As St. Patrick's Day approaches, Guinness drinkers face a potential 10% price hike on pints amidst tariff uncertainties affecting profits. Diageo's financial chief, Nik Jhangiani, indicated that U.S. tariffs on Mexico and Canada might reduce operating profit by approximately $200 million. Currently, the average pint price in the UK is £4.48, projected to reach nearly £5 after the increase. Macro strategist John J. Hardy stressed that tariffs are often used as leverage rather than long-term policies, highlighting the ongoing uncertainty regarding actual tariff impacts after the upcoming deadlines.
A 10% increase is a reasonable baseline estimate for tariffs on European imports, but tariffs are chiefly used as a threat to prompt policy moves.
Diageo's warning is the company's effort to create an insurance policy while they wait to assess the damage caused by Trump's tariffs.
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