Sonos feels the burn from Trump's Terrible Tariffs

Summary: Sonos is now taking the new tariffs that Trump implemented into consideration. The company’s supply chain includes Malaysia and Vietnam; these two countries were hit hard by tariffs, so this could have a negative effect on the company’s plans.

Get ready for prices for most of your products to soar. The president of the United States is imposing tariffs on just about everything, and we’re all going to see the effects. As part of the tariffs, the iPhone could see a major price hike. The same will go for many other products we use in our daily lives.

This will include the fancy soundbars that we use in our home theaters. Audio brand Sonos is one of the most popular speaker companies on the market. While the company has been struggling with its app (really struggling), it has been continuing to pump out products. Sonos’ speakers are generally expensive, but the recent torrent of tariffs might make them even more pricey.

Sonos is taking the tariffs into consideration

The best-laid plans of mice and men often go awry. Sonos strived to diversify its supply chain a few years ago. It started manufacturing its U.S. devices in Malaysia and Vietnam.

In fact, during its latest earnings call, Sonos‘ CFO Saori Casey, said, “You may recall we underwent a significant effort to diversify our supply chain a few years ago, which resulted in a manufacturing of nearly all of our U.S.-bound products shifting to Malaysia and Vietnam. As a result, we expect tariffs to have a minimal impact to our gross margin in Q2 based on what we know today.”

That sounds optimistic. However, in a bit of cosmic comedy, Trump hit Malaysia and Vietnam with 24% and 46% tariffs, respectively. This happened on Wednesday. These high taxes on imported goods will more than likely dig into the company’s profits. Sonos isn’t exactly an Apple or a Microsoft. Losing money on its hardware due to taxes could be devastating for the company.

Sonos said that it will take these new tariffs into consideration. At this point, there aren’t many options for the company, so if it won’t eat the costs, its customers will. This could mean that it will be forced to raise its prices. Only time will tell what the company will do.

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