Procter & Gamble Gets Steel Tariff Exemption For Razor Brands Gillette, Venus
Procter & Gamble announced on Tuesday that the US government has given the company an exemption from paying the tariffs on imported steel used for the manufacture of its razor blade brands, Gillette and Venus.
The report from CNBC cited the press release coming from the US Department of Commerce which says that the decision comes nearly four months after P&G's biggest rival in the grooming business, Edgewell Personal CareCo, received the same exemption from the Trump admin.
Edgewell, the company who also owns Wilkinson Sword and makes Schick razors, filed for an exemption in March.
In a statement made by P&G spokesperson Damon Jones, a separate report from CNBC said that this latest decision from the government does have a financial impact to the company although they still couldn't disclose more specific information about it yet.
Gillette and Venus are two of the biggest brands in personal care and grooming, which further accounted for 10 percent of P&G's global net sales in the first half of this fiscal year.
Jones reiterated the importance of the exemption, while it isn't really market-moving, as he said, it still holds a significant advantage for the business especially the stiff competition it is facing with Edgewell and others.
The Cincinnati, Ohio-headquartered company has been struggling with the rising prices of raw materials, in this case, steel. There's also the undeniable increase of transportation costs which it chose to shoulder rather than to pass it to its consumers.
Behind all these, P&G's personal care unit opted to cut back on prices on its grooming products in hopes to claiming back its share in the market against startup brands like the Dollar Shave Club and Harry's.
Trump's Tariff On Steel
As indicated over at Biz Journals, President Donald Trump issued a policy back in June which seeks to impose 25 percent tariffs on imports of steel products coming from certain countries including that of the European Union.
Moreover, the Oval Office in May placed 10 percent additional duties, which is a tad lower than the latter, on certain aluminum products shipped from Canada.
In turn, Canada implemented surtaxes on USD$12.6 billion worth of US products, including a variety of P&G products sold in the country.
Like P&G and Edgewell, home-grown manufacturers made it clear that the US steel industry couldn't possibly answer to the surging demand of high-grade steel required to make precision razor blades.
In response, the Trump admin obliged companies to shell out more capital for the importation of such raw materials or seek exemptions.