The Trump administration’s tariffs on steel imports are driving up raw material costs for home appliance-maker Whirlpool Corp.
Chief Executive Office Marc Bitzer estimated Tuesday that the Benton Harbor, Mich.-based company’s raw material costs would be about $350 million in 2018, a $150 million increase from the start of the year, as overseas suppliers raise prices to cover the tariffs of 25 percent on steel and 10 percent on aluminum they must pay to ship the metals to Whirlpool’s U.S. factories.
President Trump imposed the duties earlier in March, eventually charging them even to allies such as the European Union, Mexico and Canada. All three retaliated, escalating global trade tension, while the White House initiated a separate dispute with China, threatening levies on $500 billion of imports from the world’s second-largest economy.
“Uncertainty related to tariffs and global trade actions” is pinching profit margins for appliances like washers and dryers, Bitzer said on an earnings call. While the impact was limited in the three months through June, it’s likely to climb in the remainder of the year, Whirlpool said.
“We’ve seen continued pressure on steel costs,” Chief Financial Officer Jim Peters added.
While an array of corporate executives, economists and even lawmakers from the president’s own party have warned that Trump’s protectionist policies will disrupt global supply chains and may undermine the benefit of last year’s tax cuts, the president has shrugged off their concerns.
On Tuesday, he declared that “tariffs are the greatest,” and said they are prompting world leaders to negotiate new agreements that benefit the U.S.
“Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the ‘piggy bank’ that’s being robbed. All will be Great!” he said on Twitter.
Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!
— Donald J. Trump (@realDonaldTrump) July 24, 2018
Some of Trump’s tariffs are benefiting Whirlpool, too. Bitzer told investors earlier that duties on imported washing machines would be a “positive catalyst” for the company.
Still, sales at Whirlpool dropped 8.8 percent to 16.1 million units for the quarter that ended on June 30, as U.S. volume dropped 8.6 percent to 5.24 million units.
