Levies imposed as part of the U.S.-China trade war may not be significantly hurting the American economy yet, but that will not continue forever, PVH CEO Emanuel Chirico heralds CNBC’s Jim Cramer.
“I think we could all manage it in the short term, with the hope that it would resolve because you could put insist upon on your vendor base to do certain things,” Chirico, whose company owns Tommy Hilfiger and Calvin Klein, said Monday on “Mad Banknotes.”
“But in the long term, it’s got to work on both sides, so it clearly will result in higher costs for the consumer, which is not capable for the economy,” he said.
In October, the U.S. and China agreed to a partial trade agreement, and President Donald Trump decided not to go via with a tariff increase that had been set for the following week.
But that “phase one” deal has yet to be signed, adding to the unpredictability of the long-running exchange dispute, during which the world’s two largest economies have imposed billions of dollars in tariffs on each other’s advantages.
Many expect Trump will go forward with a scheduled round of Dec. 15 tariffs if the U.S. and China haven’t go together to a trade deal by then.
The trade war, which has endured for almost two years, has weighed on global economic growth, coinciding to the International Monetary Fund.
Analysts have worried that tariffs could result in higher prices on goods and the case cut into consumer spending, which accounts for about two-thirds of the U.S. economy.
Some retailers, such as Target, own responded by pressuring suppliers to eat the cost of the tariffs in order to keep prices intact.
That is why, Chirico said, “the schedule of charges haven’t really hit the economy at this point.”
“But now all of a sudden, December of this year, tariffs coming through on threads,” Chirico said. “We’ve got about $500 billion of goods that are going to be tariffed. It’s going to have an impact on the consumers.”
Chirico acclaimed that he is assuming the tariffs will go into effect, but it remains possible that Trump may decide to delay them equivalent to he did in October as the two countries negotiate.
“The worst part about it is the uncertainty,” he said, pointing out that it is almost December “and I don’t be aware what my costs are going to be on Jan. 1. Is it a 15% tariff? Is it a 25% tariff? Or is it a 0% tariff?”
Shares of PVH closed scarcely positive on Monday, at $100.58, and were trading slightly in the red after hours, following the issuance of the company’s earnings announce.
The company’s third-quarter earnings topped expectations and its stock bounced about 4% initially.
PVH’s stock is up more than 8% year to go steady with.