Tiger Balm faces tariff aches and pains from Trump’s commerce battle with China
Tiger balm, the favored menthol ointment utilized by athletes and arthritis sufferers, has only one U.S. distributor and a single manufacturing facility in China, making it particularly susceptible to the tariff standoff.
A 0.63-ounce hexagonal jar of the amber-colored balm usually sells within the U.S. for about $8. However its sole American distributor, Prince of Peace Enterprises, primarily based in Livermore, California, says retail costs may quickly rise as President Donald Trump hiked up tariffs on China as excessive as 145%.
The ointment for the U.S. markets is produced at a manufacturing facility in China and, on the present tax fee, the distributor is anticipating $3 million to $5 million in tariff prices this yr for Tiger Balm merchandise, stated Matt Chin, Prince of Peace president. Not less than a few of that could be handed onto customers, however not for now.
“We’re adopting a extra measured method,” Chin stated. “Our prospects depend on us, and we wish to maintain off on elevating costs.”
Har Paw Corp., a pharmaceutical firm primarily based in Singapore, is the headquarters for Tiger Balm merchandise. However the American product comes out of China, and sells greater than $30 million value of the ointment in the united statesannually. Har Paw didn’t reply to requests for remark.
The bruising commerce battle between the U.S. and China is slamming into American companies that import well-liked international merchandise for which there aren’t any clear substitutes.
Redolent of camphor and menthol, Tiger Balm was first developed within the late nineteenth century and is used to alleviate illnesses from muscle aches to colds and complications. Lately, the product has discovered worldwide enchantment, gaining endorsement from basketball’s Jeremy Lin and pop star Woman Gaga.
Trump roiled international markets final month when he imposed punishing reciprocal tariffs on imports from 90 nations, together with greater than a dozen from Asia. He has since introduced a 90-day pause on the extra levies for many nations — whereas preserving in place a ten% baseline fee — however raised the tax on Chinese language imports to 125%. China has retaliated by mountain climbing up tariffs on American items from 84% to 125%.
The present fee for pharmaceutical imports, which kind the spine of Prince of Peace’s stock, are set at 20%, they usually’re exempt from new reciprocal tariffs. However Trump has vowed to impose “main tariffs” on the merchandise quickly.
Prince and Peace provides Tiger Balm to chains like CVS and Walmart in addition to native pharmacies. Chin stated the corporate has continued to position stock and absorbed rising tariff prices. Up to now, there’s been no change in demand as a result of the corporate hasn’t raised costs. However the problem is that huge field retailers typically require worth adjustments to be introduced 90 days prematurely, Chin stated.
“If Walmart, for instance, gained’t make an exception for the worth enhance resulting from tariffs, which means as the vendor we must eat the distinction,” he stated.
Prince of Peace additionally carries tons of of ginseng merchandise, natural teas and different well being dietary supplements imported from China that haven’t any Western options.
Analysis has proven that tariff prices are borne principally by U.S. customers and companies. New tariffs on China have an effect on about 13% of U.S. imports and should value customers as much as $25 billion yearly, in keeping with a report from the center-right economics analysis nonprofit American Motion Discussion board. In 2018, when Trump carried out sweeping tariffs throughout his first time period, the U.S. misplaced roughly $7.2 billion in actual revenue.
Yan Liang, a professor of economics at Willamette College in Oregon, stated specialty items like Tiger Balm and ginseng don’t compete with U.S. manufacturing and jobs. Quite, they create jobs and income within the service sector.
“Distributors might have to soak up a number of the rising prices so costs don’t need to rise an excessive amount of to discourage customers,” Liang stated. “In each situations, these small Chinese language American distributors are being squeezed.”
Chin can be the president of the Oriental Meals Affiliation, which represents greater than 40 Asian meals importers and distributors in Northern California. He stated the group has been participating with commerce representatives and the Chinese language consulate in San Francisco for extra readability concerning the financial outlook of the tariffs.
Smaller natural outlets and drugs halls in Chinatowns throughout the U.S., Chin stated, are taking a much bigger hit from the tariffs as they run on narrower margins. However he’s optimistic that the Chinese language American enterprise neighborhood will climate the storm, because it did in 2018, when Trump imposed as much as 25% tariffs on imported Chinese language items.
“It’s undoubtedly a blow to morale,” Chin stated, “however we’re robust and can get via these setbacks as an entire.”
