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    Stocks making the biggest moves after hours: Amazon, Pinterest, Expedia and more

    Amazon signage during the 2024 CES event in Las Vegas, Nevada, on Jan. 10, 2024.
    Bridget Bennett | Bloomberg | Getty Images

    Check out the companies making headlines in extended trading:
    Amazon — The e-commerce giant fell 2% after issuing weaker-than-expected guidance for the current quarter. Amazon said it forecasts sales in the first quarter between $151 billion and $155.5 billion. Analysts surveyed by LSEG were looking for $158.5 billion. Meanwhile, the company’s fourth-quarter earnings and revenue were above consensus expectations. 

    Take-Two Interactive Software — The video game company jumped nearly 7% despite posting fiscal third-quarter revenue of $1.37 billion. Analysts polled by LSEG had expected $1.39 billion. Take-Two sees its current-quarter revenue, based on net bookings, coming in between $1.48 billion and $1.58 billion versus the estimated $1.54 billion.
    Affirm Holdings — Shares of the payment company jumped more than 9% following a top-line beat for the fiscal second quarter. Affirm reported $866 million in revenues, while analysts expected $807 million, per LSEG. Gross merchandise volume grew 35% year-over-year in the prior quarter.
    Pinterest — Shares of the social media company popped 18%. Revenue for the fourth quarter came in at $1.15 billion, slightly ahead of analysts’ estimates of $1.14 billion, per LSEG. Pinterest also said it expects revenue of $837 million to $852 million in the first quarter, while analysts sought $833 million.
    Expedia — The stock gained 11% after the company’s fourth-quarter results topped Wall Street expectations. Expedia posted adjusted earnings of $2.39 per share on revenue of $3.18 billion. That is more than the $2.04 per share on $3.07 billion in revenue that analysts had penciled in, according to LSEG. The company also reinstated its quarterly dividend at 40 cents per share.
    Bill Holdings — Shares plunged about 32% after the billing software company issued disappointing fiscal third-quarter revenue guidance. Bill Holdings expects for that period to generate revenue between $352.5 million and $357.5 million, below the $360.4 million that analysts surveyed by LSEG were expecting. However, earnings and revenue for the second quarter beat analysts’ expectations.

    Fortinet — The cybersecurity stock rallied 11%. Fortinet posted better-than-expected results for the fourth quarter, in addition to strong guidance for the full year. Fortinet sees full-year revenues falling between $6.65 billion and $6.85 billion, topping the $6.63 billion estimate from analysts, per LSEG. 
    E.l.f. Beauty — The cosmetics company tumbled 23% after slashing its guidance for the full fiscal year. E.l.f now sees sales ranging from $1.3 billion to $1.31 billion, short of consensus estimates of $1.34 billion, per StreetAccount. Adjusted earnings for the third quarter also narrowly missed expectations, coming in at 74 cents per share versus analysts’ forecast for 75 cents a share, per LSEG.
    Monolithic Power Systems — The semiconductor stock soared 16% following strong fourth-quarter results. Monolithic Power Systems reported adjusted earnings of $4.09 per share on revenue of $621.7 million. Analysts surveyed by FactSet had called for earnings of $3.98 per share on $608.1 million in revenue. The company also issued better-than-expected revenue guidance for the current quarter and a $500 million stock repurchase program. Management also increased the quarterly dividend by nearly 25%. — CNBC’s Sean Conlon, Lisa Kailai Han and Darla Mercado contributed reporting. More

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    E.l.f. Beauty CEO says company is ‘relieved’ China tariffs are only 10%

    E.l.f. Beauty relies heavily on China for manufacturing and was “relieved” to learn new duties from President Donald Trump were only 10%.
    “We actually were somewhat relieved when it was only 10 points, because at one time the rhetoric was as high as 60% tariffs,” CEO Tarang Amin told CNBC.
    The company raised prices on a third of its items by $1 during the last round of tariffs, but isn’t sure if it will need to do so this time around.

    The New York Stock Exchange welcomes E.l.f. Beauty on March 18, 2024, to celebrate its 20th anniversary of founding.

    The CEO of E.l.f. Beauty, which manufactures about 80% of its cosmetics in China, told CNBC on Thursday that it was “relieved” the new tariff on Chinese imports is only 10%. The retailer isn’t sure yet if it will need to raise prices. 
    “[It] seems like a weird thing to say, but we actually were somewhat relieved when it was only 10 points because at one time, the rhetoric was as high as 60% tariffs,” Tarang Amin said when discussing his company’s fiscal third-quarter earnings results.

    With regard to raising prices, he said, “we’ll see whether we need to.”
    The comments come just days after President Donald Trump slapped a new 10% tariff on goods imported from China into the U.S., raising concerns about companies such as E.l.f. with significant supply chains in the region.
    While 25% tariffs on Mexico and Canada have since been paused for 30 days, Beijing and Washington have yet to come to an agreement, and China has hit the U.S. back with a slew of retaliatory measures, including blacklisting Calvin Klein’s parent company PVH Corp. 
    The uncertainty around whether the new Chinese tariffs are here to stay has led some companies, such as Barbie maker Mattel, to say they will lean on price increases to offset the effect to profits. E.l.f. struck a similar tune in November when 60% tariffs still seemed like a possibility. 
    “We also want to play it out. There’s so much back and forth going on right now. If there was a higher level of tariff, we don’t want to announce our pricing actions until we know kind of where we feel it’s really going to settle out,” he explained. 

    When Trump put new 25% tariffs on China during his first term, Amin said the company raised prices on a third of its items by $1 and saw a “good consumer response,” even with its reputation for offering more affordable “dupes” of prestige cosmetics at drug store prices.
    At the time, E.l.f. was manufacturing nearly 100% of its goods in China. This time around, it is in a better position after reducing its reliance on the region by about 20%. It also has a bigger international business and does more sales outside of the U.S. 
    “The good thing, because we do have a long supply chain … we won’t face it this fiscal year. It won’t be until about, you know, well into our [fiscal year 2026] before we start seeing the value of that higher inventory,” said Amin. “So we have time to really make sure we have the playbook.”

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    How the U.S. has used tariffs throughout history — and why Trump is different, economists say

    The U.S. has used tariffs since its founding in the 18th century.
    They were primarily a way to raise revenue in the nation’s early days. Later, tariffs were largely used to restrict imports or as a bargaining chip to reduce trade barriers.
    President Donald Trump’s use of the import duties has broken with historical norms, economists and historians said.

    Shipping containers are seen at the Port of Montreal in Montreal, Canada, on Feb. 3, 2025. 
    Andrej Ivanov | Afp | Getty Images

    President Donald Trump imposed broad tariffs on China that took effect Tuesday, while his tariff threats hang over other major trading partners: Canada, the European Union and Mexico.
    That may lead some to wonder: How have tariffs been wielded throughout U.S. history, and is Trump’s use of them unusual?

    The ‘three Rs’ of tariffs

    The U.S. has used tariffs since its founding in the 18th century.
    In fact, the Tariff Act of 1789 was among the first bills ever passed by Congress.
    Since then, the U.S. has used tariffs to achieve three broad goals, said Douglas Irwin, an economics professor at Dartmouth College and past president of the Economic History Association.
    Irwin calls them the “three Rs”: revenue; restriction, or import barriers to protect domestic industry; and reciprocity, a bargaining chip to cut deals with other countries.

    Using tariffs for revenue

    Tariffs are taxes on U.S. imports, paid by the entity that’s importing the foreign goods. Those taxes raise revenue to help fund the federal government.

    For roughly the first third of the nation’s history — from its founding until the Civil War — the revenue motivation was “paramount” as a driver to impose import duties, Irwin said. The federal government relied on tariffs for about 90% or more of its revenue during that period, he said.

    But things changed after the Civil War, Irwin said. The U.S. started to impose other taxes, such as excise taxes, that made the nation less reliant on tariffs.
    Tariffs generated about half of federal revenue from about 1860 to 1913, when the income tax was created, Irwin said.
    The scale of the government expanded significantly in the 1930s — with the creation of New Deal programs such as Social Security — and later for defense spending during World War II and the Cold War, said Kris James Mitchener, an economics professor at Santa Clara University who studies economic history and political economy.
    Today, “tariffs simply cannot raise enough revenue to fund government expenditure,” Mitchener said. “There’s no possible way you could support the size of the U.S. military on tariff revenue.”

    Restriction and reciprocity

    From the Civil War to the Great Depression, the U.S. primarily used tariffs as a restrictive measure on imports, to insulate the domestic market from foreign competition, Irwin said.
    The Tariff Act of 1930, popularly known as the Smoot-Hawley Tariff, levied protective tariffs on about 800 to 900 different types of goods, accounting for about 25% of all goods imported to the U.S., Mitchener said.
    The U.S. also used tariffs as a reciprocal bargaining chip.
    For example, before the U.S. annexed Hawaii, it signed a free-trade agreement with the Kingdom of Hawaii in 1875. The treaty allowed for duty-free imports of Hawaiian sugar and other agricultural products into the U.S. In exchange, the U.S. got exclusive access to the harbor that would later be known as Pearl Harbor.
    The post-Depression, and especially the post-World War II period, became an era of reciprocity, Irwin said.
    The U.S. helped create the General Agreement on Tariffs and Trade in 1948, the precursor to the World Trade Organization, which set global rules for trade and ushered in an era of low tariffs.
    More from Personal Finance:What the ‘mother of all trade wars’ can teach us about U.S. tariffsCould Trump’s tariffs replace the income tax?Stockpiling ahead of higher tariffs is a big mistake, experts say

    How the president’s tariff power grew

    U.S. import taxes before the WWII era were pretty high, ranging from 20% to 50%, sometimes even reaching 60%, Irwin said. They have been “very low” since 1950 or so, he said.
    The average duty on goods subject to a tariff was about 2% to 4% in the 2010s before Trump’s first term, Mitchener said.
    “That’s what President Trump is trying to overturn, this sort of low period of tariffs we’ve had since World War II,” Irwin said.

    Before 1934, Congress — not presidents — had power over tariff rates and negotiations, said Andrew Wender Cohen, a history professor at Syracuse University.
    But Democrats — then known as the political party of free trade — had an enormous majority around the New Deal era and passed the Reciprocal Trade Agreements Act of 1934, granting the president the right to negotiate tariffs in certain cases, Cohen said.
    “That’s when the president gains a much more substantial authority,” Cohen said.
    That power accelerated after 1948 during the “transformation of the whole global economic order,” he said.

    Why Trump tariff policy is ‘very unusual,’ economists say

    President Donald Trump in the Oval Office of the White House on Feb. 03, 2025. 
    Anna Moneymaker | Getty Images News | Getty Images

    Trump’s use of tariff policy is “very unusual” among modern U.S. presidents, Cohen said.
    For one, Trump “likes all three Rs” — revenue, restriction and reciprocity, Irwin said.
    On the campaign trail, Trump suggested that tariffs could replace the U.S. income tax to fund the government. He said during his campaign that tariffs would create U.S. factory jobs and has threatened to use them to strong-arm Denmark to give up Greenland.
    However, there are trade-offs, Irwin said. Restricting imports somewhat negates tariffs’ ability to raise revenue, because it diminishes the tax base for tariffs, he said. Those additional duties may cause companies to import fewer goods or may push people to buy less, for instance.
    “You can’t really achieve all three objectives at the same time,” he said.
    Additionally, no previous president has tried to link a U.S. drug crisis to trade policy, as Trump did with fentanyl.
    “That’s a novel take,” Mitchener said.

    Many presidents have used tariffs. For example, George W. Bush, Ronald Reagan and Richard Nixon applied tariffs to protect the U.S. steel industry, as Trump did in his first term, Irwin said.
    “What’s unusual about Trump is, he’s not just picking out particular industries that he thinks are of strategic importance, but he’s blocking imports across the board almost with some of these countries,” Irwin said.  
    Trump imposed a 10% additional tariff on all Chinese goods and threatened a 25% tariff on imports from Canada and Mexico.
    “No president in recent memory has really used tariffs across the board or in a broad-brush way to achieve various objectives,” Irwin said. “They’ve sort of adhered to the rule that we belong to the WTO. That means we keep our tariffs low as long as other countries keep their tariffs low.”

    Global trade treaties, such as the United States-Mexico-Canada Agreement, which Trump signed in his first term, establish a mechanism for nations to file grievances for alleged unfair trade practices, Cohen said. Nations can generally raise tariffs as a retaliatory measure if trade rules are breached, according to the treaty terms, he said.
    Trump’s recent unilateral tariff announcements are unique in this regard, he said.
    “I can’t think of any precedent for that,” Cohen said.
    “While the executive branch was given much more power since 1934, it’s always been subject to the specific terms of the agreements,” he said. More

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    Bank stocks pop after Fed releases ‘easier’ 2025 stress test, plans to make exam more predictable

    Bank shares rose Thursday after the Federal Reserve released parameters for its annual industry stress test showing smaller hypothetical shocks to the U.S. economy than in previous years.
    While still challenging, with U.S. joblessness jumping to 10% and a 33% drop in home prices, the 2025 exam has smaller spikes in unemployment and smaller declines in stock and real estate values than previous versions, Jason Goldberg of Barclays said Thursday.
    The Fed also said it would soon be taking steps to “reduce the volatility of stress test results and begin to improve model transparency” in the 2025 exam.

    Jane Fraser, CEO of Citi, speaks during the Milken Institute Global Conference in Beverly Hills, California, on May 1, 2023. 
    Patrick T. Fallon | AFP | Getty Images

    Bank shares rose Thursday after the Federal Reserve released parameters for its annual industry stress test showing smaller hypothetical shocks to the U.S. economy than in previous years.
    While still challenging, with U.S. joblessness jumping to 10% and a 33% drop in home prices, the 2025 exam has smaller spikes in unemployment and smaller declines in stock and real estate values than previous versions, Jason Goldberg of Barclays said Thursday in a note titled “2025 Stress Test: Scenarios Easier than Past Two Years.”

    The Fed will soon take steps to “reduce the volatility of stress test results and begin to improve model transparency” in the 2025 exam, the regulator said in a statement released Wednesday after the close of regular trading.
    Shares of Citigroup jumped 2.9% in midday trading, while Goldman Sachs, Morgan Stanley and Bank of America each rose at least 1.5%. Big banks gained more than smaller lenders, with the KBW Bank Index rising 1.2% compared with the 0.9% gain of the S&P Regional Banking ETF.
    The stress test changes bolster the case made by Wall Street analysts that big U.S. banks will face a friendlier regulatory regime under the Trump administration. Since the aftermath of the 2008 financial crisis, the biggest U.S. banks have had to undergo annual exams that test their ability to withstand a severe recession while continuing to lend to consumers and businesses.
    Banks have complained for years that the annual stress tests were opaque and unfairly administered, and industry trade groups sued the Fed in December over the exam.
    By making the latest iteration of the test both less challenging and more predictable, banks could hold smaller capital cushions later this year, according to Bank of America analyst Ebrahim Poonawala.

    “The 2025 stress test scenario, broadly better vs last year, increases our confidence that banks should begin to see relief on regulatory capital requirements, given our expectations for a shift to a balanced, transparent, and more predictable regulatory regime,” Poonawala wrote Thursday in a note.
    — CNBC’s Michael Bloom contributed to this report.

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    Former New Orleans Saints quarterback Drew Brees hints at return to broadcasting

    Brees said he has “maybe” held talks with media executives about being part of an NFL broadcast team for next season.
    Brees, the former New Orleans Saints and San Diego Chargers quarterback, spent one year at NBC Sports as an NFL studio analyst.
    Brees spoke with CNBC Sport on Radio Row in New Orleans ahead of Super Bowl 59 on Sunday.

    Former New Orleans Saints quarterback Drew Brees said he’d like to join an NFL broadcast team as a game analyst, and hinted he’s already in talks with media companies for a role.
    Brees signed a multiyear contract with NBC Sports in 2020, but only spent a year as an NFL studio analyst before leaving the role in what then-head of NBC Sports Pete Bevacqua called a “lifestyle choice” for Brees.

    Drew Brees of ESPN Monday Night Countdown on set before the game between the Miami Dolphins and the Los Angeles Rams at SoFi Stadium in Inglewood, California, on Nov. 11, 2024.
    Ric Tapia | Getty Images

    If he were to return to broadcasting, Brees said he’d feel comfortable as a game commentator, following the footsteps of other quarterbacks of his era including Tom Brady and Tony Romo. Brady signed a 10-year contract with Fox in 2022 worth at least $375 million, according to The Athletic. He will conclude his first season broadcasting Sunday’s Super Bowl 59.
    “I love broadcast because there’s an insight that comes with playing the position, the quarterback position, for 20 years that you have that nobody else has. I feel like we’re extremely well equipped to be able to talk about and communicate exactly what’s happened on the field and why,” Brees said Thursday in a CNBC Sport interview on Radio Row in New Orleans ahead of the Super Bowl. “So look, I would, with the right opportunity, I’d love to.”
    When asked if Brees had already held talks with media executives, he said, “Maybe.” Pressed if a job could begin next season, he also responded, “Maybe.”
    “I love the game of football, and I will always be involved in the NFL game in some capacity,” said Brees. More

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    New Orleans prepares for Super Bowl 59, its biggest weekend of the year

    New Orleans is preparing for an estimated 125,000 visitors and a presidential visit during the weekend of Super Bowl 59.
    Hotel demand is surging, and Caesars is in the spotlight.
    Law enforcement has enhanced its efforts since a New Year’s Day attack in the city’s French Quarter.

    Kansas City Chiefs and Philadelphia Eagles flags at Voodoo Chicken & Daiquiris restaurant on Bourbon Street prior to Super Bowl 59.
    Kirby Lee | Reuters

    New Orleans is preparing for an estimated 125,000 visitors and a presidential visit during the weekend of Super Bowl 59, as the reigning champion Kansas City Chiefs take on the Philadelphia Eagles at the Caesars Superdome.
    Local businesses are ready, and hotel demand is surging.

    Tripadvisor said demand for hotel rooms in New Orleans surged 637% this week as fans of the competing NFL teams scurry to find lodging. Interest from travelers in Pennsylvania and New Jersey has increased more than 14 times, and interest from people in Kansas and Missouri is up 8.5 times since the division championship games in the last week of January, the travel site said.
    As of Thursday morning, the average hotel room was going for $650 per night, according to Hotels.com, which is owned by Expedia.
    Caesars has the spotlight, however. Along with naming rights to the New Orleans Saints’ stadium, where the NFL championship will be played, Caesars also holds lucrative status as the only casino in New Orleans.
    The company has rolled out the red carpet with a nearly half-billion-dollar overhaul of what was formerly a Harrah’s-branded property, and it is using the big game to introduce the brand to new customers.
    The biggest football game of the year comes just weeks after a New Year’s Day attack that took place in the city’s French Quarter and killed 14 people, putting New Orleans on high alert.

    Security around town is tight. State police, city police and the U.S. Department of Homeland Security all have a heavy presence.
    At an NFL briefing on Monday, law enforcement said more than 700 different types of Homeland Security officials will be on the ground during the Super Bowl, and that was before President Donald Trump indicated plans to attend the game.
    “I am confident that the safest areas to be in the country this weekend is under the security umbrella our team has put together,” said Cathy Lanier, the NFL’s chief security officer.
    Since the Jan. 1 attack in New Orleans, NFL Executive Vice President Jeff Miller said the league has redoubled its safety efforts.
    “We added resources, and we feel really good about where we are,” Miller told CNBC. More

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    Eli Lilly posts mixed quarter even as demand for weight loss, diabetes drugs soars

    Eli Lilly reported mixed results for the fourth quarter as sales of its blockbuster weight loss and diabetes drugs soared but saw lower realized prices.
    Demand in the U.S. has far outpaced supply for Eli Lilly’s incretin drugs, such as Zepbound and Mounjaro, over the last year.

    Eli Lilly on Thursday reported mixed results for the fourth quarter, even as sales of its blockbuster weight loss drug Zepbound and diabetes treatment Mounjaro soared.
    The company’s quarterly earnings topped Wall Street estimates, but sales fell just short as Mounjaro saw lower realized prices. Zepbound and Mounjaro have now underperformed expectations for two straight quarters, with the company previously pointing to issues around inventory decreases among wholesalers.

    The pharmaceutical giant also issued fiscal 2025 profit guidance of $22.05 to $23.55 per share, which is in line with what analysts were expecting. Eli Lilly reiterated its fiscal 2025 sales guidance of $58 billion to $61 billion. 
    The figures were consistent with the preliminary results Eli Lilly shared in January, which disappointed investors. Eli Lilly had slashed its 2024 revenue guidance, as it said demand for its weight loss and diabetes drugs would not meet its lofty expectations.
    Notably, Eli Lilly said it plans to report late-stage data on its next-generation obesity drug retatrutide later this year, a few months earlier than expected. Retatrutide works differently from any of the treatments on the market, mimicking three different hunger-regulating hormones: GLP-1, GIP and glucagon.
    Here’s what Eli Lilly reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

    Earnings per share: $5.32 adjusted vs. $4.95 expected
    Revenue: $13.53 billion vs. $13.57 billion expected

    The company posted fourth-quarter revenue of $13.53 billion, up 45% from the same period a year ago. 

    The pharmaceutical giant booked net income of $4.41 billion, or $4.88 per share, for the fourth quarter. That compares with a profit of $2.19 billion, or $2.42 a share, a year earlier. 
    Excluding one-time items associated with the value of intangible assets and other adjustments, Eli Lilly posted earnings of $5.32 per share for the fourth quarter of 2024.

    Zepbound, Mounjaro performance

    Mounjaro posted $3.53 billion in revenue for the fourth quarter, up 60% from the year-earlier period. Analysts had expected the drug to book $3.62 billion in sales for the quarter, according to StreetAccount.  
    Eli Lilly said the increase reflects strong demand and increased supply of Mounjaro, but was partially offset by lower realized prices due to “favorable changes” in the fourth quarter of 2023 to estimates for rebates and discounts. 
    Meanwhile, the results cap Zepbound’s first full year on the U.S. market. The weekly injection raked in $1.91 billion in sales for the fourth quarter, which is below the $1.98 billion that analysts expected, according to StreetAccount. 
    But demand in the U.S. has still far outpaced supply for Eli Lilly’s incretin drugs, such as Zepbound and Mounjaro, over the last year. Both treatments mimic certain gut hormones to tamp down a person’s appetite and regulate their blood sugar.
    The popularity of those injectable drugs has forced both Eli Lilly and its rival Novo Nordisk to invest billions to ramp up manufacturing capacity for their treatments. The efforts appear to be paying off: The Food and Drug Administration in December reaffirmed its decision to declare the U.S. shortage of tirzepatide — the active ingredient in Zepbound and Mounjaro — over.
    Eli Lilly on Thursday estimated that it will produce at least 1.6 times the amount of incretin doses in the first half of 2025 compared to the first half of 2024.
    The results also kick off a critical year for Eli Lilly, which is slated to release closely watched clinical trial data on its experimental obesity pill, orforglipron. Those results are expected by the middle of the year.
    This story is developing. Please check back for updates. More

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    How Calvin Klein and Tommy Hilfiger got caught in Trump’s trade war with China

    The owner of Calvin Klein and Tommy Hilfiger has been placed on China’s “unreliable entities” list, which could force it to shut down stores, cease manufacturing and send its employees home.
    China placed PVH on the list soon after President Donald Trump slapped a new 10% tariff on Chinese imports, and came along with other retaliatory actions, such as new duties on U.S. energy imports.
    PVH has a significant manufacturing footprint in China and has about 18% of its suppliers and factories in the region.

    People shop for clothes at a Calvin Klein store at a mall in Beijing on Feb. 5, 2025.
    Adek Berry | AFP | Getty Images

    China has blacklisted the owner of Calvin Klein and Tommy Hilfiger, which could force the company to shut down stores and manufacturing in an early repercussion of President Donald Trump’s trade war. 
    China added PVH Corp. to its “unreliable entities” list on Tuesday, which allows the Chinese government to fine the retailer, prohibit import and export activities, revoke work permits, and deny employees the ability to enter the country, among other deliberately vague powers. 

    While China’s Ministry of Commerce began investigating PVH in September for allegedly refusing to source cotton from the Xinjiang region, which has become notorious for its Uyghur detention camps, Beijing officially placed the company on its blacklist on Tuesday. The announcement came just days after Trump slapped a 10% tariff on imports from China, and came along with a slew of other retaliatory measures against the U.S., including new duties on energy imports and farm gear. 
    “There’s this tit-for-tat trade war going on, and [China] wants to show the United States that it’s going to take action to hurt either big U.S. companies or companies with significant interests in the U.S.,” said Michael Kaye, a partner at Squire Patton Boggs, who has been practicing international trade law for more than 30 years. “They’re being made an example. … My guess is, [China] wanted to pick somebody and they wanted it to be somebody that was high visibility.”
    Now that PVH is on the unreliable entities list, China could force the company to shut down the dozens of stores that it operates in the region and forbid it from selling its wares to Chinese consumers online, said Kaye. Its staff — including those who’ve built lives in China — could be effectively deported and sent home, Kaye added.
    It is unclear if China would try to enforce actions against PVH in the autonomous region of Hong Kong, where the company’s Asia-Pacific headquarters are. In 2020, China passed a law that gave it more power to enforce national laws in Hong Kong, and that is “particularly the case with laws applicable to national security,” which could include the unreliable entities list, said Kaye.
    As of Thursday morning Eastern time, the company appeared to be operating its business as usual in China.

    China could even prohibit PVH from manufacturing in the region altogether, which could force it to move production to other countries and struggle to meet customer orders. 
    It’s unclear which steps exactly China will take, or if the Trump administration will try to convince China not to punish the company.
    In a statement, PVH said that it was “surprised and deeply disappointed to learn of the decision from the Chinese Ministry of Commerce.”
    “In our 20 years of operating in China and proudly serving our consumers, as a matter of policy, PVH maintains strict compliance with all relevant laws and regulations and operates in line with established industry standards and practices. We will continue our engagement with relevant authorities and look forward to a positive resolution,” the company said.
    China represented 6% of PVH’s sales and 16% of its earnings before interest and taxes in 2023, but it relies more heavily on the country for manufacturing, which is the bigger risk to its business. PVH has more factories and suppliers in China than in any other region, representing about 18% of production, according to a disclosure it issued in December. 

    “This has the potential to be very, very disruptive for PVH,” said GlobalData managing director and retail analyst Neil Saunders. “They would certainly have to scramble to find new capacity. They’d be able to do that in time, of course, but the two things that are at issue are that, because a lot of supply chains are just in time, they would probably find that they did get short on inventory whilst they made the transition. The other issue, of course, is quality.” 
    PVH has operated in China for more than 20 years, and while it works with suppliers and factories in more than 30 other countries, the higher-end goods that it makes can be difficult to manufacture elsewhere because of the skill level needed, said Saunders. 
    “While you can shift manufacturing capacity reasonably easily, it’s not so easy to guarantee the quality, guarantee the production processes. Those things take time to upskill,” said Saunders. “China has that capacity and has those skills, because PVH has been operating there for ages. Another country, another manufacturing facility, may not have those skills immediately.” 
    Plus, PVH has viewed China as a growth market and it will now have to look for new strategies to increase sales and profitability as demand falls for its high-end dresses, intimate apparel and sweaters. 
    China’s unreliable entities list is a relatively new law in the country, and experts say it’s deliberately opaque. The government has wide latitude to take action against PVH, but it remains unclear what exactly it will do. Typically, guidance comes within a few days of a company’s placement on the blacklist, said Kaye. 
    China could add PVH to the list and do nothing to the company, but Kaye said the chances of that are “very slim” because the government will want to avoid the perception that it’s backing down. China will more likely use PVH as a bargaining chip at the negotiating table with Trump, and use it as an example to show the power it has to inflict pain on other U.S. businesses with major operations and customer bases in China, such as Nike, Apple, General Motors, Starbucks and others. 
    “There’s a sort of sword of Damocles hanging over [PVH’s] head, and that is exactly what this is, because this isn’t really about PVH at all. This is about PVH being caught in the spat between China and the U.S.,” said Saunders. “China is using PVH as an example to say, look, if tariffs go ahead, if other restrictions are put in place on China, we can make life difficult for U.S. companies in the country. That’s really what this is about.”

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