Gillette gets break from steel tariffs for its razors

The Trump administration is giving Gillette a break on steel.

The shaving brand has been granted an exemption from the 25% tariff the U.S. government imposed on steel imports earlier this year, its parent company, Procter & Gamble (PG), said Tuesday.

The company said that because Gillette was unable to find the right kind of steel for its razor blades in the United States, it has imported it from a Swedish supplier for more than 20 years. Together, they have developed a “very specialized steel” that is “key to our success and the high-quality products that we produce,” P&G said in its exemption request.

It warned that a failure to get a reprieve from the tariffs would hurt Gillette’s U.S. manufacturing operations and push up prices for consumers.

P&G’s rival Edgewell Personal Care (EPC), which owns the Wilkinson Sword and Schick razor brands, reportedly received a similar waiver in June.

Edgewell didn’t respond to a request for comment late Tuesday outside of regular business hours.

P&G, the world’s biggest shaving player, has been struggling with shifting consumer habits (American men are shaving less often) and competition from cheaper, direct-to-consumer online subscription shaving clubs, including Dollar Shave Club and Harry’s.

P&G’s grooming business — which includes Gillette, Braun and Venus razors, blades, and shaving products — accounted for 10% of the company’s $66.8 billion in sales last year. The company’s U.S. market share for men’s razors and blades dropped more than 13 percentage points from 2012 to 2017, according to Euromonitor data.

The Trump administration added to its headaches in March by announcing plans for tariffs of 25% on steel imports and 10% on aluminum imports. The measures took effect on shipments from the European Union in June.

As of mid-September, the Trump administration had approved more than 2,500 requests from companies to have products excluded from the steel tariffs, according to the Commerce Department.

The government changed the process in September for seeking exemptions from the steel and aluminum tariffs after businesses complained that the procedure was murky and tilted toward big companies that were able to squash requests from smaller ones.

The new guidelines gave companies more time to respond when other firms try to block their exemption requests.