Upmarket speaker maker Sonos warned in its initial public offering paperwork released on Friday that the US-China trade skirmish poses a ‘material’ risk to its business, highlighting the growing uncertainty in corporate America.
The group, which revealed on Friday plans to float its shares on the Nasdaq stock exchange, said that levies applied by the US on Chinese goods and potential countermeasures could “materially” harm its operations.
“If significant tariffs or other restrictions are placed on Chinese imports or any related counter-measures are taken by China, our revenue and results of operations may be materially harmed,” the group said in a filing with the US Securities and Exchange Commission.
Sonos said the Trump administration’s decision to apply tariffs on imports of Chinese steel and aluminium “do not impact our raw material costs.”
However, if further tariffs are imposed on a broader range of imports, or if further retaliatory trade measures are taken by China or other countries in response to additional tariffs, we may be required to raise our prices, which may result in the loss of customers and harm our reputation and operating performance.
By most accounts, the US economy is chugging along. Jobs data released on Friday showed the unemployment rate remained near an 18-year low, while employment growth has continued at a brisk pace. At the same time, the economy is expected to have expanded at an annualised clip of 4.1 per cent in the second quarter, according to a forecast from the Atlanta Federal Reserve.
However, surveys have suggested that business leaders, particularly those at large companies with complex supply chains, are wary about the trade feud.
“Respondents are overwhelmingly concerned about how tariff related activity is and will continue to affect their business,” Timothy Fiore, chair of the Institute for Supply Management said this week as part of the group’s closely watched monthly report on America’s factory sector.