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Corporate America is counting the cost of Donald Trump’s trade war, with executives warning of escalating expenditures, gummed-up supply chains and a hit to the world’s largest economy.
While company leaders have generally avoided public criticism of the US president, they have been forced to confront his tariffs — which include levies of 145 per cent against export powerhouse China — on quarterly earnings calls with analysts this month.
Transport, energy, telecommunications and homebuilding companies were among those to discuss the tariffs with Wall Street. In their comments, executives raised the alarm about the consequences of Trump’s sweeping duties, echoing economists’ warnings of recession.
“CEOs are a really unhappy bunch at the moment,” said Steven Purdy, head of credit research at fund manager TCW.
Trump was warned of the impact his tariffs were having on trade by the chief executives of Walmart and Target in a meeting at the White House on Monday, according to one person familiar with the situation.
While fewer than a fifth of the blue-chip stocks in the S&P 500 index had held first-quarter earnings calls by Tuesday, tariffs were cited on more than 90 per cent of them, according to FactSet. The term “recession” was mentioned on 44 per cent of calls, compared with less than 3 per cent on those covering the fourth quarter of 2024.
Norfolk Southern, a big US freight railroad group, on Wednesday said tariffs could slow down shipments of cars and intermodal containers, while coal production might cool “amid significant uncertainty around export trade”. Boeing also said on Wednesday that the US trade war with China would force it to find alternative buyers for some of its aircraft.
Tariffs will drive up the cost of gas-fired power generators, just as US electricity demand grows at a rate “unlike anything we’ve ever seen since the end of World War II”, John Ketchum, chief executive of NextEra Energy, owner of the largest US power utility, said on Wednesday.
Gas turbine manufacturer GE Vernova said its costs could rise as much as $400mn this year, while oilfield services groups Halliburton and Baker Hughes warned that Trump’s trade war could dent earnings, disrupt supply chains and push down oil prices, causing a pullback in drilling.
Baker Hughes’ shares fell 6.4 per cent on Wednesday after it said tariffs could cost the company up to $200mn in earnings before interest, tax, depreciation and amortisation this year.
AT&T and Verizon, two of the biggest US telecoms groups, warned that tariffs could raise the price of phone handsets and wireless routers.
“If the tariff is going to be as high as they say on the handsets, we are not planning to cover that in our work. That’s just not going to be possible,” Verizon’s chief executive Hans Vestberg told analysts this week.
Boston Scientific said tariffs would cost the medical-device maker about $200mn this year, even as it raised its profit guidance. Johnson & Johnson last week maintained its annual earnings forecast but noted $400mn in costs related mainly to tariffs on medical devices.
At 3M, chief executive William Brown said “tariffs are going to be a headwind this year”. The manufacturer of Scotch tape and Post-it notes said it would try to soften the blow by moving production and inventory around its network of 110 factories and 88 distribution centres, by cutting costs and by raising prices.
“We’re trying to be pretty smart, strategic and surgical about this,” Brown said.
At builder PulteGroup, chief executive Ryan Marshall said tariffs would add about $5,000 on average to the sale price of new homes.
“Whether it’s the volatility in the stock market, concerns about tariff-induced inflation, the fluctuation in interest rates or the growing talk of recession, demand in April has been more volatile and less predictable day-to-day,” Marshall told analysts.
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Aerospace and defence company RTX said it could suffer an $850mn hit to pre-tax operating profit from Trump’s tariffs if they remained in place to the end of the year. GE Aerospace said it would raise prices to help offset roughly $500mn in extra costs.
Executives have been responding to fast-changing US trade policy. Trump in early April suspended so-called reciprocal tariffs against most countries for 90 days hours after they took effect, while raising tariffs on China.
He plans to spare carmakers from some tariffs, the Financial Times reported on Wednesday.
TCW’s Purdy said chief executives were stuck in a kind of suspended animation as trade policy changes. “They don’t know if they’re going to wake up in six months into an entirely new world order, or if this is going to feel like a really bad dream,” Purdy said.
Reporting by Gregory Meyer, George Steer, Jamie Smyth, Peter Wells, Zehra Munir, Will Schmitt and Demetri Sevastopulo
