Wilbur Ross needs another prop, Campbell says tariffs will make soup cans more expensive
Commerce Secretary Wilbur Ross used a can of Campbell's Soup as a prop to defend the new steel tariff plan.
Earlier, the soup company told CNBC the plan will result in higher prices.
President Donald Trump said Thursday the United States will impose new tariffs on steel and aluminum as early as next week.
Commerce Secretary Wilbur Ross told CNBC on Friday that President Donald Trump tariffs are "no big deal," and he used a can of Campbell's Soup as a prop to defend their minimal impact.
"In a can of Campbell's Soup, there are about 2.6 pennies worth of steel. So if that goes up by 25 percent, that's about six-tenths of 1 cent on the price on a can of Campbell's soup," Ross argued. "I just bought this can today at a 7-Eleven ... and it priced at a $1.99. Who in the world is going to be too bothered?"
In a statement provided to CNBC earlier Friday about the tariffs, though, a Campbell spokesperson noted its impact on the company's costs.
"Any new broad-based tariffs on imported tin plate steel — an insufficient amount of which is produced in the U.S. — will result in higher prices on one of the safest and more affordable parts of the food supply."
When the costs of a company's business become more expensive, it can react by raising prices for shoppers or allowing those increased costs to chip into profits. But retailers like Walmart and Amazon are putting pressure on food companies to lower prices, and today's generation of food shoppers cares more about price than they do brand.
Trump said Thursday the United States will impose new tariffs on steel and aluminum as early as next week. If it's enacted, industries from agriculture to motorcycles, many of which rely on aluminum to make their products, will be affected.
Campbell Soup CPB , which has heavy use of steel in its soup cans, will be among the food companies hurt the most, according to analysts at Credit Suisse.
Other companies that could be affected by the tariff include Kraft-Heinz KHC , General Mills GIS and Hershey HSY , the analyst note said.
Increased costs for Campbell would come at an inopportune time for the soup company, which has been grappling with slowing sales and dealing with hard-bargaining retailers. This year Campbell is faced with integrating its $4.87 billion acquisition of snacks company Snyder's-Lance LNCE , the largest ever deal in the soup company's 148-year history.
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