Price hike wave incoming! Multiple enterprise CEOs warn: tariffs and raw material costs will be passed on to consumers

CEOs of multiple global companies recently warned that prices of various consumer goods, including KitKat, diapers, and cars, will rise. In order to cope with high tariffs and raw material costs, companies have no choice but to pass on some of the costs to consumers, which will inevitably cause a new round of shocks to global consumer demand and intensify inflation risks. This wave of price increases not only puts pressure on consumers' wallets but also poses a political challenge to US President Trump and other world leaders. Trump has been downplaying the impact of the trade war, but multiple data and actions by companies show that reality is far from as easy as he depicts. Household product giant Procter & Gamble Company (PG.US) estimated in its latest financial report that the tariffs in effect and upcoming could increase its annual costs by $1-1.5 billion. The company's CEO Jon Moeller bluntly stated in an interview, "Tariffs are essentially inflationary factors." Procter & Gamble Company has planned to increase prices on its products to partially offset cost pressures. JPMorgan analyst Andrea Teixeira pointed out in a conference call that in order to cope with the impact of tariffs, Procter & Gamble Company may need to increase average prices by 1-2%. The company's CFO Jon Moeller agreed, but noted that the specific price increases would vary depending on product type, brand positioning, sales region, and raw material source. Unilever PLC Sponsored ADR (UL.US) and Nestle (NSRGY.US) have already started raising prices on some products to cope with rising raw material costs. Nestle CEO Laurent Freixe admitted that if tariffs continue to push costs up, the company will further raise prices. "We will cover costs as much as possible through price increases, but we will also closely monitor consumer reactions in a competitive market." PepsiCo, Inc. (PEP.US), on the other hand, chose a different strategy: launching "value versions" of some popular products to attract customers with weakened purchasing power. However, this usually means downsizing product specifications, which essentially still leads to price increases. In the auto industry, Ford (F.US) has already announced that if Trump does not fulfill his promise to exempt the auto industry from tariffs, the company will increase factory prices for new cars starting next month. In contrast, Hyundai Motor Company in Korea is more cautious. Its CEO Jose Munoz stated that although the company expects prices to gradually rise, it is willing to bear some of the tariffs in the short term in order to maintain or expand market share, seizing opportunities when other car manufacturers raise prices or exit unprofitable markets. Faced with uncertainty, some companies choose to postpone price increases. Hal Lawton, CEO of Tractor Supply, a chain of agricultural product retailers, stated that while some suppliers have raised supply prices, the company will not pass them on to consumers temporarily to avoid dampening demand. "The current uncertainty is too great. Once the situation becomes clearer, we will engage in more in-depth discussions with suppliers and the entire supply chain." Economists generally expect that the Trump administration's increased tariffs will bring new inflationary pressures. Federal Reserve officials are also closely monitoring price trends to prevent short-term shocks from evolving into long-term inflation. Federal Reserve Board member Waller said in an interview on Thursday that he believes the current inflationary impact is temporary, but some of his colleagues hold a more cautious attitude. At the same time, US consumer confidence is also being affected. The latest survey by the University of Michigan shows that consumers' short-term and long-term inflation expectations have reached highs not seen in decades. Another survey by the New York Fed also shows that the public's expectations for inflation in the next year have significantly increased, despite remaining stable for prices three to five years out. US retail sales data for March showed a slight increase in spending on big-ticket items such as cars and electronics, possibly due to consumers buying early to avoid tariffs. However, economists generally believe that as prices continue to rise and the job market remains weak, US consumer spending will gradually slow down, further exacerbating concerns of an economic recession. Despite warnings from businesses and consumers, Trump himself is trying to downplay the negative impact. He posted on Truth Social on Thursday, "As I said, gasoline and grocery prices have fallen significantly." However, the actual operations of companies and market feedback seem to indicate that the situation is not as optimistic as portrayed. As the dark shadow of global inflation lingers, a new wave of price increases has quietly arrived, and global consumers may have to prepare for a more "expensive" lifestyle.