Husqvarna reworking supply chain to offset tariffs, CEO says

By Jesus Calero

(Reuters) -Sweden's Husqvarna is reworking its supply chain to lessen the blow from global trade tensions as the U.S. considers steep hikes in tariffs on European imports, the company's CEO Pavel Hajman told Reuters.

Around two-thirds of Husqvarna's U.S. sales are tied to imported products, with roughly half of those coming from Europe and the rest from China and other countries.

"We are, of course, worse off because we have two-thirds being imported into the U.S., irrespective of whether it's China or Europe," Hajman said.

U.S. tariffs on EU goods currently stand at 10%, but the White House has floated the idea of raising them to as high as 30%.

Hajman said such a move would not be good for Husqvarna and urged a constructive dialogue between Washington and Brussels.

The group is increasingly concerned that Europe could be pulled deeper into Washington's trade clampdown, putting Husqvarna at risk on both its Asian and European supply routes.

To cushion the impact, Husqvarna has started shifting production of certain products out of China into its European factories.

It is also rerouting some Canada-bound goods away from U.S. distribution hubs to avoid getting caught in the crossfire from the Washington-Ottawa trade friction.

Hajman said the company is working with suppliers on price negotiations to soften the impact of tariff-related cost inflation.

The tariffs have come on top of other margin headwinds which the company is facing, including currency swings and rising raw material costs.

In response, Husqvarna implemented measures including plant closures and focusing on higher-margin products like watering systems and robotic mowers.

Husqvarna's robotic mower sales grew 15% in the quarter even as competition from emerging Chinese rivals intensifies.

(Reporting by Jesus Calero; Editing by Matt Scuffham)