NEW BRITAIN, Conn. - Stanley Black & Decker announced it will cut costs by $250 million in 2019, lowering its profit outlook as tariffs are boosting costs of its product overseas.
The tooling giant saw a 10 percent decline in profit over the same period last year. $370 million in costs this year were associated with tariffs, higher commodity costs, and the impact of currency fluctuations.
At a meeting in Connecticut last week, Stanley Black & Decker CFO Donald Allan Jr. told an audience of manufacturing executives that tariffs - mainly a 25 percent levy on steel, aluminum, and finished goods and retaliatory tariffs by China - are impacting Stanley Black & Decker “in a very significant way.”
Allan said higher prices resulting from tariffs will force businesses to cut costs, leading to layoffs.
A total of $250 billion has now been applied to Chinese tariffs. China earlier threatened to retaliate with $60 billion in tariffs of their own. Bloomberg sources say China will reject any further trade talks altogether.
If China retaliates, the Trump Administration said it would impose another $267 billion in tariffs.
“For months, we have urged China to change these unfair practices and give fair and reciprocal treatment to American companies,” Trump said. “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices.”
The U.S. first imposed a 25 percent duty that affected $34 billion in Chinese imports. A second round then applied tariffs of $16 billion. China answered back with extra 25 percent duties on 545 U.S. products. Then the Trump Administration suggested tariffs on $200 billion worth of Chinese products.
The Administration reportedly received more than 6,000 written comments and testimony from U.S. companies and groups, including the National Hardwood Lumber Association, urging reconsideration, and saying that it could ruin their businesses. reported USA Today. As a result, 300 items were removed from the list, including child-safety furniture.
Since the summer, U.S. companies in China have reported spikes in delayed product approvals, worker visas, and licensing applications. There have also been cases of Chinese officers ordering seemingly random quarantines for certain products, and jumps in random border inspections.
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