Sayantani Ghosh, David Gaffen, Arpan Varghese
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By Sayantani Ghosh, David Gaffen, Arpan Varghese
SAN FRANCISCO/NEW YORK/BENGALURU (Reuters) -President Donald Trump's trade war has cost companies more than $34 billion in lost sales and higher costs, according to a Reuters analysis of corporate disclosures, a toll that is expected to rise as ongoing uncertainty over tariffs paralyzes decision making at some of the world's largest companies.
Across the United States, Asia and Europe, companies including Apple, Ford, Porsche and Sony have pulled or slashed their profit forecasts, and an overwhelming majority say the erratic nature of Trump's trade policies has made it impossible to accurately estimate costs. Reuters reviewed company statements, regulatory filings, conference and media call transcripts to pull together for the first time a snapshot of the tariff cost so far for global businesses.
The $33 billion is a sum of estimates from 32 companies in the S&P 500, three companies from Europe's STOXX 600 and 21 companies in Japan's Nikkei 225 indices. Economists say the cost to businesses will likely be multiple times what companies have so far disclosed.
"You can double or triple your tally and we'd still say ... the magnitude is bound to be far greater than most people realize," said Jeffrey Sonnenfeld, professor at the Yale School of Management.
The ripple effects could be worse, he added, citing the potential for lower spending from consumers and businesses, higher inflation expectations.
While a recent pause in Sino-US trade hostilities has offered some relief and Trump has backed down from tariff threats against Europe, it is still not clear what the final trade deals will look like. A U.S. trade court on Wednesday blocked Trump's tariffs from going into effect. In this environment, strategists say companies will look to strengthen supply chains, boost near-shoring efforts, and prioritize new markets - all of which will push up costs.
Companies themselves are uncertain about the final cost. As the corporate earnings season draws to a close, Reuters found at least 42 companies have cut their forecasts and 16 have withdrawn or suspended their guidance. For instance, earlier this month, Walmart declined to provide a quarterly profit forecast and said it would raise prices, drawing a rebuke from Trump. Volvo Cars, one of the European automakers most exposed to U.S. tariffs, withdrew its earnings forecast for the next two years and United Airlines gave two different forecasts, saying it was impossible to predict the macro environment this year.
