Brace Yourself: Prices on Everyday Goods Set to Rise as Tariffs Take Their Toll

U.S. President Donald Trump is moving forward with his tariffs, and companies are making their response clear—they plan to pass the costs on to American consumers.

Throughout spring, major retailers and consumer goods manufacturers cautioned that levies on imported items would strain their operations, forcing a choice between reduced profits and higher prices for customers.

For Procter & Gamble and others, it’s turning out to be both.

On Tuesday, the consumer goods giant, known for household staples like Bounty paper towels and Tide detergent, issued a gloomy outlook for 2025. The company also notified major retailers such as Walmart that it would need to raise prices on certain U.S. products starting next week.

This looming challenge for companies in the coming quarters is likely to impact everyday consumers. Procter & Gamble announced plans to increase prices on about a quarter of its U.S. products to offset costs from the new tariffs.

A company spokesperson stated that price hikes would be in the mid-single digits across various categories.

While U.S. stock indexes have soared to record highs this year, buoyed by massive investments in tech shares, many consumer staples companies have struggled.

Since Trump’s April 2 Liberation Day tariff announcements, Procter & Gamble shares have fallen 19%, Nestle is down 20%, Kimberly-Clark has lost 11%, and PepsiCo has dropped nearly 7%. Meanwhile, the benchmark S&P 500 stock index has gained over 13%.

Consumer goods, food, and beverage companies have grappled with sluggish sales since the pandemic, as shoppers have balked at paying more for increasingly expensive name-brand packaged foods. Nestle reported last week that North American consumers remain hesitant to spend more at checkout.

Further price hikes are likely to intensify investor concerns about how major brands are navigating the dual challenges of thrifty consumers and rising costs stemming from Trump’s trade war.

“You’re going to see companies like Walmart, Amazon, and Best Buy forced to pass price increases on to consumers,” said Bill George, former chairman and CEO of Medtronic and executive education fellow at Harvard Business School.

“Main Street has yet to feel the full impact of increased tariffs—and they’re set to go even higher.”

Between July 16 and 25, companies tracked by Reuters’ global tariff tracker projected combined losses of $7.1 billion to $8.3 billion for the full year.

General Motors, Ford, and other automakers have absorbed the cost of tariffs—totaling billions of dollars—so far.

Many companies rushed to import more goods and raw materials into the U.S. before tariffs took effect. Economists and analysts believe this stockpiling has allowed some to delay price increases until later in the year, explaining why tariffs haven’t yet shown up in U.S. inflation data.

Andrew Wilson, deputy secretary general of the International Chamber of Commerce, estimates that inflation will become noticeable once companies exhaust their inventories, likely in the fourth quarter of this year or the first quarter of next year.

Some companies, like Ray-Ban maker EssilorLuxottica, have already implemented price increases.

Swiss watch and jewelry maker Swatch raised prices by about 5% after Trump’s April tariff announcement, with no impact on sales, CEO Nick Hayek recently told Reuters.

High-end brands like Tissot watches are less sensitive to price increases. Hayek noted that customers looking to splurge on an expensive watch might also buy abroad while traveling, where taxes are lower.

“You can’t do this with cars. You can’t do this with machines. But you can do this with watches. So it’s not as problematic for us,” he said. (Reuters)