Trump tariffs will cost businesses tens of billions, from GM to Apple.
From Apple Inc. to General Motors Co., corporate America is preparing for substantial financial repercussions amounting to tens of billions of dollars due to Trump’s trade war — and this assessment comes prior to the arrival of most impacted goods. Among US companies that have disclosed financial projections thus far, GM anticipates a $5 billion impact this year, whereas Apple projects an increase of $900 million in costs for the current quarter. Nvidia is incurring a $5.5 billion charge to reflect the implications of new export controls. Corporate managers are adopting various strategies, such as relocating production from China and preemptively increasing material orders in anticipation of rising prices.
The administration of President Donald Trump implemented comprehensive tariffs on the majority of imports while specifically designating certain countries and industries for supplementary levies. Duties on numerous Chinese imports reach as high as 145 percent, prompting Beijing to impose retaliatory import taxes of 125 percent on American goods. Steel and aluminum produced outside the United States are subject to a 25 percent tariff imposed by the US government. The preemptive warnings from these and other blue-chip companies may significantly underestimate the overall impact on their bottom lines. A significant number of companies have not yet issued guidance, with several adopting a wait-and-see strategy. Some have indicated potential difficulties by broadening expense projections, retracting their full-year forecasts, or cautioning that price increases may diminish consumer demand.
Meta Platforms Inc. has increased its capital spending forecast for the year by up to $7 billion, attributing this adjustment partly to higher-than-anticipated expenses for equipment sourced globally. “There’s just a lot of uncertainty around this given the ongoing trade discussions,” stated Susan Li, chief financial officer of the parent company of Facebook and Instagram, during a call with analysts.
The term “uncertainty” has emerged as a prevalent descriptor among executives in the context of quarterly financial results calls. The term in question has appeared over 9,000 times in corporate calls this season, surpassing its previous peak at the onset of the Covid-19 pandemic, marking the highest frequency recorded in Bloomberg data. A multitude of firms remain to disclose their most recent earnings and address inquiries from analysts regarding the impact of tariffs, including Nvidia, Oracle Corp., Home Depot Inc., and Walmart Inc. Certain sectors, including online advertising, are expected to experience effects later in the year, contingent upon businesses reducing their budgets to counterbalance persistently high costs or diminished consumer demand.
Microsoft Corp. reported that sales of its Windows software and other products increased at a rate surpassing expectations, as customers accumulated inventory. Amazon.com Inc. expedited certain inventory acquisitions in the first quarter in anticipation of forthcoming tariffs. The decision, alongside unrelated expenses tied to customer returns, resulted in a decline in profitability of approximately $1 billion during the first quarter. “Clearly, none of us can predict with precision the eventual outcome of tariffs or the timeline for such developments,” stated Andy Jassy, Amazon’s chief executive officer, during a conference call with analysts.
GM, a company that sources vehicles from South Korea, Canada, and Mexico, ranks as one of the most significant casualties in Corporate America to date. The Detroit-based company, along with other automakers, faces significant challenges due to a 25 percent duty imposed on the majority of imported vehicles. Import duties on components are adversely affecting the production of vehicles at American automotive facilities. Competitor Ford Motor Co., which manufactures 80 percent of the vehicles it sells in the US, announced on May 5 that it anticipates the tariffs will decrease earnings before interest and taxes by approximately $1.5 billion this year. Motorcycle manufacturer Harley-Davidson Inc. projects that tariffs may result in costs of up to $175 million this year.
It is not solely American automotive manufacturers. Japan’s Toyota Motor Corp. announced on Thursday that US tariffs are projected to reduce its operating income by $1.3 billion within the initial two months following April 2, a date referred to by Trump as his trade “Liberation Day.” Other manufacturers are experiencing comparable pressure on their profit margins due to tariffs. Procter & Gamble Co. has projected that the current and proposed levies may increase its annual costs by $1 billion to $1.5 billion. The consumer goods giant intends to address this issue partially by increasing the prices of its products.
“It’s not immaterial,” remarked P&G CFO Andre Schulten during an earnings call with analysts on April 24. Stanley Black & Decker Inc., a manufacturer of power tools and lawn mowers, has projected a gross tariff impact of $1.7 billion on an annualized basis. Despite adjustments to the supply chain and price hikes aimed at mitigating the impact, the company anticipates a decline of approximately 15 percent in its earnings for the year. That presumes that sticker shock does not suppress demand to a level where the company can no longer mitigate the impact through cost reductions. “Price increases will be necessary in the US market due to the current tariffs, and we have implemented a substantial increase in April,” stated Stanley CEO Donald Allan during an April 30 conference call with analysts. The company has communicated to its customers that additional price adjustments may be necessary should the current tariff levels remain unchanged.
Aerospace and defense titan RTX Corp. announced on April 22 that it is preparing for a $850 million hit to operating profits, despite ongoing mitigation efforts. Honeywell International Inc., GE HealthCare Technologies Inc., and GE Aerospace anticipate a 2025 impact from tariffs amounting to $500 million, excluding considerations for supply-chain adjustments and price escalations. Boeing Co. anticipates that tariffs will raise its manufacturing costs by under $500 million each year, which includes a 10 percent duty imposed on large components of its 787 Dreamliner produced in Japan and Italy. The repercussions may intensify should the European Union align with China in enacting reciprocal tariffs, rendering Boeing’s aircraft excessively costly for domestic purchasers.
3M Co. informed investors on April 22 that tariffs could impose costs of up to $850 million annually — contingent upon the absence of any measures to mitigate the effects. The diversified industrial product manufacturer indicated that its planned countermeasures will reduce its earnings exposure this year to below fifty percent of that figure.
Danaher Corp., a manufacturer of life sciences and diagnostics equipment, informed analysts during an April 22 call that it anticipates a $350 million impact from tariffs. The company is likely to mitigate this effect by implementing surcharges and relocating its manufacturing operations. Chemicals giant Dupont de Nemours Inc. is implementing strategies to decrease projected tariff expenses from $500 million to $60 million, equating to approximately 10 cents per share. “Our teams have been carefully analyzing ongoing global supply-chain dynamics, engaging with our customer and supplier base, and actively working on a number of tariff mitigation actions, including production shifts, sourcing alternatives, surcharges, and product exemptions,” stated CEO Lori Koch during an earnings call on May 2.
GE Vernova Inc., the energy division that was spun off by GE last year, anticipates that tariffs will contribute up to $400 million in expenses this year. The company intends to mitigate that impact by utilizing inflation-protection provisions and change-of-law clauses in contracts to transfer some of the tariff costs to customers, while simultaneously reducing expenses and restructuring its supply chain to decrease reliance on China.
Medical instrument specialist Thermo Fisher Scientific Inc. and Johnson & Johnson have both indicated an anticipated loss of $400 million due to tariffs in 2025. Another drugmaker, Merck & Co., indicated that tariffs will impose a cost of $200 million this year.
Even food companies are facing challenges due to the import duties. Hershey Co. indicated that it anticipates incurring $15 million to $20 million in costs attributable to tariffs during the second quarter. However, with cocoa inventories diminishing, the chocolate and candy manufacturer indicated that it anticipates duties will increase costs by approximately $100 million in both the third and fourth quarters, prior to considering any mitigating measures.
