New Report Finds Trump Tariff Upheaval Empowers Companies to Hike Prices on Consumers

New Report Finds Trump Tariff Upheaval Empowers Companies to Hike Prices on Consumers

Today, Groundwork Collaborative released a new analysis showing how President Trump’s erratic tariff policies are providing corporations with ample opportunity to hike prices on consumers. The research — assembled from dozens of earnings calls and reports — offers multiple examples of large public companies that have publicly admitted to capitalizing on the tariff-induced market uncertainty to further squeeze families’ pocketbooks. As Trump continues to stoke uncertainty and upheaval with his on-again, off-again tariffs, the latest analysis suggests consumers can expect to keep paying higher prices on essentials.

In a paper recently published in the Journal of Structural Change and Economic Dynamics, Implicit Coordination in Sellers’ Inflation: How Cost Shocks Facilitate Price Hikes, economist Isabella Weber detailed how the economy-wide supply-side cost shocks provided an implicit coordination mechanisms for companies to raise prices, protecting or increasing profits. Groundwork was one of the first to explore and expose the link between corporate profits, pricing strategies, and inflation. Trump’s broad, indiscriminate tariffs and the economic volatility that has resulted present a similar opportunity.

Groundwork Collaborative’s Executive Director Lindsay Owens released the following statement on the report’s findings:

“President Trump’s turbulent trade policy has created a perfect storm of market chaos, giving corporations a golden opportunity to jack up prices, pad profit margins, and fleece Americans simply because they can. We already know that when inflation started to tick up, companies exploited market conditions to charge consumers more and rake in record-breaking profits. It turns out the corporate playbook on tariffs is exactly the same. While Trump’s tariffs continue to cause economic upheaval, corporations are exploiting the chaos and working families are left to foot the bill.”

KEY FINDINGS:

Today’s report includes findings from corporate earnings calls, including detailed strategies and justifications described by company executives in Q1 2025 earnings calls to jack up prices and boost profits in response to the tariffs. The examples draw from companies that operate in a range of sectors including apparel, baby products, footwear, food, retail, security products, vehicles, pool equipment, power generation, and air conditioning.

• Using tariffs as cover to raise prices:
  • Aaron P. Jagdfeld, Chief Executive Officer (CEO) of Generac Power Systems, a power generation products manufacturer, explained how vendors in the supply chain have used the tariffs as cover: “[e]ven if we have metals that weren’t impacted directly by tariffs, the indirect effect of tariffs is that it gives steel producers and the mills and other fabricators … great cover for increased pricing in some cases.”
  • Stephen Bratspies, CEO of Hanesbrand, a major apparel brand, noted that “from an opportunity standpoint,” they are already “seeing tariff-related disruptions creating incremental revenue opportunities in the market,” while remaining “confident in [their] ability to take price as necessary as a part of our broader plan to offset the tariff situation.”
• Raising prices because consumers “expect” higher prices:
  • Ralph Lauren Corporation’s CFO, Mr. Picicci, indicated that the tariffs created an exploitable expectation of higher prices: “[we’re] taking selective pricing actions and strategic discount reductions with a goal of continuing to deliver the best-value proposition for our consumers.  It’s really a consumer sentiment and the expectation that the customers have to deal with significant pricing across-the-board as a result of cost inflation.”
• Raising prices higher than the expected tariffs costs simply because they can (they have pricing power):
  • Russell Diez-Canseco, the President and CEO of Vital Farms which sells eggs, told investors: “the price we’ve talked about, that is more than sufficient to cover the impact of the tariffs. And with that, I think with the pricing power that we have, with the resilience of the business that we have, I think we’re really well positioned for this year despite the tariffs.”
  • According to Matthew Stevenson, the CEO of Holley, an auto parts manufacturer, market participants in the sector have been dramatically increasing prices: “in the marketplace we have seen price increases well in excess of what we put out into the market. I mean we’ve seen increases as high as 30 [percent] or more on some categories from some competitors.”
  • Glenn J. Chamandy, the CEO of Gildan Activewear, a clothing company that sells wholesale t-shirts and activewear, stated that higher import taxes are “not going to even more the needle” regarding profits yet announced price increases regardless: “our basic … bread and butter T-shirt is selling for $2.30. So … even if there’s a slight price increase of $2.30, it’s not going to even move the needle because by the time our products get sold … they’re selling for between $20 and $25.”
  • Lennox International, an HVAC and climate control provider, was congratulated by an analyst during its Q2 earnings call for “quote-unquote getting more price than you need,” which Lennox CEO Alok Maskar noted was possible through data collection and AI tools to set precise prices by geographies and zip codes.
  • 3M CEO Bill Brown outlined how 3M raises prices over and above its material cost hit, explaining that if 3M passes tariffs “through in price, which we’ve done, that’s 50 basis points. We’re getting about 70 basis points. So it’s a little bit of an extra lift.”
• Folding higher tariff costs into guidance assumptions for the fiscal year that underlie pricing:
  • Jim Watkins, the CFO of Boot Barn, emphasized that higher import taxes–30 percent tariff on China, 10 percent global tariff, and 0 percent on Mexico–and resulting price increases in the summer of 2025 were built into the assumptions for fiscal year 2026 guidance: “[b]oth the low and high end scenarios of our fiscal ‘26 guidance contemplate increased tariffs resulting in price increases this summer, which we believe could lead to softer consumer demand.” Boot Barn’s CFO claimed to have a goal of keeping prices “as low as [they] can”, however, the company executive also touted the “potential upside” of the built in assumptions for the second half of the year.  In other words, using the threat of tariffs as a basis for higher prices could result in higher gross profit than forecasted if the White House fails to follow through on its tariffs policies.
• Blatantly raising prices even if tariffs are paused or decreased:
  • According to Thomas Robertson, the Chief Operating Officer (COO) and CFO of Rocky Brands, the business planned to implement higher prices regardless of the Administration’s actions on China, “we certainly welcome a reduction in the Chinese tariffs, but we’ll be announcing a price increase here regardless of any changes of the Chinese tariffs over the next week or two to go into effect in June.”
• Hiding price increases throughout the supply chain:
  • Nicholas Fink, the CEO of Fortune Brands Innovations Inc, a company that manufactures home security and digital products told investors: “[w]e are price leaders and the majority of our sales are through complex channels, which allow us to more effectively pass along price increases where and as-needed.”
• Folding anticipated tariff costs into pricing for products potentially unaffected by tariffs:
  • James S. Brooks, the CEO of Rocky Brands indicated that the company would use “inventory investments pricing actions” raising prices across products in inventory to compensate for higher China tariffs: “there might be some places that if we think we can get a little bit better [pricing] there, we might take that because we can’t take that kind of price increase out of something that is still coming out of mainland China.”