President Trump’s tariffs are a strategy, what the President refers to as a “medicine”, to break the US addiction to low-cost manufacturing which is part of generating the USD380 billion trade deficit, as of 2024, with China.
Using cookware as an example for data specifics, we can show how tariff policies imply double-digit inflationary pressure is landing in 2025 and show why investment in India is heating up.
A cost context for cookware is worth highlighting; before tariffs, inflation pressure was zero
Looking at the first half of 2025, before tariffs enter the equation, Euromonitor’s Inflation Projection Tool shows zero inflationary pressure coming from production input costs, which have been settling down.
Households, however, already absorbed 14 points of inflation at shelf pricing during 2022-2023 from pandemic-related disruption. This is about average across home and garden categories, and it sits within a perceived single-digit drop in discretionary household spend (after essentials).
The Euromonitor Voice of the Consumer: Lifestyles Survey, fielded in January and February 2025, showed that only homes with a combined income above USD80,000 were not already showing a spike year-on-year in price-sensitive “deal hunting” mindsets in the US.
Over and above what was passed on, brands and retailers between them absorbed seven extra points of cost pressure, carrying this within balance sheets for 18 months.
So, shoppers have inflation fatigue, and some brands and retailers are still carrying a debt (with exposure to interest rates) from that last brush with inflationary pressure.
Tariffs spiral rapidly, before President Trump and China both hit the pause button
The chart below maps production inflationary pressure for cookware, focusing on consumer price index (CPI) patterns in the US versus the trend for cost of goods sold (COGS) which includes input cost factors like raw materials, energy, labour, overheads, and shipping (for imports only).
This scenario shows the overall cost pressure created by tariffs, mapping everything known up to 13 May 2025, including the 90-day pause policies (not aligned by country) affecting multiple regions.
China imports account for circa 50% of all cookware sales, so the 145% tariff ceiling, built in stages, drives most of the pattern in the chart above, especially the cliff edge movements around April and August which relate to the 90-day pause.
This picture also includes the EU tariffs, growing to 20% in July if negotiations fail (which the UK escapes, having made its own deal). It also includes tariffs threatened and then paused until early July for Thailand (facing 36%), Vietnam (facing 46%), and India (facing 26%) if negotiations fail to reach a deal – these are the largest cookware importers after China, in order of 2024 scale.
The tariff “exposure” concern is once again a dominating supply strategy driver
The initial problem for brands and retailers is how to manage the April-May spike and the harsh disruptions to forecasts, shipment planning and supplier relations that this pattern implies. Teams must decide what they dare to try passing on to consumers, given the publicised pause, already soft demand, and shoppers’ inflation fatigue.
Then comes the challenge of predicting if the brinkmanship phase is over (as recent noises from the White House have implied) or if the August cliff edge after the 90-day pause period is worth including in future risk planning. Some provision for more turbulence seems a bare necessity.
The brand challenge has two aspects. Companies facing parity on tariff impacts with rivals will be worried more about losing total demand to delayed purchasing and trading down; however, suppliers to the US up against rivals focused on domestic manufacturing need to worry about the ease of substitution if they pass on these costs to the shelf.
In cookware, for example, this is exactly the dilemma one of the leading premium brands, Le Creuset, faces, with manufacturing spread across Europe, China, and Thailand, up against rivals such as All-Clad, Lodge and Viking, which each have US manufacturing (in Pennsylvania, Tennessee and Mississippi, respectively).
China+1 strategies are top of mind again, but a rising step change looks to be India+1
This is the second time in a decade for catastrophic consequences being linked to exposure to China due to tariffs, so a further boost to the China+1 strategy is logical, as is an unreasonable but understandable demand from shareholders for CEOs to deliver better supply “safety”.
The move that most undermined “safe supply” thinking was the inclusion of tariffs aimed at the largest beneficiary countries of a China+1 strategy in Southeast Asia
Source: Euromonitor International
When the largest China+1 alternatives like Thailand, Vietnam, and India face their own tariffs, previous thinking around what “diversification of supply” means must be forcibly shaken up – exactly as intended, when the goal of US policy is to make domestic production in the US more attractive.
Within company communications, we see the dialogue for operational investment at scale directed towards India and the US only, so far, and away from China. We may need to start calling this an India+1 strategy soon, by the look of that trend. The delta for everything else looks marginal, as leaders try to hedge their bets.
With India set to become the third largest economy by 2027, and with the US trade deficit with India being one of the healthiest of the countries in scope, there is good reason to think the White House will have India towards the front of the queue when it comes to deal-making and a return to stability.
Euromonitor’s Inflation Projection Tool behind this analysis is a foresight modelling tool adding value for clients.
For further insights, please read our report, How Trump's Economic Policies Affect Industries and Consumer Markets, for more on tariff impacts and other aspects of policy changes.
