Home Appliance Company Whirlpool Claims They Are 'Winning' From Trump's Tariffs Amid Sliding Sales

While most manufacturers are concerned about the impact of President Donald Trump's tariff measures on their business, Whirlpool has emerged as an unexpected beneficiary of the current trade landscape, thanks to its extensive American manufacturing footprint that produces 80% of everything it sells in the US.

This is despite the fact that the American company has recently seen a dip in sales, especially in neighbouring markets such as Canada, amidst reciprocal tariffs.

'Whirlpool a Net Winner'

During the company's recent Q1 earnings call, Chairman and CEO Marc Robert Bitzer struck a notably optimistic tone amidst what many consider a challenging trading environment.

'No matter how you look at it, Whirlpool, with its 10 large US factories, is a net winner of a new tariff policy. With our strong domestic footprint, we produce 80% of our domestic sales in the US, and no competitors are even close to that level of domestic production,' Bitzer said.

He said that in the near term, newly imposed tariffs are creating modest challenges for appliance manufacturers. 'Higher component costs and a surge of pre-tariff imports from Asian competitors are disrupting the market. The overseas producers aggressively increased shipments to the US in the first and fourth quarters, effectively saturating the market ahead of the new trade barriers.'

Nonetheless, domestic manufacturers like Whirlpool could see a significant competitive advantage emerge.

How Their Domestic Production Works

Bitzer mentioned that the company sources 98% of its steel domestically, contributing to its status as a US producer. This reliance on local supplies underscores Whirlpool's integration into the national manufacturing landscape.

He also emphasised that Whirlpool faces cost disadvantages due to tariffs on imported components, such as steel and LED panels, which they cannot procure domestically. This has historically created an approximately £52.58 ($70) per unit cost disadvantage compared to imported products from Asian manufacturers, who often circumvent these tariffs.

'We are not counting on a massive improvement of consumer behaviour or consumer landscape. [...] But what we are counting on is on the things which we are in our control, the cost takeout, the pricing actions which we've taken and the new product introduction,' Bitzer added.

Overseas Business Performance

The North American segment experienced flat year-over-year sales, primarily impacted by a challenging macro environment that led to decreased consumer confidence and issues related to increased inventories from imports ahead of tariffs. Despite these challenges, Whirlpool maintained a 6.2% EBIT margin, supported by practical pricing actions and cost management.

Moreover, Whirlpool achieved a 2% net sales growth in Latin America year-over-year, excluding currency effects. This growth was driven by successfully implemented pricing actions, and the segment's EBIT margin was substantial at 6.6%. This performance demonstrates resilience and the effectiveness of their strategies in this market.

Lastly, the Asia segment reported significant growth, with net sales up 16% year-over-year (excluding currency impacts). This increase was attributed to strong volume growth and market share gains. The segment also achieved a 7% EBIT margin, benefiting from cost efficiencies and leverage from fixed costs.

Strategies to Circumvent Tariffs

Whirlpool has implemented a combination of list price and promotional price increases to alleviate any tariff-related effects on its business and offset higher component costs arising from tariffs. This strategy aims to preserve margins while responding to rising production costs.

Moreover, Whirlpool is actively taking cost actions to address input cost increases. This includes evaluating its supply base and manufacturing footprint and reducing exposure to Asian suppliers.

Ultimately, the company is optimistic about adapting to new trade policies expected to close pre-existing advantages foreign competitors enjoy. This adaptation is designed to enhance operational efficiency and market share.

'Irrespective of macro environment, we remain focused on the things we control. We successfully implemented pricing actions and structurally drove costs out of our business. Even more important, we are excited about the initial market response to the huge wave of new products we are introducing this year, all of which are expected to expand ongoing EBIT margins in the second half of 2025,' Bitzer stated.