(Bloomberg) -- Stanley Black & Decker Inc. is considering raising prices in response to higher tariffs it expects to be imposed by President-elect Donald Trump’s administration.
The toolmaker is preparing for increased tariffs “very soon” after Trump is inaugurated in January, it said in a filing Tuesday. Anticipating a 60% tariff on goods from China, the company is also assessing supply-chain adjustments to mitigate the impact, moves that could take up to two years to take effect.
Without steps to blunt the tariffs such as moving production out of China, Stanley Black & Decker said the potential tariffs could erode its pretax operating income by about $200 million a year. The toolmaker reported $15.8 billion in annual revenue in 2023.
Section 301 tariffs on Chinese imports imposed during Trump’s first term initially caused about $300 million annually in negative impact for the company, it said. That has been reduced to less than $100 million by repositioning its supply chain, according to Stanley Black & Decker, adding that price increases helped it offset the remainder.
Known for brands such as Craftsman and DeWalt, the company has a “robust plan” for moderating the impact of tariffs by moving segments of its supply chain from China to other parts of Asia and possibly Mexico, Chief Executive Officer Donald Allan Jr. said on an October earnings call. “Unlikely that we’re moving a lot back to the U.S. because it’s just not cost effective to do,” he said. “There’s questions about whether we even have the labor to actually do that in this country.”
Stanley Black & Decker’s shares fell 2.6% at 12 p.m. in New York trading Tuesday. The stock has declined about 10% in 2024, versus a 25% gain for the S&P 500 Index.
(Updates share trading and adds details)
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