The Week in GRC: Companies scramble to adjust to Trump's tariffs

-Chinese e-commerce giants Temu and Shein say that they will be raising their extremely cheap prices for US customers as of next week, according to the Associated Press. The increase is in response to US President Donald Trump’s tariffs of up to 145 percent on goods from China.   

While Temu is publicly traded in the US under its parent company PDD Holdings, Shein is not, after a failed IPO in the US. 

Nearly identical statements posted on their sites read: ‘Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025.’ 

-Aluminum producer Alcoa has said that Trump’s tariffs have added up to $20 mn in costs for them so far, reports the Wall Street Journal (paywall).  

The Pittsburgh company produces most of its aluminum in Canada, which it then imports to the US. That $20 mn price tag is expected to increase to $90 mn within the quarter, according to its CEO William Oplinger.  

Despite this, Alcoa has no plans to move more production to the US, which Trump claims was the goal of his tariffs.  

Oplinger said: ‘Until additional smelting capacity is built in the US, the most efficient aluminum supply chain is Canadian aluminum flowing into the US.’ 

-The Wall Street Journal reports (paywall) that luxury brand Hermes has announced that it will raise prices on its designer goods – including the infamous Birkin bag – in anticipation of the fallout from Trump’s tariffs.  

In a call with analysts, its vice president of finance Eric du Halgouet remarked: ‘We haven’t seen any impact, but we remain very conservative.’ 

The company’s first quarter sales grew 7.2 percent (adjusted for inflation), a marked decrease from 18 percent sales growth from the quarter before. 

Those numbers make them the world’s most valuable luxury brand, after LVMH reported sales for the first quarter that were lower than expected this week. 

-The automotive industry has not been spared from the tariff fallout, with Nissan looking to ‘max out’ production at their American plant, reports CNBC.  

The chairman of Nissan America’s Christian Meunier said: ‘We have big facilities, big capacities and today we don’t have max capacity. We still have more room to improve our capacity. We’re looking into selling more of the US products, and adjusting, along the way, vehicles that are coming from Mexico and from Japan.’ 

According to Meunier, Nissan will eventually double production at its Smyrna, Tennessee plant. This year it built 314,600 vehicles; it is capable of producing 640,000. 

On Monday, Trump said that he was looking to ‘help some of the car companies,’ which currently face 25 percent auto tariffs. 

-Honda has confirmed plans to move some production to the US, Bloomberg reports (paywall). Its hybrid Civic model will now be produced at Honda’s Indiana plant, moving from its current location in Japan’s Saitama prefecture.  

‘The decision was made based on external factors including the Trump administration’s tariffs,’ a spokesperson said. 

The US is the largest sales market for the Japanese automaker.  

The move is, once again, in response to Trump’s tariffs. The 25 percent tax took effect April 3, with tariffs for car parts meant to start 30 days later. 

-According to a survey by Bank of America, global investors have dropped US stocks in record numbers in the past two months, with no signs of abating. Reuters reports that BofA polled 164 investors with a total of $386 bn of assets.  

Forty-two percent of respondents said that they expected a global recession, with 61 percent reporting that they expected the dollar to further depreciate over the coming year.  

Seventy-six percent said that ‘US exceptionalism’ has peaked.