As if the tariffs on imported raw materials from China has not impacted the cookware industry enough in the past few years, there is a potential new tariff that could continue to impact the U.S. cookware market.
The tariff stems from a French tax on technology giants, like Facebook, Amazon and Google, as the companies do a heavy amount of e-commerce business in France with very little tax obligations, which has turned to lost income for the country. This, in turn, incited the Trump Administration to retaliate with the threat of hefty tariffs— potentially up to 100%— on French products including wine, cheeses, handbags, porcelain and cookware.
While the government may see these taxes on goods as a bargaining chip, of sorts, the real impact will not resonate the way the U.S. government perceives it will, according to several cast enamel cookware manufacturers. And, according to those vendors, it is the American cookware market, from product to labor, that will suffer the most from these retaliatory tariffs against French imports.
“Le Creuset has not been French owned since 1988. The proposed tariffs on enameled cookware would be offset by price increases, making our products extremely expensive. The impact to the companies that sell our products, many of whom are independent local cookware stores around the country, would be meaningful. As with any business, when revenue becomes challenged, hiring is difficult and we would be no different,” said Christopher Scinto, vp/marketing, Le Creuset.
Additionally, Faye Gooding, past CEO of Le Creuset Americas, who left her post in 2019, said “The reality is that a 100% tariff on Le Creuset products misses the mark in France and is an existential threat to the company’s very existence in South Carolina [where the company has its U.S. headquarters],” in her testimony to the International Trade Commission. “The burden of… the tariff aimed at enameled cast-iron products would fall on Le Creuset of America, its employees, its small business partners and retail shop owners and operators in South Carolina and across America.”
Joanna Rosenberg, chief marketing officer of Staub, part of the Zwilling J.A. Henckels family of brands, also explained that the tariff would harm the area in which the company’s U.S. headquarters is based, resulting in layoffs and reduced compensation for tax-paying U.S. employees.
However, said Rosenberg, these tariffs would also have a resounding effect on the country’s economic environment, which may not have been taken into consideration from those outside the industry.
“[The tax] would actually disproportionally harm Americans, consumers, workers, retailers and restaurants,” she said in her testimony to the International Trade Commission. “American retailers and consumers will suffer. Consumers will likely see significant increases to retails on products that they love, putting them out of reach. And American retailers, traditional retailers like Williams Sonoma, Bed Bath & Beyond and Macy’s, will see retails increase and sales significantly decrease.”
While the French government has seemingly pushed pause on collecting these taxes until the end of 2020, the threat has not completely gone away. However, companies that may potentially be impacted by these tariffs now have time to watch and monitor the market, as well as put contingency plans into place.