New Britain toolmaker Stanley Black & Decker announced details of its plan to mitigate higher costs from tariffs in a notice filed with the U.S. Securities and Exchange Commission Tuesday morning. Stanley’s President and CEO Donald J. Allan Jr. announced, during a call with shareholders last week, that the company may increase prices and relocate […]
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New Britain toolmaker Stanley Black & Decker announced details of its plan to mitigate higher costs from tariffs in a notice filed with the U.S. Securities and Exchange Commission Tuesday morning.
Stanley’s President and CEO Donald J. Allan Jr. announced, during a call with shareholders last week, that the company may increase prices and relocate production facilities if President-elect Donald J. Trump imposes additional tariffs on global trade.
Trump said on the campaign trail that he intends to propose a 60% tariff on goods produced in China.
While it’s unclear how quickly Trump could enact higher tariffs after he takes office on Jan. 20, 2025, Stanley is bracing for the potential impacts.
The proposed 60% tariff would cost Stanley about $200 million annually, without any new mitigation actions, according to Tuesday’s filing.
The company is “preparing to discuss potential price increases with its customers, has begun assessing supply chain adjustments based on current U.S. trade-related rules and regulations, and intends to continue its direct engagement with policymakers,” the filing states.
Stanley believes that supply chain adjustments would take 12 to 24 months to neutralize the potential tariffs.
Last week, Allan, the CEO, said Stanley may move production from China to other parts of Asia and Mexico. The company has about 50 production facilities overseas.
Also, Tuesday’s filing states that the new tariffs might “alter the path” to Stanley’s goals of attaining mid-single digit sales growth and adjusted gross margins of 35% or higher.
In 2018, during Trump’s previous administration, the U.S. government imposed a tariff of 25% on Chinese imports, which remains in effect.
Stanley said the increased cost of goods imported from China during 2017 and 2018 would have cost the company more than $300 million a year, without mitigation measures.
However, the company limited its exposure by taking “supply chain repositioning actions” and raising prices for customers. With those mitigation measures in place, the 2018 tariff cost the company less than $100 million annually, it said.
On Tuesday afternoon, Stanley’s Chief Financial Officer Patrick D. Hallinan is scheduled to present information about the company’s plans to address the potential tariff impacts in a presentation at the Baird 2024 Global Industrial Conference in Chicago.
Stanley Black & Decker’s stock price was down about 2% to $88.32 in early morning trading on Tuesday. The company’s stock price on Election Day, Nov. 5, opened at $93.81. It was down nearly 6% from that price Tuesday morning.
Stanley is among several U.S. companies that have warned of price increases if Trump’s tariff plan is implemented. Others include auto parts company AutoZone and Columbia Sportswear, according to Business Insider.
Company executives said tariff costs will be passed onto consumers and could result in a trade war.
