Trump’s Trade War Costs Global Companies Over $34 Billion in Lost Sales and Higher Expenses, Reuters Analysis Reveals
President Donald Trump’s trade war has already cost major global companies more than $34 billion in lost sales and increased expenses, according to a Reuters analysis of corporate disclosures. This financial toll is expected to escalate as the persistent uncertainty surrounding tariffs paralyzes decision-making processes across some of the world’s largest corporations.
Companies spanning the United States, Asia, and Europe, including prominent names like Apple, Ford, Porsche, and Sony, have either reduced or entirely withdrawn their profit forecasts. A vast majority of these businesses attribute this inability to accurately estimate costs directly to the unpredictable nature of Trump’s trade policies. The $33 billion figure, compiled by Reuters through a review of company statements, regulatory filings, and conference call transcripts, represents initial estimates from 32 S&P 500 companies, three from Europe’s STOXX 600, and 21 from Japan’s Nikkei 225 indices.
Experts warn that the true cost to businesses is likely significantly higher than what has been publicly disclosed. Jeffrey Sonnenfeld, a professor at the Yale School of Management, estimates the actual magnitude could be “multiple times” the current tally, potentially leading to even worse ripple effects such as reduced consumer and business spending, and increased inflation.
Unprecedented Uncertainty and Strategic Shifts
The current environment, where the range of potential future tariff outcomes is “unprecedented,” makes strategic planning incredibly challenging. This unpredictability is causing delays and even cancellations of investment decisions. While recent pauses in trade hostilities with China and a rollback of tariff threats against Europe have offered some relief, the ultimate form of trade deals remains unclear, especially with a U.S. trade court recently blocking some of Trump’s tariffs.
In response, strategists anticipate that companies will prioritize strengthening supply chains, boosting near-shoring efforts, and expanding into new markets, all of which will inherently drive up operational costs. Many companies themselves are grappling with the final financial implications. As the earnings season concludes, Reuters found that at least 42 companies have cut their forecasts, and 16 have completely withdrawn or suspended their guidance. For instance, Walmart declined to provide a quarterly profit forecast and announced price increases, drawing a rebuke from Trump. Volvo Cars withdrew its earnings forecast for the next two years, and United Airlines provided multiple forecasts, citing the impossibility of predicting the macro environment.
Trump’s Rationale and Economic Impact
President Trump has consistently argued that tariffs will reduce America’s trade deficit, encourage companies to relocate operations and jobs back to the U.S., and compel countries like Mexico to curb illegal immigration and drug flows. White House spokesperson Kush Desai reiterated the administration’s stance that the U.S. “has the leverage to make our trading partners ultimately bear the cost of tariffs.”
However, corporate earnings calls from January to March underscore the widespread concern: 72% of S&P 500 companies mentioned tariffs, a sharp increase from 30% in the previous quarter. Similarly, mentions surged among companies on the STOXX 600 and Nikkei 225. Rich Bernstein, CEO of Richard Bernstein Advisors, commented that corporations lack “an awful lot of visibility about anything in the future,” leading many to withhold guidance due to the uncertain world.
Wall Street analysts are now projecting a significant slowdown in net profit growth for S&P 500 companies, with an average of 5.1% per quarter from April to December, down from 11.7% a year prior.
Industries Hit Hardest and Cost-Cutting Measures
Automakers, airlines, and consumer goods importers have been among the most severely impacted. Tariffs have driven up costs for raw materials and components like aluminum and electronics, making global manufacturing processes, especially for complex products like cars, more expensive due to sprawling supply chains. Relocating production to the U.S. also entails higher labor costs.
For example, Kleenex maker Kimberly Clark slashed its annual profit forecast last month, anticipating approximately $300 million in tariff-related supply-chain costs this year. While the company also announced a $2 billion investment over five years to expand U.S. manufacturing capacity (not included in the Reuters tally), it highlights a dual strategy. Similarly, Apple and Eli Lilly have announced U.S. investments. Meanwhile, Diageo, the maker of Johnnie Walker and Don Julio, announced plans to cut $500 million in costs and dispose of substantial assets by 2028, estimating a $150 million annual hit to its operating profit from a 10% tariff on imports from the UK and EU.
As Zak Stambor, an analyst with eMarketer, put it, “Tariffs could significantly drive up the cost of a nice night out – or even a cozy night in,” underscoring the widespread consumer impact.
Click here for more info on Finance and Investing