As trade war intensifies, Reckitt may be more exposed than some rivals

By Richa Naidu

LONDON (Reuters) - Some investors fearfulness Reckitt whitethorn beryllium forced to rise its prices successful the United States oregon look higher costs arsenic its debased manufacturing capableness determination compared to immoderate rivals leaves the institution much exposed to caller U.S. tariffs connected imports from Mexico.

Reckitt, which makes Lysol cleaning products and Durex condoms, has 5 factories successful the United States. It told Reuters successful aboriginal March that it manufactures astir 57% of its U.S. income volumes locally, with the different 43% coming from places including Mexico and Southeast Asia.

"We, of course, person been paying attraction to what's happening with the taxable of tariffs," Reckitt CEO Kris Licht said. "It's precise hard to accidental astatine this moment, what really volition beryllium the tariffs that we volition beryllium operating with."

Licht said Reckitt, whose large rivals successful the U.S. user goods marketplace see Haleon and Unilever, had not yet discussed the caller levies with U.S. President Donald Trump's administration.

Trump imposed caller 25% tariffs connected imports from Mexico and Canada successful aboriginal March, on with caller duties connected Chinese goods.

The menace of levies connected overseas imports has dominated firm America's discussions this year, and large retailers specified arsenic Target and Best Buy person said they expect tariffs to summation prices, hurting already cautious consumers.

Some companies person taken a wait-and-see attack connected investments and strategies to mitigate harm arsenic Trump has altered his plans for tariffs respective times since re-taking office.

Licht said Reckitt, whose products besides see Mucinex acold and flu medication, imports immoderate over-the-counter products from Mexico and immoderate condoms from Southeast Asia. He added that helium hoped healthcare products would not beryllium taxable to tariffs. North America accounts for astir 32% of Reckitt's full revenue.

"We're conscionable going to spot what's happening here. It's precise dynamic and successful the meantime, we've been making investments successful our American proviso chain," Licht said, noting that Reckitt does not import products from Canada and ships successful precise small from China.

In December, Reckitt said it had acquired a pharmaceutical tract successful Wilson, North Carolina, to nutrient Mucinex tablets and liquids. Licht told Reuters, however, that these plans had been successful spot anterior to the tariff announcement.

When the North Carolina mill comes online successful 2027, the percent of income manufactured locally could emergence to 75%, Reckitt said.

Consumer companies person been forced successful caller years to take betwixt protecting margins and salvaging income volumes that were battered during a planetary cost-of-living situation pursuing COVID-19 and Russia's penetration of Ukraine.