'We won't be shy': How European companies are raising prices on American customers over U.S. tariffs

CNBC

01-05-2025

Luxury handbags, washing machines and jet engines are among the products about to become more expensive as a slew of European companies hike prices for American consumers in response to U.S. import tariffs. Major companies from across France, Sweden, Switzerland and Germany — among others — have revealed plans to raise prices for their U.S.-based customers to compensate for import duties. CNBC's analysis of earnings calls since U.S. President Donald Trump's April 2 so-called "Liberation Day" shows that many intend to raise prices to preserve profit margins, along with cutting costs by shifting supply chains away from China. Here's what the CEOs of several Stoxx Europe 600 companies had to say. Safran Jet engine maker Safran 's CEO said the company, which derives more than 25% of its sales from the United States, will raise prices for its airline customers, even if it is perceived as inflationary. "We will apply with tariff surcharge to the airlines and to our customers. There is no mystery," said Olivier Andriès. "At the end of the day, this tariff situation is creating inflation, so be it. We are going to impose tariff surcharge to our customers and we won't be shy." The France-headquartered company makes jet engines for Boeing MAX 737 and Airbus A320neo aircraft, which are popular with U.S. airlines, through CFM International, its 50% joint venture with General Electric. Safran said it will also begin raising prices by "mid to high-single-digit gross" to its airline customers, not including any hikes because of the tariffs. "We are confident to be able to pass through most of our net exposure," Andriès added. EssilorLuxottica Ray-Ban maker EssilorLuxottica said it will be raising prices for consumers, in addition to cutting costs, in order to maintain profit margins. "We're moving toward a price adjustment in the single-digit territory in the U.S. across the different product lines and across our distribution channel," said EssilorLuxottica CEO Stefano Grassi. The company's made-in-China sunglass frames, including the Ray-Ban Meta smart glasses that are sold in the United States, are affected by tariffs at 145%. EssilorLuxottica said it would raise prices further if needed. "And if we need to go deeper, we certainly have the ability and the agility to do so in the upcoming months," Grassi added. Air Liquide French multinational Air Liquide , which makes industrial gases, said it has "tools" and "systems" in place to raise prices to compensate for any impact from tariffs on products imported into the U.S. François Jackow, Air Liquide's chief executive, boasted on a call with analysts that the company had experience in raising prices, pointing to the 30% increase over the past four years. "When we look at pricing around gases, this is very, very clear. In a high inflationary market, we've done this in the past and we'll continue to do that going forward," said Adam Peters, vice president and chief executive of Air Liquide's North American operations. "When we look at tariff impacts and we look at what that can mean for pricing, I see it in the same way. I see it as the way to manage pricing effectively ahead of the cost curve and staying in line with that." Assa Abloy Sweden-based lockmaker Assa Abloy said it will raise prices by 10% for U.S. customers because of the tariffs. The company, which makes security doors and electronic key fobs, manufactures many of its goods in China. The company's CEO, Nico Delvaux, said the company had planned to raise prices by 1.5% before the introduction of tariffs. "If you have tariffs of 145%, you can say it's a tariff. It's almost an embargo you could say," said Delvaux. "We will increase prices. Prices will have to increase in a very significant way." "If tariffs would be like they are today, and obviously the 145% of Chinese an important contributor there, we would have to increase prices around 10% to fully compensate for tariffs and keep the margins in the US," Delvaux added. "The 10% is price increase in the US." Thule Thule , which makes cargo carriers for autos, is among a small group of European companies that manufactures more than half of the goods sold in the U.S. locally — yet it will be raising prices by 10% across all products in light of the magnitude of the tariffs. Mattias Ankarberg, CEO of Thule, told analysts that despite having two factories in the U.S., it will be affected by tariffs on raw materials, such as steel and aluminum, that it imports from elsewhere. "We do have two factories in the U.S. where we produce our most important product categories, but still we are impacted by the tariffs, directly and indirectly, and we are making price increases as of June 1 this year," said Ankarberg. "What was not manufactured in the US is imported either from Europe, which is the biggest part where we have some bike carriers are manufactured in Europe," he added. "We are now moving with the 10% price increases." Electrolux Electrolux group has a mainly North American manufacturing footprint for sales in the region. Assuming current level of import tariff on imports to the US, however, we are implementing price increases with the ambition to offset the impact of higher cost due to a tariff. Also in Latin America, our ambition is to offset currency headwinds with price. Yannick Fierling, CEO of Electrolux Group Group SEB With regards to imports from China, we have the plan to relocate the bulk of what we produce today in China to Vietnam. And that can be done, let's say, largely by the end of this year or early part of next year. And secondly, we have the ability, of course, to pass some of that impact to the final customers through price increases. Olivier Jean Casanova, senior executive vice president of finance at SEB SA Kering We are vigilant on the high level of uncertainty on it, but we would most likely adopt a careful and gradual approach, protecting our gross margin, but also mindful of consumer sentiment, which means that we could implement this support either only in the US or more globally, leveraging on seasonal adjustment and the differentiated by category and price point. Armelle Poulou, Kering CFO Sandvik Group We have put in tariff clauses and revisited our commercial agreements, where applicable. We have also notified customers and partners in several of our businesses on potential upcoming tariff surcharges. We are re-balancing product capacity, where, in some cases, we might produce today in Europe, sending to the US and vice versa, we produce something else in the US and sending to Europe. Stefan Widing, CEO of Sandvik Group LVMH I think we all need to stay very calm because we are in unknown territories and we are now in a process with 90-day suspension period, which we can hope will enable some negotiation and bring some maybe positive outcomes. The worst is never certain. Having said that, this is not under our control. So, back to what is under our control, it's – price increase is one part, but there are also some other mitigants. Cécile Cabanis, CFO of LVMH