Procter & Gamble CEO David Taylor worries about the long-term damage the global trade war will have on consumer behavior and spending.
“What I worry most about with the trade war is it destroys consumers’ confidence in American brands,” Taylor told CNBC’s Sara Eisen in an interview aired Friday on “Squawk on the Street.”
Rising commodity costs have already forced the company to raise prices on Pampers diapers, Bounty paper towels, Charmin toilet paper and Puffs tissues in recent months, and the trade war isn’t helping.
“It’s not good. I believe, and our company believes, in free and open trade. We think that raises all boats,” Taylor said. “It’d be good for the global economy, good for our country, good for China for a productive and constructive resolution of this.”
The maker of everyday household goods like Tide laundry detergent, Crest toothpaste and Charmin toilet paper said in early October that tariffs on products sent to Canada were hurting the company. P&G successfully obtained an exemption from paying steel tariffs on its Gillette and Venus brand razor blades after arguing against the tariffs in a letter to the U.S. Trade Representative.
“Higher costs from tariffs may also translate into higher prices, reduce P&G sales, and undermine American jobs in P&G U.S .operations.” P&G lobbyist Selina Jackson wrote.
Procter & Gamble tends to manufacture close to its customer base, so its products intended for Chinese buyers are typically made in China and products for American buyers are mostly made in the U.S..
The sprawling consumer products company separately announced plans to simplify its operations Thursday.
The announcement comes after activist investor Nelson Peltz joined the board in March following a vigorous proxy battle. Peltz had previously pushed for a simplified structure, saying it would improve accountability, agility and responsiveness to local needs.
Shares of P&G have jumped by more than 29 percent since hitting a 52-week low of $70.73 a share in May, giving it a market value of $227.6 billion. They closed at $91.36 a share Thursday and were about flat in aftermarket trading.
As part of P&G’s new business structure, the company will now have six sector business units organized by industry. Each business will have a unit “CEO” responsible for running all major decisions, like marketing, costs and supply chain.
CNBC’s
Lauren Hirsch
contributed to this article.
This story is developing. Check back for updates.
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