Last July, Winston-Salem, NC-based Primo Water found itself caught up in President Donald Trump’s trade war with China. The U.S. imposed import tariffs on about 6,000 Chinese goods worth about $200 billion. The products included onions, cat food, cigars, furniture polish, instant film, rubber gloves, charcoal, rayon, cement bricks, mirrors, copper pipes, saw blades, vehicle radiators, mattresses and buttons. Unfortunately for Primo, the list also included devices with refrigeration compressors. Primo distributes bulk purified drinking water, as well as home and office dispensers that chill the water
using a compressor. This key product was therefore subject to a 25% tariff that became effective on July 6 of last year. Primo raised prices and took a lower operating margin to offset the higher cost, executives disclosed late last year. The company also went to work to convince the government that the tariff was unnecessary for a product that wasn’t also produced by U.S. companies, CEO Matt Sheehan told BD. The argument worked. Early this month, the Office of the U.S. Trade Representative exempted the dispensers, he said. The decision was made retroactive to July. Sheehan expects to lower prices
at retail, which he believes will stoke demand for the dispensers.
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