Trump's trade war is backfiring on the U.S. economy!

On Wednesday, local time, Walmart, the king of American retail, and Delta Air Lines, the giant of the aviation industry, both withdrew their earnings guidance. As two barometers of the U.S. economy, they are sending clear warning signals: the uncertainty brought by the trade war has begun to substantially affect the profitability of U.S. companies and consumer confidence, and the U.S. business community is in unprecedented uncertainty.

Walmart Withdraws Q1 Guidance: Tariff Uncertainty Forces Strategic Adjustment

On Wednesday, local time, Walmart withdrew its first-quarter revenue guidance due to the potential impact of comprehensive tariffs imposed by the Trump administration.

In a press release, Walmart stated that it hopes "to maintain flexibility in price investments during the implementation of tariffs." Walmart did not announce a new first-quarter revenue guidance. The company originally expected adjusted revenue growth of 0.5%-2.0% in the first quarter, with the latest sales growth forecast still maintained at 3%-4%.

Notably, even though it withdrew the first-quarter operating income guidance, this retail giant still maintained its full-year guidance. In February, Walmart said it expected net sales growth of 3%-4%, adjusted revenue growth of 3.5%-5.5% on a constant currency basis, and estimated full-year adjusted earnings per share of $2.50-$2.60.

Walmart CEO Doug McMillon stated at an investor event held in Dallas that the current situation is highly unusual. He said:

Our environment has obviously changed, so this is really stimulating for us.

Although we don't know what will happen, we do know what our priorities are and what our goals are, and we will focus on keeping prices as low as possible.

DAL Withdraws Full-Year Earnings Guidance: The Whole Company Enters a "Recessionary Defensive Posture"

On the same day, DAL withdrew its full-year earnings guidance for 2025, but expects to remain profitable for the year, citing the impact of Trump tariffs on flight bookings. According to the guidance released in January, DAL expected adjusted earnings per share this year would exceed $7.35.

Delta CEO Ed Bastian told reporters in an interview that it was too early to update the 2025 earnings guidance:

Considering the level of uncertainty we see and the amount of change happening in global trade every day, it's difficult to predict what the year might look like.

Delta predicted its second-quarter revenue would decline by up to 2% or increase by up to 2% compared to last year, while Wall Street previously expected growth of 1.9%. It also expected adjusted earnings per share of $1.70-$2.30, while analysts expected $2.23 per share.

Bastian further pointed out that the company is "operating as if we (the U.S. economy) will enter a recession," and "everyone is entering a defensive posture." The CEO said that as consumer and business confidence weakened, the company's revenue has "stabilized."

Bastian did not shy away from blaming all of this on Trump's trade policies, calling them "a wrong approach," which contrasts sharply with his statement last November that Trump's administration's regulatory approach to the industry might be "a breath of fresh air."

Tariff Storm Severely Impacts Consumer Confidence

The Trump administration's "reciprocal tariff" policy took effect at midnight on April 9, causing a chain reaction in American business circles, with both consumer and business confidence declining.

Delta reported that although international and premium travel demand remains relatively resilient, domestic ticket sales have been significantly impacted.

The company said that the travel demand that grew by about 10% earlier this year has slowed down, as some companies reconsidered business travel, the Trump administration significantly reduced government employees, and the market was volatile. In response, Delta canceled plans to increase flight capacity by 3%-4% in the second half of 2025.

Due to concerns about slowing demand, Wall Street analysts have recently lowered profit expectations and target prices for airlines. TD Cowen airline analysts Tom Fitzgerald and Helane Becker warned that after Delta, more airlines will announce cuts to capacity in the second half of this year.

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