Donald Trump's tariffs hit hard: Global corporations struggle with rising costs and trade policy uncertainty

Donald Trump’s tariffs hit hard: Corporations across various sectors worldwide are grappling with rising prices, revised financial projections , and heightened concerns as trade policies under US President Donald Trump escalate operational costs, disrupt supply chains, and create economic uncertainty .

First-quarter earnings reports revealed that companies globally faced substantial challenges, as leadership teams sought to adapt to the administration's fluctuating trade policies. With financial reporting continuing into its second significant week, businesses are assessing the financial impact and developing strategies to address these challenges, as reported by Reuters.

"We will have to pull every lever we have in our arsenal to mitigate the impact of tariffs on our cost structure and P&L," said Procter & Gamble (PG.N) CFO Andre Schulten, following an announcement of price hikes to offset tariff-related costs.

Business and investor statements from major food, beverage, and consumer goods companies have raised concerns that Trump's inconsistent tariff stance, along with his criticism of Federal Reserve Chair Jerome Powell, could dampen consumer confidence.

"Relative to where we were three months ago, we probably are not feeling as good about the consumer," remarked PepsiCo CFO Jamie Caulfield during an earnings call.

Also read: The twist in US-China trade war

A Reuters analysis indicated that approximately 30 global companies have recently modified or withdrawn their forecasts. The impact spans multiple sectors, including Tesla, which plans to reassess its growth projections due to trade policies and market responses affecting sales.

Korean automaker Hyundai Motor has formed a dedicated team to address tariff challenges and shifted some Tucson vehicle production from Mexico to the US. The company generates significant revenue from US operations, with imports constituting the bulk of their American sales. "We expect a challenging business outlook to continue due to escalating trade wars and other unpredictable macroeconomic factors," said the automaker.

Several pharmaceutical companies are increasing their US investments, despite concerns over potential healthcare funding cuts and FDA staffing reductions. Bristol Myers CFO David Elkins expressed particular concern about the potential impact on innovation and the accessibility of medicines.

Meanwhile, Chinese e-commerce giant reported that nearly 3,000 companies have shown interest in their 200 billion yuan ($27.35 billion) initiative, launched on April 11, which aims to support exporters in expanding their domestic market presence over the coming year.

While the US equity market has recently shown stability, with the administration signaling possible tariff adjustments and continuing discussions with various nations, the S&P 500 remains down by 7.5 per cent for the year.