Verizon CEO says consumers will bear brunt of expected phone tariffs
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Verizon signaled Tuesday that consumers would face price increases on phones from President Trump's tariffs, becoming the latest in a drumbeat of companies indicating that price hikes are on the way.
Why it matters: Tariffs cause the cost of imports to rise — and many companies are facing decisions on whether to take a hit to profits or pass those costs along to customers.
Driving the news: Verizon CEO Hans Vestberg told investors on a conference call that the tariffs on the table today would be too much for the telecommunications company to absorb.
- "We are not planning to cover that" if the tariffs are "as high as they say on the handset," he said. "That's just not going to be possible."
- He added that the company will maintain "financial discipline" on promotions and said the tariffs are "ultimately going to hit the consumer in the market" if they remain in effect.
The big picture: Companies that sell apparel, luxury goods, electronics and imported vehicles are among those that are facing significant increases in costs.
- Chinese low-cost retailers Temu and Shein told customers that they plan to raise prices this week due to the tariffs.
- Luxury goods maker Hermès plans to raise prices on items sold in the U.S. to make up for the cost of President Trump's tariffs beginning May 1, executive VP of finance Eric du Halgouët said last week on an earnings call.
- New-vehicle prices are widely expected to jump by at least several thousand dollars, depending on the model.
Yes, but: Many businesses are pursuing alternatives, such as getting products from different sources.
- Kimberly-Clark, which makes Kleenex tissues and Huggies diapers, is "resourcing ... where we're making product and where we're shipping it from," CEO Michael Hsu said Tuesday on an earnings call. Executives suggested the company can creatively work around the tariffs.
- Walmart CEO Doug McMillon told reporters earlier this month that the retailer has "adjusted country of origin" on some products but acknowledged that the company is "not immune to some of the effects" of the tariffs.
- Multiple automakers are reportedly considering plans to shift more production to the U.S.
The bottom line: The consumer impact from the trade war is starting to unfold.
