Top leaders from major US firms, including Intel and Procter & Gamble, have sounded alarms regarding the detrimental effects of tariffs on their businesses and the broader economy. They revealed that ongoing trade tensions and increased material costs are impacting their revenue predictions.
US Corporate Leaders Caution on Economic Fallout from Tariffs
US Corporate Leaders Caution on Economic Fallout from Tariffs
Executives express concerns over uncertain economic outlook as tariffs strain profit forecasts.
Top executives at leading US companies are sounding the alarm about the adverse effects of tariffs on both their industries and the economy at large. Firms such as technology giant Intel, footwear manufacturer Skechers, and consumer goods leader Procter & Gamble have either revised their profit projections downward or withdrawn them entirely due to ongoing economic uncertainty.
President Donald Trump's administration has employed steep tariffs to adjust trade dynamics with critical global partners. Although there are no new trade agreements currently in place, discussions with South Korea have shown potential for advancement.
Intel's Chief Financial Officer, David Zinsner, highlighted during an earnings call that the changing trade policies and regulatory issues significantly heighten the risk of an economic downturn, increasing the likelihood of a recession. As a result, Intel projects that costs are bound to rise. Following these statements, Intel's shares declined by over 5% in after-hours trading.
Skechers echoed similar sentiments, announcing to investors that the current volatile market conditions prevent accurate profit forecasts. The company's shares dropped after retracting its annual outlook, with COO David Weinberg noting, "The current environment is simply too dynamic from which to plan results with a reasonable assurance of success." Like competitors Nike and Adidas, Skechers relies heavily on manufacturing in Asia, especially China.
Procter & Gamble executives also indicated that tariffs could force higher consumer prices, as the firm assesses how it can recoup increased costs of materials procured from China and elsewhere. Financial Chief Andre Schulten mentioned potential adjustments to pricing, citing a revision in expected sales growth for the year.
These developments align with a growing trend of global companies expressing concern over the impact of Trump’s trade policies. In parallel, reports indicate productive dialogue between US and South Korean officials aimed at tariff reductions. Treasury Secretary Scott Bessent characterized their recent meeting as "very successful," raising hopes for a prompt resolution. Meanwhile, with a 90-day reprieve on elevated tariffs due to conclude on July 8, negotiations intensify as over 70 countries have expressed interest in discussions since the tariffs were implemented.
Through these shifts, it's evident that US corporate leaders are increasingly wary of the repercussions tariffs may have on the economy, positioning the future of trade relations as a significant factor for global markets.
