[Text/Observer Network Zhang Jingjuan] Since President Trump of the United States took office, he has disregarded the consequences and insisted on igniting the trade war. From the beginning of this trade dispute, its negative impact has continued to spread, causing great harm to global enterprises.
Reuters reported on the 29th that Trump's tariff war has led to a decline in sales and rising costs for companies, causing more than $34 billion (approximately RMB 244.4 billion) in losses for global companies. Due to the ongoing uncertainty of tariffs, many large multinational companies have been paralyzed in decision-making, and this loss is expected to rise further.
Including Apple, Ford, Porsche, and Sony, companies across the U.S., Asia, and Europe have significantly reduced their profit forecasts or withdrawn earnings guidance. Most companies stated that Trump's unpredictable trade policies make it impossible to accurately estimate costs.
Reuters, through reviewing company statements, regulatory documents, meetings, and media call records, has compiled for the first time a comprehensive overview of the tariff costs borne by global companies so far.
The calculated numbers are based on the total of estimates from 32 companies in the S&P 500 index, 3 companies in the Euro Stoxx 600 index, and 21 companies in the Nikkei 225 index.
Economists said that the actual costs borne by companies could be several times higher than what is currently disclosed.
Professor Jeffrey Sonnenfeld of Yale University said, "Even if we double or triple the current figures, we still believe... the actual impact will necessarily far exceed most people's expectations."
He added that the chain reaction may worsen, such as reduced consumer and business spending, and rising inflation expectations.
Reports said that although the recent cooling of Sino-U.S. trade friction has provided a breathing space for the market, and Trump has "withdrawn" his tariff threats against Europe, the final appearance of the trade agreement remains unclear. After all, Trump still faces pressure at home.
The U.S. Court of International Trade ruled on the 28th that Trump had no right to impose blanket comprehensive tariffs on almost all countries, thus declaring the April 2 "Liberation Day" tariff measures, which triggered a global trade war and might disrupt the world economy, legally invalid.
Strategists believe that in this situation, companies will seek to strengthen supply chains, promote nearshoring, and prioritize the expansion of new markets, all of which will increase costs.
Companies themselves are also uncertain about the final cost. Reuters said that as the earnings season approaches its end, at least 42 companies have lowered their earnings forecasts, and 16 companies have withdrawn or suspended their earnings guidance.
Last month, Walmart refused to provide quarterly profit forecasts and said it would raise prices, which drew criticism and warnings from Trump. Volvo Cars, one of the European car manufacturers most affected by American tariffs, withdrew its profitability forecast for the next two years. United Airlines gave two different estimates, stating that it was unable to predict the macro environment this year.
On April 2, local time, Trump signed an executive order imposing "reciprocal tariffs." Visual China
According to reports, on the quarterly earnings conference calls of the 360 companies (72%) in the S&P 500 index during the January-March quarter, the mention of tariffs exceeded the 150 companies (30%) in the previous quarter. The number of executives from companies in the Euro Stoxx 600 index mentioning tariffs increased from 161 last quarter to 219. In companies in the Nikkei 225 index, this number rose from 12 previously to 58.
Richard Bernstein Advisors CEO Richard Bernstein said, "I think companies lack a clear outlook on any future matters."
Regarding the phenomenon of companies withdrawing forecasts, he said, "Given the current uncertain environment and your inability to provide anyone with a definite number, not providing guidance would be more prudent."
According to data from London Stock Exchange Group (LSEG), Wall Street expects the average quarterly net profit growth rate of S&P 500 component companies to be 5.1%, compared to 11.7% last year.
Reuters pointed out that automobile manufacturers, airlines, and consumer goods importers have been hit the hardest. Rising tariffs on raw materials and components such as aluminum and electronic components, as well as tariffs imposed on multiple countries, have increased the cost of car assembly due to the dispersion of the supply chain. Moving any production to the U.S. would also increase labor costs.
Kimberly-Clark, a tissue paper manufacturer, significantly lowered its annual profit outlook last month and said that due to tariffs pushing up supply chain costs, it would incur an additional $300 million (approximately RMB 2.2 billion) this year. Days later, the company announced a $2 billion (approximately RMB 14.4 billion) investment over five years to expand production capacity in the U.S., a figure not included in Reuters' statistics.
In addition, companies including Apple and Eli Lilly have also announced investments in the U.S. this year.
Diageo, the maker of Johnnie Walker whiskey and Don Julio tequila, said earlier this month that tariffs were expected to result in a $150 million (approximately RMB 1.1 billion) annual operating profit loss, and the company plans to cut costs by $500 million (approximately RMB 3.6 billion) and carry out significant asset disposals before 2028.
Zak Stambor, an analyst at market research firm eMarketer, said, "Tariffs may significantly increase the cost of enjoying a wonderful evening out or even a comfortable stay at home."
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Original source: https://www.toutiao.com/article/7510070136729027111/
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