Published by Global Banking & Finance Review®
Posted on March 17, 2025
4 min readLast updated: January 24, 2026
Add as preferred source on GoogleReckitt may face increased costs or price hikes due to US tariffs, with only 57% of its US sales manufactured locally, making it more exposed than rivals.
By Richa Naidu
LONDON (Reuters) - Some investors fear Reckitt may be forced to raise its prices in the United States or face higher costs as its low manufacturing capacity there compared to some rivals leaves the company more exposed to new U.S. tariffs on imports from Mexico.
Reckitt, which makes Lysol cleaning products and Durex condoms, has five factories in the United States. It told Reuters in early March that it manufactures about 57% of its U.S. sales volumes locally, with the other 43% coming from places including Mexico and Southeast Asia.
"We, of course, have been paying attention to what's happening with the topic of tariffs," Reckitt CEO Kris Licht said. "It's very difficult to say at this moment, what actually will be the tariffs that we will be operating with."
Licht said Reckitt, whose major rivals in the U.S. consumer goods market include Haleon and Unilever, had not yet discussed the new levies with U.S. President Donald Trump's administration.
Trump imposed new 25% tariffs on imports from Mexico and Canada in early March, along with new duties on Chinese goods.
The threat of levies on foreign imports has dominated corporate America's discussions this year, and major retailers such as Target and Best Buy have said they expect tariffs to increase prices, hurting already cautious consumers.
Some companies have taken a wait-and-see approach on investments and strategies to mitigate damage as Trump has altered his plans for tariffs several times since re-taking office.
Licht said Reckitt, whose products also include Mucinex cold and flu medication, imports some over-the-counter products from Mexico and some condoms from Southeast Asia. He added that he hoped healthcare products would not be subject to tariffs. North America accounts for about 32% of Reckitt's total revenue.
"We're just going to see what's happening here. It's very dynamic and in the meantime, we've been making investments in our American supply chain," Licht said, noting that Reckitt does not import products from Canada and ships in very little from China.
In December, Reckitt said it had acquired a pharmaceutical site in Wilson, North Carolina, to produce Mucinex tablets and liquids. Licht told Reuters, however, that these plans had been in place prior to the tariff announcement.
When the North Carolina factory comes online in 2027, the percentage of sales manufactured locally could rise to 75%, Reckitt said.
Consumer companies have been forced in recent years to choose between protecting margins and salvaging sales volumes that were battered during a global cost-of-living crisis following COVID-19 and Russia's invasion of Ukraine.
Reckitt being in the firing line of Trump's incoming tariffs could mean it either has to absorb the higher costs and risk margins, or raise prices and alienate American shoppers and drive up inflation.
'WE HAVE PRICING POWER'
Licht said on a March 6 call with investors to discuss earnings that Reckitt would "look at these tariffs, whatever they turn out to be, and we will have a number of levers to mitigate the impact."
Licht noted that Reckitt posted a full-year adjusted operating profit margin of 24.5%, which is significantly higher than those of peers like Unilever and Nestle, and said: "obviously we have pricing power, as we've shown over the past years, if it comes to that. But I think it's premature for us to say anything quantitative because it changes every day."
"I suspect Reckitt will try to pass this on in higher prices," said Tineke Frikkee, a portfolio manager at Reckitt and Unilever shareholder Waverton Investment Management. "Potentially a disadvantage if directly competing companies do not."
"If Reckitt manufactures U.S. products in Mexico, Canada, UK, Europe or China then these could be impacted," she said.
Meanwhile, rival Haleon, which makes Advil, Night Nurse and Panadol, told Reuters in late February that most of Haleon's U.S. supplies are produced domestically, and that the company had "very little to no" exposure to China and Mexico.
Similarly, Britain's Unilever and Swiss Nestle have over the years "nearshored" their U.S. supply chains to the degree that they say they now ship very little into the country. More than 90% of the products Nestle sells in the United States are made locally, the company said, and Unilever, too, has said "almost everything" it sells in the United States is made locally.
"It is probably preferable to focus on companies with a U.S.-centric supply chain amid this uncertainty," Jack Martin, a portfolio manager at Oberon Investments said. "Failing this, at least those businesses with an ability to shift their means of production to the U.S. to avoid adverse effects from any tariffs."
(Reporting by Richa Naidu; editing by David Evans)
The article discusses Reckitt's exposure to US tariffs in the ongoing trade war and its potential impact on costs and pricing.
Reckitt manufactures about 57% of its US sales volumes locally.
Reckitt is investing in its American supply chain and monitoring tariff developments to mitigate impacts.
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