Global brand warns of rising prices over Trump’s tariffs

US President Donald Trump. (Evan Vucci, AP, File)
US President Donald Trump. (Evan Vucci, AP, File)

The trade war arrived at Sun Y Park’s doorstep the day a letter from Samsonite International was delivered to her Manhattan luggage and leather goods shop.

In the letter dated August 13, Samsonite North America President Lynne Berard notified wholesale buyers that a 10% price increase is imminent if the US follows through with more tariffs on Chinese goods - a measure that’s been threatened for months and that will now take effect September 24. The levies will hit more than $3bn in luggage and travel bags that’s imported by the US from China.

US President Donald Trump pulled the trigger late on Monday evening to slap a 10% tariff on about $200bn of Chinese goods that will be hiked to 25% next year. The new levies will send the retail industry bracing for impact. While shoppers have been insulated from previous tariffs that hit prices for steel, aluminum and other goods, the new round will include more products that Americans buy directly.

“We just don’t think tariffs are the right approach,” Jon Gold, vice president of supply chain and customs policy for the National Retail Federation, said in an interview on Monday before the tariffs were announced. “There certainly is concern going forward on the impact of the tariffs: The tariffs are paid by US companies and then they’re passed onto the consumer.”

Wider scope

The wider scope of the latest tariffs means that merchandise ranging from handbags to rain gear to refrigerators are likely to start costing more for US shoppers. Suitcases, travel and sports bags will also face levies. Samsonite brands including its High Sierra backpacks and American Tourister luggage will be subject to the price hike, it said.

Samsonite is ready to act, with a price increase of 10% on new shipments starting on or after the date that tariffs go into effect, according to the letter. Increases on orders from warehoused inventories will start 30 days after that date. The company declined to comment on the letter and its pricing plans.

Park, the owner of Mitsosa Luggage in midtown Manhattan, said she will have to pass the higher prices on to consumers. She’s concerned that other brands could follow suit with their own hikes.

“It’s not good,” said Park, when asked about the higher prices. “Samsonite is a worldwide brand, so we definitely have to have it. It’s the most popular.”

‘Crazy, right?’

The uncertainty surrounding the tariffs has complicated business for consumer-goods companies such as Samsonite. In an August interview with Bloomberg, Chief Executive Officer Kyle Francis Gendreau said the company has been shifting production and diversifying from China as part of a long-term strategy unrelated to tariffs. Samsonite has said it manufactures two-thirds of its products in China.

He acknowledged that the process of anticipating potential tariffs has caused headaches both for the company and its suppliers, since it had been impossible to say when - or whether - the tariffs would go into effect.

“The whole thing is crazy, right?” he said in an interview last month. “You know, it’s there, it’s not there.”

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