As the 'tariff war' triggered by U.S. President Donald Trump intensifies, the conflict between the United States and Canada has also affected the Swiss chocolate brand Lindt.
On the 4th (local time), Yonhap News, citing Fox Business, reported that the Swiss chocolate manufacturer 'Lindt & Spr?ngli' (hereafter Lindt) has been producing the chocolate products sold in Canada half in the U.S. and half in Europe, but may soon import all of them from Europe.
Canada is one of Lindt's top ten major markets, and currently, five factories in the U.S. produce products for both U.S. sales and exports to Canada. This measure was taken to prevent the sale of chocolates produced in the U.S. from being disrupted in Canada due to the tariff war.
Starting from the 4th, President Trump imposed tariffs of 25% on products imported from Canada and Mexico, and 20% on those from China. In response, Canada retaliated. Canadian Prime Minister Justin Trudeau announced on the same day that a 25% tariff would be immediately imposed on U.S. products worth 30 billion Canadian dollars (approximately 30 trillion won). As a result, Lindt chocolates produced in the U.S. are expected to be hit by Canada's retaliatory tariffs.
Adalbert Lechner, CEO of Lindt, told major foreign media, "We can source all the quantities supplied to Canada entirely from Europe." Martin Hug, CFO, explained, "Transportation costs will increase, but the costs due to tariffs will be higher." Additionally, CFO Hug said, "Chocolate products produced in Europe may face less consumer backlash in Canada compared to U.S.-made products." Earlier, after President Trump's tariff announcement, a boycott of U.S. products occurred in Canada.
Despite measures to avoid the tariff war, CFO Hug stated that chocolate prices are expected to rise this year due to record-high cocoa prices. The price of cocoa, the raw material for chocolate, has tripled over the past two years, reaching a 50-year high last December. Fox Business reported that despite product price increases, Lindt's annual sales grew by 7.8% last year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
