Businesses pare back outlook as Trump tariffs weigh on spending

Businesses in various industries have revised their financial forecasts due to the increasing uncertainty caused by President Donald Trump’s trade war, which is driving up costs, disrupting supply chains, and raising concerns about the global economy. Earnings reports from Thursday revealed that companies worldwide are facing challenges navigating the Trump administration’s fluctuating trade policies.

Major concerns were raised by top packaged food companies, expressing worries about the impact of Trump’s tariffs and criticisms of US Federal Reserve Chair Jerome Powell on consumer confidence and investor sentiment. While the stock market remained uncertain and the dollar fluctuated, investors grappled with the administration’s changing announcements on tariffs and Federal Reserve leadership.

Despite a temporary pause on most tariffs until July 8, ongoing concerns persist about the potential long-term effects, including the impact on imported goods from China and other countries. Companies like Procter & Gamble, PepsiCo, and Thermo Fisher Scientific have adjusted their annual profit forecasts due to trade uncertainties, with American Airlines also withdrawing its financial guidance for 2025.

As the first-quarter earnings season progresses, companies are assessing the fallout from trade disruptions and outlining strategies to mitigate the risks. Hyundai Motor, for example, has formed a task force to address tariff challenges and relocated production of certain vehicles to the US from Mexico. Consumer sentiment has also been affected, with signs of declining demand in various sectors, such as tourism and dining out, due to economic uncertainty.

Amidst the trade turmoil, businesses are bracing for continued challenges ahead, with concerns about potential inflationary pressures and economic slowdown. While some companies are absorbing the costs to avoid losing customers, others are considering price hikes to offset the impact of tariffs. The outlook remains uncertain as companies navigate the evolving trade landscape and consumer market conditions.