Top executives from prominent U.S. companies are raising alarms about the adverse effects tariffs are having on their businesses as well as the broader economy. Major firms, including tech leader Intel, footwear manufacturer Skechers, and consumer goods giant Procter & Gamble, have either reduced their profit outlooks or completely withdrawn them in light of growing economic uncertainty.
In an effort to recalibrate trade relations with key international partners, U.S. President Donald Trump has utilized steep tariffs as a negotiating tool. However, no new trade agreements have been finalized as of yet, although there are indications of progress in discussions with South Korea.
“The very fluid trade policies in the US and beyond, as well as regulatory risks, have increased the chance of an economic slowdown with the probability of a recession growing,”
noted Intel’s Chief Financial Officer, David Zinsner, during an investor call. He further stated, “We will certainly see costs increase,” following the company’s announcement of dismal profit and revenue forecasts. Intel’s stock plummeted by over 5% in after-hours trading after these comments.
Widespread concerns across industries
Skechers, another name in the retail sector, also disappointed its investors after retracting its annual results forecast, leading to a drop in its stock price. Chief Operating Officer David Weinberg remarked, “The current environment is simply too dynamic from which to plan results with a reasonable assurance of success.” The company, which sources production primarily from Asian factories, particularly in China, is facing similar challenges as other footwear brands such as Nike, Adidas, and Puma.
Procter & Gamble (P&G) executives have indicated that tariffs are likely to result in increased prices for consumers. The parent company of well-known brands like Ariel, Head & Shoulders, and Gillette mentioned it is reviewing its pricing structure to compensate for the heightened costs of materials obtained from China and elsewhere. Financial Chief Andre Schulten stated, “We’ll be looking for every opportunity to mitigate the impact,” while also acknowledging that some adjustments to consumer pricing would be necessary.
Global impact and future outlook
The Japanese corporation Seven & I, which owns the 7-Eleven convenience stores, is also grappling with the repercussions of ongoing trade tensions. With North America accounting for over 70% of its sales, incoming Chief Executive Stephen Dacus expressed uncertainty regarding the future impact of tariffs, stating, “We don’t know what those tariffs are going to be. We’ve seen some news recently where they have changed quite a bit so it’s a little bit difficult to understand what the ultimate effect is.” He emphasized the challenge of maintaining quality while reducing costs.
This sentiment is echoed by a growing number of companies worldwide that have voiced concerns about the ramifications of Trump’s trade policies. South Korean automotive giant Hyundai announced the establishment of a task force to devise strategies for managing the fallout from tariffs. The company anticipates a continued challenging business environment due to escalating trade conflicts and various unpredictable macroeconomic factors. Hyundai is also contemplating relocating some manufacturing operations out of South Korea, having already moved part of its production from Mexico to the U.S., which represents about a third of its global sales.
On a more positive note, recent discussions between U.S. and South Korean trade officials in Washington, D.C., aimed at tariff relief, have shown promising developments. U.S. Treasury Secretary Scott Bessent described the meeting as “very successful,” suggesting that progress might be made quicker than anticipated, with technical discussions possibly beginning as early as next week. South Korean Industry Minister Ahn Duk-geun echoed this optimism, indicating efforts are underway for a “July package” as the 90-day pause on higher tariffs affecting multiple countries approaches its expiration on July 8. Trump has noted that over 70 nations have initiated negotiations since the tariffs were implemented.