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CEO adds a ‘Trump tariff surcharge' to products from China: ‘I want people to understand how it impacts us'

[CNBC] CEO adds a ‘Trump tariff surcharge’ to products from China: ‘I want people to understand how it impacts us’
Photo courtesy of Alexandra Fine

American business owners are struggling to keep up with fast-changing tariff policies, and some are already responding by raising their prices.

Dame, a sexual wellness brand, is putting what it calls a "Trump tariff surcharge" of $5 on all of its vibrators, which it imports from China.

The fee won't cover the increased cost of manufacturing, Dame CEO Alexandra Fine told CNBC Make It. But it will signal to consumers that businesses like Dame are being affected, she says.

"So we've made the tough call to adjust prices to be able to keep bringing you the quality, body-safe products you love," Dame captioned an Instagram post about the surcharge. "We're adding $5 for now—which doesn't cover the full cost as we hate to put the brunt of this on you—while we figure out what to do next."

"I want people to understand how it impacts us," Fine says. "We are renegotiating again with our manufacturers. We are adjusting our logistics. We are changing our inventory."

Tariffs are paid by importing companies, which can increase costs for businesses.

On Wednesday, President Donald Trump announced he was raising the U.S. tariff rate on Chinese imports from 104% to 125% "effective immediately." That comes on top of a 20% fentanyl-related tariff that the Trump administration previously imposed on China, bringing the total effective rate to a whopping 145%, a White House official confirmed to CNBC.

China earlier Wednesday said it would increase its tariff rate for imports from the U.S. to 84%.

Due to the rapid changes in tariff rates on China, Fine says Dame has had to go back to its manufacturer a few times to settle on pricing.

Other companies are warning shoppers that price hikes are imminent.

Clothing brand Miista sent an email on Wednesday saying the then-additional 20% tariff on European goods would raise the company's costs and likely affect shoppers starting in May. The company said it would try its best to increase consumer prices as little as possible.

Brooklyn-based handbag retailer Hyer Goods announced on April 3 that its Italian-made products would cost 20% more starting April 15. "Raising prices is never something we want to do, but with these new tariffs, it has become unavoidable," a statement said.

The EU was hit with 20% tariffs when Washington issued what it called "reciprocal" duties on trade partners on April 2. The levy has been reduced to 10% for 90 days following Trump's Wednesday announcement.

Changing tariff rates have made it hard for Dame to "commit to a price," Fine says. And retailers like Target and Walmart, which carry Dame vibrators, ask for 60 to 90 days notice of a price change, she says.

The amount of labor that goes into renegotiating prices for each store is also costly, Fine explains, since a price that makes sense today might not make sense tomorrow.

"Ideally, I try not to do work that might not be relevant in two weeks, but it's not possible right now so we are just trying to stay agile and ahead of it and make decisions," she says. "It is so much paperwork."

For now, shoppers purchasing Dame vibrators can expect to pay an extra $5, a price increase of 3% to 5% depending on the product, but Fine says she doesn't know how changing tariffs will affect her business.

"One thing all entrepreneurs know is the stability of the future is always an illusion," Fine says. "You plan based on the knowledge you have."

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