Some companies held off on price hikes as Trump delayed tariffs. That ends soon.
- - Some companies held off on price hikes as Trump delayed tariffs. That ends soon.
Emily LorschAugust 1, 2025 at 5:38 AM
Companies behind the best-known brands are sounding the alarm: Prices are going up.
Hershey, Procter & Gamble and Mondelēz have said price adjustments will soon start showing up on store shelves. For shoppers, that could mean higher prices for popular items like Bounty paper towels, Reese’s Peanut Butter Cups and Clif Bars.
Numerous companies told analysts and investors on recent earnings calls that higher tariffs are going to hike costs. In many cases, that will translate to higher prices for consumers.
Concerns about inflation persist even though price growth has come down considerably from its heights during the Biden administration. On Thursday, the Federal Reserve’s favorite inflation gauge climbed more than expected. The personal consumption expenditures price index, a measure of consumer spending on goods and services, rose 2.6% from a year ago. Analysts were expecting a rise of 2.5%.
Experts have warned that elevated tariffs would mean higher prices on consumers, but President Donald Trump's delays mean some of the most expansive and aggressive tariffs have yet to be implemented.
That changes Friday, when Trump’s reworked global tariffs take effect after he suspended them in mid-April. Some are as high as 50% for countries like Brazil, while others are 15% to 30% for the European Union and countries like South Korea, Japan and India.
Proceeds from tariffs that Trump has already implemented are indeed bringing in additional revenue to the U.S. Treasury. In June, $27.2 billion landed into its coffers. In May, it was $22.8 billion.
And Trump and his administiration have stressed that tariffs can bring jobs back to the U.S. while generating revenue that can pay down the U.S. debt or end up in taxpayers' pockets.
"President Trump’s tariff policies have drawn historic investments and opened up global markets for U.S. businesses," Commerce Secretary Howard Lutnick posted Wednesday on X.
Trump has also announced deals with a handful of major U.S. trading partners including South Korea, Pakistan, the E.U., Indonesia, the Philippines and Japan, though details of some of the deals remain largely unknown.
In North America, Procter & Gamble recently announced price adjustments on about 25% of its products, which will go into effect in the next few months. It said the average increase will be roughly 2.5%, broadly in line with overall inflation.
“These adjustments reflect a mix of factors, including higher raw-material and supply-chain costs, investments in product innovation and the impact of recently announced tariffs,” a spokesperson said.
The global snacking giant Mondelēz, which is behind brands such as Oreo and Ritz, also announced incremental pricing to take effect in the coming months.
“We are clearly at a point in time where we see inflation going up,” Chief Financial Officer Luca Zaramella said.
Zaramella said the price of raw materials is rising, especially as it relates to cocoa.
Hershey, too, is seeing the effects of the spike in its essential ingredient. It said in a statement that its price adjustment with retail customers is not related to tariffs or trade policies but instead reflects “the reality of rising ingredient costs including the unprecedented cost of cocoa.”
Cocoa prices have skyrocketed more than 165% over the last two years.
For years, “we’ve worked hard to absorb these costs and continue to make 75% of our product portfolio available to consumers for under $4.00, ensuring that Hershey treats stay accessible and affordable for families everywhere,” the company said.
The apparel sector is also feeling the pressure and warning of price hikes. The German sportswear giant Adidas said Wednesday that it might have to raise prices, in the United States only, because of the significant impact tariffs will have on the company’s cost of U.S. goods. Adidas reported tariffs would add around 200 million euros ($231 million) in costs in the second half of this year.
“What we can say is we will not be the price leaders. We will move slowly and see what is happening in the market,” CEO Bjørn Gulden said on an earnings call.
Many more companies are also reporting dented profits due to Trump’s tariffs.
On Tuesday, Stanley Black & Decker said it expects to incur an $800 million annualized impact from policy changes that are tied to tariffs. And Conagra Brands said tariffs are likely to raise costs of goods sold by 3%, which would be an annual increase of more than $200 million, according to its CEO, Sean Connolly.
The auto industry seems to be making adjustments, as well. Elon Musk’s Tesla said costs as a result of tariffs have increased about $300 million, and General Motors said earnings before interest and taxes in this most recent quarter dropped by $1.1 billion, which it attributed to tariffs.
Ford said Wednesday that it sees up to a $3 billion impact from tariffs but expects to be able to offset $1 billion of that.
Source: “AOL AOL Money”
