goods giant Procter & Gamble (PG) is considering further price increases on its household essentials, including Tide detergent, in response to potential tariffs imposed by the Trump administration.
"We will be able to deal with whatever the administration decides to do," said Andre Schulten, P&G's chief financial officer. He emphasized that the company would initially attempt to offset tariffs by streamlining costs. "Incremental pricing" may be implemented for expenses that cannot be mitigated through productivity enhancements.
P&G maintained stable prices across its global portfolio of cleaning products, detergents, and toilet paper during the quarter ending December 31, while sales volumes increased. The company, renowned for its consumer goods prowess, procures raw materials globally and manufactures finished products closer to customers.
Rising fuel and labor costs have prompted P&G to raise prices in recent years. President Trump's proposed tariffs on imports from countries like Mexico and Canada could further escalate expenses.
"It remains a potential threat," stated Michael Ashley Schulman, chief investment officer of P&G investor Running Point Capital. "Quantifying the extent to which they can pass on tariffs to consumers is challenging."
P&G has revamped its razor blade supply chain to buffer margins in anticipation of tariffs. Competitor Edgewell has also secured Chinese chemical supply for sunscreens ahead of potential tariffs.
Schulten highlighted P&G's "formulation flexibility," enabling it to adjust product ingredients if tariffs render them costly or unavailable.
Furthermore, P&G has invested $6 billion in U.S. manufacturing over the past six years amidst supply chain disruptions caused by the COVID-19 pandemic.