Selina Jackson, the vice president of government relations and public policy for Procter & Gamble, said the latest round of tariffs on Chinese goods will impact the company's retail prices, reduce its revenues, and will force the company to employ job cuts in its entire U.S. operations.
In a letter addressed to the office of the U.S. Trade Representative, Jackson outlined the P&G's products that rely heavily on components imported from China. These products include Crest and Oral B toothpaste and toothbrushes, Downy and Bounce dryer sheets, Febreze air freshener, Braun electric shavers, and household staples like Head & Shoulders, Pantene, Olay shampoo as well as the Swiffer vacuum.
The letter was presented ahead of the new 10 percent tariff on $200 billion worth of Chinese imports.
Specifically, P&G imports the artificial sweetener called saccharin from China to make toothpaste. The letter highlighted that China is accounted for the 70 percent of saccharin produced worldwide and there is no other country that supplies the ingredient to the United States.
The brush handles used for P&G's Oral-B Pulsar battery operated vibrating toothbrush are only produced in China. The tariffs will compel the company to increase its prices on these products.
With regard to Febreze, only China supplies the wall-plug-in technology but this is included in the tariffs imposed on products used in preparation for perfuming and deodorizing rooms. P&G stressed that there is no U.S. company that can develop the technology. Furthermore, if P&G would source the technology anywhere else, it would take about 18 months to two years for the company to acquire similar wall-plug-in equipment.
The letter also stated that raw materials that P&G used for Downy and Bounce dryer sheets were also subjected to the tariffs. There is only one U.S. supplier of said raw materials and it could no longer accommodate additional orders for P&G.
As for the Swiffer, the entire product is made in China and P&G would need about 18 months to two years to source the components and entire manufacture from elsewhere, the letter stated.
Finally, the plastic hand pumps used for the bottles of Head & Shoulders, Olay, and Pantene are all made in China. These hand pumps are also the main components of P&G's liquid soaps, body lotions, and liquid detergents.
If P&G continues to produce these products with the tariffs in place, this could compel the company to implement price hikes which in return will slow demands. When demands are low, the next step for the company is to cut its workers. The letter mentioned that P&G currently employs 25,000 workers in the United States across its 25 factories located in 19 states.
P&G is currently at the middle of hiring and constructing its new plant in West Virginia and the majority of the equipment used in the building's construction, like tanks, pipes, and containers, are coming from China. The tariffs will push P&G to increase its budget for the factory which is originally set at $500 million. The facility is also aiming to employ 1,800 people.
