The Journal. - How One Company Is Navigating a New Era of Tariff Uncertainty

Episode Date: February 26, 2026

Newell Brands, the Atlanta-based maker of dozens of household brands including Rubbermaid, Coleman and Yankee Candle, paid more than $170 million in tariffs last year. Newell’s CEO Chris Peterson tells Jessica Mendoza that those tariffs hurt business and the company is considering requesting a refund. He also talks about plans to bring more manufacturing to America. One of its brands, Sharpie, is now almost completely made in the United States. But making that happen wasn’t easy.  Further Listening:  Trump's Tariffs Are Illegal. He's Got a Plan B. How Tariffs Could End Italian Pasta in the U.S. How to Make a $12.98 T-Shirt... in the U.S. Learn more about your ad choices. Visit megaphone.fm/adchoices

Newell brands. It isn't a household name, but a lot of its brands are, like crock pot, rubber made, Yankee candle, and papermaid. A lot of Newell's products are manufactured overseas, and many of them were hit with tariffs. Ultimately, Newell paid more than $170 million in tariffs last year. This week, I spoke with Newell's CEO, Chris Peterson. And if you're listening to this on Spotify, you can watch the interview.

too. I do want to address the big news from last week, which is that the Supreme Court ruled that many of the president's global tariffs are illegal. And then he announced a new set of 15% tariffs across the board. How are you processing all of this? You know, it's interesting. I was at a big investor conference on Friday, and I went on the stage about an hour after the Supreme Court ruling came out. So it was a good timing. That must have been fun. And I said at the time that effectively, we're going to have to wait and see. It's unclear exactly how all of this is going to play out. The substantial majority of that money that we paid was under the IEPA tariffs, which are the ones that the Supreme Court has ruled not valid. And so there's sort of a couple of questions.

Number one is, are we entitled to a refund or not? And, you know, that I think is going to go to a lower court to figure out. But the more important question to your point is what is the go forward? As the company tries to find its footing in a shaky tariff landscape, it's also doing something else, making more in the U.S. One brand in particular, Sharpie. Sharpie has recently gone from being made overseas into an almost completely American-made product. I talked to Chris about how he pulled that off, whether or not he can do it with his other brands, and how tariffs factor into those plans. Welcome to The Journal, our show about money, business, and power.

I'm Jessica Mendoza. It's Thursday, February 26. Coming up on the show, one CEO on tariff uncertainty, and the realities of manufacturing in America. A quick overview of Newell brands. It's a massive conglomerate based in Atlanta. It owns dozens of consumer brands. In recent years, the company's profits have declined.

In its latest earnings, Newell reported a net loss of 350. million dollars, and net sales were down by 2.7 percent. Chris Peterson stepped in to lead the company as CEO in 2023, and he's been trying to overhaul the company's manufacturing ever since. Today, he says that about 57 percent of the goods-newal cells in the U.S. are made here. Overseas, what are some of the main countries that you manufacture in? We've made a significant shift in that over the last couple of years. So we used to be heavily reliant on China for manufacturing overseas. Today, we've diversified that to many countries across Southeast Asia and a few in Latin America, like Mexico. And so today,

less than 10 percent of our business is sourced from China into the U.S. But we source from China, from India, from Japan, from Vietnam, from Thailand, and a number of other countries. want to make all your products in the U.S.? Yeah, so we want to make a lot of our products in the U.S. There are a couple, probably our biggest brand that we don't make in the U.S. at this point is Graco, which is the car seat and stroller brand, which is the leading U.S. car seat manufacturer brand. Most car seats that are sophisticated car seats are all made in China. We work with a partner there who has a very sophisticated manufacturing setup, and that business is highly regulated by NHTSA because you have to pass crash testing safety standards.

They've got a subsupplier base that's already in place. So that business would be difficult to move out of China. It would take a lot of investment and a lot of time to do that. So we've chosen not to go after that one. But a lot of the other ones we are going after. And the cycle time advantage of being in the U.S. if you're serving the U.S. consumer is a real thing. You know, it takes us, you know, probably 70 days or 75 days lead time to get a product from Asia to the U.S. If it's a manufactured product in the U.S., our lead time might go down to seven or ten days.

So it's much faster to react to different demand signals to be more responsive. of an agile and how you operate. Besides great go, besides car seats and strollers, are there any brands or products that you wouldn't manufacture in the U.S. or are just too hard for whatever reason? Yeah, there's a few things that we do that require like sewing, and that's a difficult skill to do in the U.S. It just doesn't really exist here, and I'm not sure that there's that many people that want to go into the sewing, which requires very nimble dexterity. And so there are some things like

that that are just better done overseas. But if there are things that we know how to do, that we've built the capability from a core competency how to do, those were very much focused on bringing back to the U.S. Your company paid more than 170 million in tariff duties last year, as you said. Are the Are there are behind why some of your other brands are struggling? Yes. There's no question. So, you know, if you look at what we did when the tariffs came out, there were really

three things that we did. The first thing is we tried to say, what could we move from a sourcing standpoint? Were there things we could even accelerate into the U.S.? And we did some of that? We also moved some of our sourcing out of China to other markets in Southeast Asia. The second thing we did was we got focused on productivity. We tried to put more productivity initiatives in place to offset the tariffs, and we did an overhead productivity program to try to reduce cost there.

And then the third thing that we did was we actually took three rounds of pricing, where we had to raise our consumer prices to, in some cases, for the tariff cost. On that third piece, because our products generally are the market-leading brands, where we raised price, we probably raised price first. Some of our competitors didn't raise price as fast as we did. And so we lost a little bit of market share for three or four months. We believe that that's now equalized and we're now on sort of comparable footing. So we feel much better about our pricing position as we had into 2006. So when the Supreme Court ruled last week, was there any relief for you at all? I would say a little bit, a little bit. I mean, I was not, I was sort of expecting it because if you looked at the polymarket, not that that's, everybody looks at polymarket. They were predicting 75% chance, but nobody knew when the ruling was going to come out. But, you know, I think it's still too early to tell because clearly the administration has other tariff authority that they intend to use. And so the real question is, once all of that new tariff authority, gets applied, is it, you know, is it different or better or worse than what the old system was?

Right. So, you know, we're going to have to remain agile and adjust as the tariff rates change. Mm-hmm. And one thing the Supreme Court justices didn't explicitly address was whether or not there should be tariff refunds. Yes. Would you consider pursuing tariff refund? I would consider it, yes. You know, of our 174 million that we paid last year,

The substantial majority of that, as I mentioned, was under the IEPA, which has now been ruled in ballot. So we would have a fairly significant claim for a refund. And because we were the ones that paid the tariff, we are the ones that would be entitled to the tariff relief. Now, I don't think anybody has ruled on, are there going to be refunds? And if so, what's the process? That, I think, has been kicked to the court to decide the answer to that. So we'll watch it. I think if we are able to pursue it, we will pursue it. And then I think if we do get the money, I think we'll look to get even sharper on our consumer pricing on some of our goods. President Trump has been wanting more companies to manufacture here in the U.S., and he's been using tariffs as a policy to push for that. How much have tariffs motivated your efforts to produce more in the U.S.? It's interesting.

We got started about six years ago when I joined this company, seven years ago when I joined the company, on investing really in building out and improving our U.S. manufacturing. So I feel like we were ahead of the curve on this one. So we've invested over $2 billion in our U.S. manufacturing since 2017 to really automate, update, and re-skill our manufacturing plants and turn them into a competitive advantage, which I'm sure we'll get. into. After the break, what it took to bring Sharpie production to the U.S. Well, I want to focus now on one of your brands, one of the ones that you were able to bring manufacturing to the U.S. with. That's Sharpie. Until fairly recently, Sharpie markers were mostly manufactured overseas. Can you bring us back to the moment when you decided to fully bring Sharpie manufacturing back to the U.S.? What were you thinking about at the time?

Yeah, so this would have been, we got started really in probably 2019 or 2020. And when I joined the company, I had gone on a tour of our manufacturing plants. And as I mentioned at the time, it was a lot of very manual work that people were doing on what looked like a pretty dated manufacturing footprint. And what I became concerned about was that if that was how we were going to compete, when I went overseas and toured manufacturing footprint, plants in Asia and other places, I knew that our U.S. plants were not competitive with that because they had just been underinvested in from a automation standpoint was the first thing. The second thing is we had great people in the plants, but we weren't really training the people in higher skill labor. And so I thought there was an opportunity for us to bring manufacturing

back to the U.S. in a cost-competitive way and create great jobs for for the employees that worked there. Why Sharpie, out of all the brands your company owns? Sharpie is probably the brand that has the most desire from a consumer standpoint of our brands. We've got a lot of great brands, but Sharpie is our brand probably that has the best consumer response to it. Every time we've extended the brand, the brand has resonated with consumers and been very successful, and it's one of the company's largest brands.

So it was because the brand was popular in the U.S. and not so much because it was necessarily easier to make Sharpies here? That's right. That's right. It wasn't necessarily easier. And in fact, I would say that if you look at that plant that we have in Tennessee, I would say that that plant probably is the most sophisticated writing plant anywhere in the world that anybody has. And so that gives us a now a sustainable competitive advantage.

And could you say more about the state that that plant in Mariville was in when you started this project and, like, what it needed to expand manufacturing the way you envisioned? Yeah, it was, you know, if you walked into the plant back then, which I did, it was sort of a dark plant with a lot of manual work. It was doing, it was doing a lot of things that were not that strategic. It would have looked like a plant that you might have seen in, you know, the 1990s. or the 1980s even, that just had been operating the way it had been for many years without really a focus on continuous improvement. And so, you know, we did a lot. If you went into the plant today, it looks 180 degrees different than what it did seven years ago. The plant today is very bright.

Everything is clean. Everything is well positioned. It is highly automated. Today in our Sharpie plant in Maryville, Tennessee, we make about a half a billion Sharpie markers a year, which is a big number. And it only takes one person to operate the line instead of five or six. So it's 20 times more efficient from a human capital standpoint.

There's six components that go into a Sharpie permanent marker. and we've also insourced five out of the six components. So we make the components and we do the assembly. And so by bringing more stuff into the plant, we've created more work. We haven't had to add any people because we've automated the work. And then for the people who used to be there who were doing very manual work, we put in place a technical training program in the facility that allowed us to turn somebody who was like a packing laborer into an automation engineer.

so that they're now managing the machines that are doing the manual work, which is a great career path. Actually, on that note, headcount has remained relatively the same. And President Trump talks about bringing manufacturing back to the U.S. as a way to create jobs. Do you think reshoring is an effective way to grow jobs in a significant way? I do in a way. So our journey has been, if we hadn't have invested in this, the job count would have shrunk. And in fact, if we hadn't have done what we did, probably the plant wouldn't have been cost competitive and it may have even shut down over time. And so it doesn't necessarily mean that head count will increase dramatically in that plant. But the job, there are much higher caliber jobs than what they were. We're continuing to look at this, not just in writing, but across all of our businesses. I think a couple of years ago, we were maybe 45% of our U.S. business was made in the U.S. as I mentioned today, we're at 57.

So we, you know, we continue to move that number higher through this, through this effort. I did have one question about the manufacturing of Sharpies. Most of the Sharpie pen is made in the U.S. But am I right that the felt tip is still made in Japan? Yes, it is. Can you unpack that mystery for me? Why not make that piece of it in America, too? Well, we have a great supplier in Japan that makes the felt tip. And we just haven't gotten to insourcing and making that in Marriville yet.

But what you see is we make the caps, we make the barrels, we make the components. We actually make all the ink. So we have a separate ink manufacturing facility that's close by. The felt tip is a small component of it. But the strength of our Japanese supplier and the relationship we've had there has that one not on the top of our priority list at the moment. And so would you consider this effort to bring Sharpie manufacturing back here a success? 100%.

Yeah, there's no question about it. Our market shares on Sharpie are the highest they've been. We have extended Sharpie into the gel pen category and the creative marker category. We've consistently grown Sharpie's revenue from a revenue standpoint by, call it, three to five percent, each of the last four or five years. So Sharpie has been a fantastic success story. and it's operating at very high margins and very high profit. Well, Chris, given your experience bringing all of this like Sharpie manufacturing back to the U.S., some of your other brands as well, navigating tariffs in this environment, what should people take away about the realities of moving manufacturing to the U.S. today?

I think that there's a lot of manufacturing knowledge and know-how in the U.S. today. And there are many people that know how to run manufacturing. What I think is that the U.S. is right for more manufacturing because of the automation that's happened. With the automation that's been developed, the U.S. manufacturing plants today don't labor as a much smaller component of the cost of what's being produced. And so the advantage of being close to your customer, I think, outweighs. the labor cost differential. And so I'm of the opinion that now is actually a pretty good time for U.S. manufacturing to come back. And I think it can create some great, sustainable sort of blue-collar career paths for a big part of the population that has really been struggling in this country

for many years. Although it does sound like, based on what you said earlier, there are some asterisks to that in terms of certain products might just be more difficult to do. That's right. That's right. And that's exactly right. So I wouldn't be thinking about the apparel industry coming back. But I would be thinking about, you know, things like injection molded parts or steel or aluminum or those types of things. Automotive, you know, a lot of these things that the country knows how to do that can be relatively automated where the labor cost is low. I think the U.S. is well positioned for that. My last question for you, Chris.

It's been reported that President Trump has his own custom Sharpie. Can you confirm that? Yes. In fact, he uses them to sign the executive orders, and it's what we call a super Sharpie. So it's about double the size of a regular Sharpie. We do manufacture it, and I haven't seen it yet, but purportedly in the lower right-hand drawer of the resolute desk, the entire thing is filled with Sharpies, is what I've been told. How does someone get a custom Sharpie besides being president of the United States?

That's a good question. Actually, the person, you know, one of the interesting things is we are not actually doing the customization for him. So we're manufacturing the Super Sharpie, and then somebody else is doing the customization and supplying him. Amazing. Super Sharpie. New time for me. Well, Chris, thank you so much for your time. Really great having you on the show. Yeah, great to be with you, Jess. That's all for today, Thursday, February 26.

The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode by Natasha Khan. Thanks for joining us. See you tomorrow.