Global companies have flagged more than $35bn in costs from US tariffs heading into third-quarter earnings, but many are lowering their initial forecasts as new trade deals reduce exposure to President Donald Trump’s levies.
Trump’s trade war has hiked US tariffs to their highest levels since the 1930s, and the president has regularly threatened more duties, but overall, the fog that paralysed many businesses is clearing, allowing executives to forecast costs and make plans — including some price hikes.
Companies expected a combined financial hit of $21.0bn to $22.9bn for 2025, with an impact of nearly $15bn calculated for 2026, according to a Reuters analysis of hundreds of corporate statements, regulatory filings and earnings calls between July 16 and September 30. The total of more than $35bn compares with $34bn tallied in May, shortly after Trump’s “Liberation Day” tariffs in April rattled global supply chains. But the trajectory masks a shift: the increase is largely due to Toyota’s $9.5bn estimate.
Many other companies have lowered their earlier worst-case forecasts after Trump reached lower-rate trade deals with the EU and Japan. The figures combine annual and partial-year estimates from an overlapping group of firms. Both groups include about 60 firms. Sony in August cut its forecast.
Trump also carved out exceptions, with only about a third of Brazil’s exports facing a 50% tariff, for instance. “Tariffs are getting clearer and clearer. And we believe that tariffs will be just another variable of our business equation that we need to be ready to manage, and we will,” Stellantis CEO Antonio Filosa told Reuters in a mid-October interview, introducing new details of a $13bn, four-year investment in US manufacturing. Stellantis in July warned of a 1.5bn-euro hit from US tariffs this year.
“I think there is this sense that we reached a kind of landing point with some of the bilateral trade deals,” said International Chamber of Commerce Deputy Secretary General Andrew Wilson.
“But there will continue to be much greater complexity and this massive uncertainty.”
S&P 500 companies are projected to show an earnings growth rate of 9.3% in the July-September period, a decline from 13.8% in the second quarter, according to LSEG data. Much of that is on the back of the US IT sector, driven by AI investment. Europe’s Stoxx 600 is expected to clock 0.5% growth, down from 4% in the previous quarter.
The pain is concentrated on companies that depend on countries that do not have trade deals. Nike, heavily dependent on suppliers in Vietnam and other Asian countries, raised its tariff impact estimate late last month to $1.5bn from $1bn. In Europe, Tefal kitchen-ware maker SEB recently cut its profit outlook, citing weaker demand as customers adopted a wait-and-see attitude partly due to tariffs, while H&M cautioned that US tariffs on imports would weigh more heavily on margins in the quarter through November.
Price increases are the most frequent effect of tariffs cited by companies in the Reuters tracker. Carmakers including Ford, Stellantis, Volkswagen and Toyota collectively have reported billions in tariff-related costs. Ford, for instance, is expecting a cumulative $3bn impact
Still, optimism has ticked up among automakers and auto parts suppliers as Trump has moved toward significant tariff relief for US auto production that could effectively eliminate many of the costs that have hit top car companies.
Drug makers also have started rolling out deals on drug pricing and manufacturing that are tied to US tariff exemptions. Pfizer and AstraZeneca have led the way, and others are expected to follow. – Reuters