Global firms face $35B financial hit thanks to US tariffs
What's the story
Global corporations have reported over $35 billion in costs due to US tariffs as they head into their third-quarter earnings. However, many are now revising their initial estimates downward, thanks to new trade deals that lessen their exposure to President Donald Trump's duties. The tariffs were introduced as part of Trump's trade war, which has raised US tariffs to levels not seen since the 1930s.
Financial projections
A look at the analysis
A Reuters analysis of hundreds of corporate statements, regulatory filings, and earnings calls from July 16 to September 30, shows firms expected a combined financial hit of $21 billion to $22.9 billion for 2025. The impact for 2026 was nearly $15 billion. This total of over $35 billion is slightly higher than the $34 billion recorded in May after Trump's "Liberation Day" tariffs in April disrupted global supply chains.
Forecast adjustments
Many companies have revised their worst-case forecasts downward
The increase in the total financial hit is mainly due to Toyota's $9.5 billion estimate. However, many companies have revised their initial worst-case forecasts downward after Trump struck lower-rate trade deals with the EU and Japan. French spirits makers Remy Cointreau and Pernod Ricard both lowered their estimates of tariff pain after the EU deal, while Sony cut its forecast in August.
Business adaptation
Stellantis CEO says 'tariffs are getting clearer and clearer'
Stellantis CEO Antonio Filosa told Reuters in mid-October that "tariffs are getting clearer and clearer." He added, "We believe that tariffs will be just another variable of our business equation that we need to be ready to manage, and we will." This statement comes as Stellantis announced new details of a $13 billion, four-year investment in US manufacturing.
Ongoing uncertainty
ICC Deputy Secretary General warns of continued uncertainty
International Chamber of Commerce Deputy Secretary General Andrew Wilson said, "I think there is this sense that we reached a kind of landing point with some of the bilateral trade deals." However, he also warned that "there will continue to be much greater complexity and this massive uncertainty." This was evident when Trump suggested additional 100% tariffs on China earlier this month.
Sector impact
S&P 500 companies expected to report muted earnings growth rate
S&P 500 companies are expected to report an earnings growth rate of 9.3% in the July-September period, down from 13.8% in Q2, LSEG data shows. The US IT sector, driven by AI investment, is actually contributing positively to growth. Europe's Stoxx 600 is also expected to see a dip in growth at just 0.5%, compared to the previous quarter's 4%.
Tariff toll
Nike raised its tariff impact estimate to $1.5B
Companies heavily reliant on countries without trade deals are feeling the pinch of tariffs. Nike, which sources products from Vietnam and other Asian nations, raised its tariff impact estimate to $1.5 billion from $1 billion last month. In Europe, kitchenware maker SEB recently lowered its profit outlook due to weaker demand as customers adopted a wait-and-see attitude amid tariffs.