Campbell Soup: Steel tariffs will weigh on company’s bottom line

Wilbur Ross on tariffs: People are exaggerating the price increase

U.S. Commerce Secretary Wilbur Ross on the Trump administration's plans to impose tariffs on aluminum and steel and the state of the markets.

Campbell Soup executives warned Friday that they expect rising production costs from Trump administration tariffs on steel and aluminum.

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Shares plummeted on weak quarterly results. The canned-goods producer posted a loss of $393 million for its third quarter and said it expected profit to decline 5% to 6% for the full year.

Campbell CEO Denise Morrison has left the company effective immediately, and Campbell is set to conduct a strategic review of its business.

Chief Financial Officer Anthony DiSilvestro said President Donald Trump’s tariffs on trade with China will weigh on future results. Earlier this year, the administration imposed a 25% levy on steel imports and a 10% tariff on aluminum.

“The issue is primarily one of cost inflation, and we’re seeing and expecting an acceleration on the rate of inflation across a number of ingredient and packaging items,” DiSilvestro said on a call with analysts. “For example, we expect double-digit increases on steel and aluminum. A lot of that is driven or all of it’s driven by the impact of anticipated tariffs.”

Campbell Soup shares fell more than 12% on the weak results and settled at $34.37 at the close of markets on Friday.

Commerce Secretary Wilbur Ross defended the tariffs in a FOX Business interview with Stuart Varney in March, arguing that the levies would have a minimal impact on companies such as Campbell.

“I just bought a can of Campbell Soup today at the 7-Eleven,” Ross said, while holding up the can on camera. “It was $1.99 for the can. There’s about 3 cents worth of tin plate steel in this can. So if it goes up 25%, that’s a tiny fraction of one penny. That’s not a noticeable thing.”

Several U.S. industries pushed back on Ross’s assertion at the time. The Can Manufacturers Institute, a trade association, said a 1 cent tariff would amount to a $1.1 billion tax on consumers, The Associated Press reported.

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