SHANGHAI: China's Haier Group said rising steel prices amid hefty U.S. import tariffs was driving up costs for its business in America, and warned that consumers stood most to lose from a mounting trade spat between the world's top two economies.
Louisville, Kentucky-headquartered GE Appliances, which Haier bought in 2016 from General Electric, has already raised its prices twice this year to cope with rising costs, said Haier's overseas managing director, Li Pan.
"Currently, the challenge is inflation, not only from steel but also the other commodities," he told Reuters.
"It has hit our bottom line, not only inflation but also the whole environment is getting tougher and tougher, so to mitigate that impact, actually, GE Appliances increased their retail price twice this year."
Haier's comments add to a growing clamor of voices from companies worldwide warning about the impact of U.S. metal tariffs. Home appliance maker Whirlpool and automakers such as General Motors and Ford have all flagged that steel costs have hit, or could impact, their bottom lines.
U.S. steel prices have leapt after President Donald Trump slapped a 25 percent tariff on imports of the metal in March in a bid to protect domestic producers.
Trump has rattled the world trade order this year by seeking to renegotiate the terms of some of the United States' trading relationships, in particular with China.
Washington has recently proposed to slap a 25 percent tariff on US$200 billion worth of Chinese imports, following an earlier, initial round. China late on Friday unveiled retaliatory tariffs on US$60 billion of U.S. goods.
Haier's Li said 5 percent of GE Appliances' products sold in the United States were imported from China and added that these items, which include window air conditioners, could face U.S tariffs. The company is hopeful these products could be removed from the U.S. tariff list, Li added.
But consumers would, in the end, have to pay for any tariffs imposed, he said. "If the tariff is 20 percent we need to increase the price by 20 percent, no other choice."
GE Appliances accounts for about 30 percent of Haier's revenue, which was 159.2 billion yuan (US$23.32 billion) in 2017.
The Chinese firm, which also owns New Zealand's Fisher & Paykel, is ranked by Euromonitor to have the largest share of the global major appliances market.
Haier is also considering acquisitions in Europe where it currently only has a 2.3 percent market share, Li said, adding that the company had already shortlisted some names. He declined to provide any details but said the targets were high-end brands which could include manufacturers of built-in kitchens.
(US$1 = 6.8275 Chinese yuan)
(Reporting by Brenda Goh; Editing by Himani Sarkar)