Apparently, Edgewell Personal Care, which owns Hawaii Tropic, is attempting to strike long-term deals with its Chinese suppliers in an effort to control costs ahead of proposed tariff hikes. This is amid the incoming administration of former President Donald Trump’s proposal to slap 60% tariffs on goods from China.
According to a report, the firm’s procurement team is reportedly negotiating with suppliers in China for two to three years agreements. The company wants to safeguard its raw material prices ahead of the aforementioned tariff hike. Edgewell hopes that in this manner, the impact on its consumer products from new costs will be minimized. Those items would likely see significant price hike due to higher tariffs.
Dan Sullivan, Edgewell Personal Care’s COO explained that the company’s approach is based on not finding any good alternatives in accessing these raw materials. “There is no reliable alternate supply,” Sullivan said Reuters, in reflection of its difficulty to access other sources for these key materials used in making its personal care products in sheer number. Locking in the prices will now help minimize the financial load on consumers while helping Edgewell’s bottom line with the evolving tariff landscape.
The affected tariffs are only part of an escalating trade war between the United States and China, whose judgments have levied increasing duties on everything from ketchup to coffee machines. If applied, the tariffs would dramatically inflate the costs of goods supplied by Chinese vendors, passing the added costs directly on to consumers of Edgewell and similar companies.
Edgewell Personal Care
This proactive move by Edgewell is designed to acquire some form of cost certainty in what otherwise would be a highly volatile trade environment. In anticipation of further escalations in trade tensions and even more tariffs from the new administration, companies across several industries are taking proactive measures to safeguard their supply chains and control more-rising costs, particularly materials coming from China.
Locking in contracts with its Chinese suppliers is one specific advantage that Edgewell has managed to gain, which illustrates the broader trend in the personal care and consumer goods industry; companies are looking for their way through the intricacies of global trade dynamics in a climate where politics seems uncertain.
