International brands, including German shoe manufacturer Birkenstock and Pandora, are looking to raise prices globally because of Donald Trump's trade policies. Birkenstock chief financial officer, Ivica Krolo said it'll be a "low, single digit price increase globally" for a full offset of US tariff impacts. Principal at Economics Unchained and former CBA chief economist, Stephen Halmarick says if the brands impose all of the price increase on US consumers, that could reduce demand significantly and bring unwanted attention from the US President, so they seem to be looking at spreading the costs in different markets.
The RBA deputy governor Andrew Hauser warns firms spreading costs worldwide could backfire, saying "trying to insulate your US demand by putting prices up in other markets might be self defeating because you might just end up killing your demand everywhere."
Analysts are now watching Samsung and Apple's next move, as they've been threatened with 25 per cent tariff on phones not made in the United States. But tech analyst Dan Ives says if phones were made in America, they'd be three times the cost they are now.
Treasurer Jim Chalmers says higher prices sparked by tariffs are a key concern for the government. This comes as Australia's inflation remained steady at 2.4 per cent in the year to April, driven by higher prices for holidays and food, in particular eggs, lamb, goat and fruit. Rent hikes eased, while electricity and fuel prices went backwards.
The Reserve Bank's preferred measure of underlying inflation ticked up to 2.8 per cent, which is still within the central bank's target range. The RBA cut interest rates by 25 basis points in May, and economists are predicting further cuts in 2025.
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