Manufacturers are telling investors that they will raise prices if needed to offset the costs of the Trump Administration’s new tariffs.
“If the tariffs remain…to preserve our margins and high level of service we're going to need to pass some of that on,” Michael Olosky, CEO of wood construction products maker Simpson Manufacturing, said during an earnings call on Monday.
On Super Bowl Sunday, President Donald Trump announced 25% tariffs on all steel and aluminum imports. But at least some producers raised their prices even before that. Olosky said that some of Simpson Manufacturing’s steel suppliers have in recent weeks “announced a couple of price increases” in anticipation of the steel and aluminum tariffs.
Rockwell Automation, which makes industrial automation products, has a tariff mitigation strategy that includes a “combination of maintaining profitability and utilizing resiliency in our operations and supply chain to mitigate impacts under a variety of scenarios,” CFO Christian Rothe said during the company’s earnings call, also on Monday.
The most immediate actions involve price increases, Rothe said. Rockwell already has adjusted its pricing to reflect the 10% tariff on Chinese goods the Trump Administration enacted earlier this month. The manufacturer will have to further raise costs if the now-delayed 25% tariffs on Canadian and Mexican imports eventually go into effect, he added.
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“These actions are disruptive for our customers, of course, and there will likely be some noise in the near-term,” Rothe said. “We are working hard to minimize that disruption and ensure continued levels of customer service.”
Simpson Manufacturing last had to bump up its price tags in 2022, and actually dropped prices in 2023, Olosky said. But in the time since, Simpson Manufacturing has contended with “inflation in all of our production and transportation costs, except for the steel raw materials side.” The new tariffs have changed that.
“We're also looking at the other cost buckets, doing everything we can to drive those down. But again, if we're not able to offset some of those cost increases we see everywhere else, we may need to take action to preserve our margins and level of service,” he said.
Costs of goods imported from Canada, China, and Mexico made up less than one-tenth of Rockwell’s 2024 revenue, according to Rothe. Imports from Mexico totaled approximately $350 million last year, and imports from Canada and China were each about $100 million, he said.
This is not American manufacturers’ first rodeo with Trump-enacted steel tariffs. As CFOs may know from previous experience, periods of “high tariff activity don’t necessarily end when tariffs ease up,” CFO Brew previously reported.