NEW YORK — Concerns surrounding tariffs persist as companies reveal financial outcomes and forecast their strategies moving forward.
Several tariffs remain active against significant U.S. trading partners, though some have been delayed to allow for negotiation periods. This ever-changing tariff and trade landscape makes it challenging for businesses and investors to precisely estimate its effects on costs and sales.
Hardly any industry remains unaffected by this uncertainty. Companies in sectors such as food and beverage, pharmaceuticals, and household goods are among those evaluating the potential implications on their expenses and revenues.
A recent survey highlights that businesses are justified in concentrating on tariffs, with nearly six out of ten American adults expressing significant concern about rising grocery costs in the coming months. Furthermore, about 50% are seriously apprehensive about the expenses related to significant purchases like vehicles, cellphones, and appliances.
Here’s how some companies are responding to tariff challenges and their expected impact:
Procter & Gamble
Procter & Gamble, recognized for products like Crest toothpaste, Tide detergent, and Charmin toilet paper, announced on Thursday that it is taking various measures to mitigate rising costs from wide-ranging tariffs introduced during President Donald Trump’s tenure. Methods range from altering sourcing strategies to modifying product formulations to circumvent duties.
However, Andre Schulten, P&G’s Chief Financial Officer, indicated during a call with reporters that the company might still need to pass these elevated costs onto consumers starting as soon as July. The company revised its annual financial expectations downward after reporting declining sales in regions like the U.S. and Western Europe, attributed to reduced consumer spending related to tariff anxieties and broader financial concerns, including those about employment stability and mortgage rates.
Schulten commented, “Everything influences consumer behavior—their uncertainties about the stock market, the value of their 401k plans and portfolios, as well as concerns about the economic outlook and employment market.”
Pepsi
PepsiCo revised its annual profit estimates downward due to heightened expenses from tariffs and reduced consumer spending. Known for its beverage and snack brands, PepsiCo now anticipates its core earnings per share will match last year’s figures, down from an earlier expectation of moderate growth. A 25% tariff on imported aluminum significantly impacts PepsiCo and other beverage producers. The company anticipates “elevated levels of volatility and uncertainty” through the remainder of the year.
Merck
Merck has adjusted its annual earnings projection, although its revenue forecast remains stable. The pharmaceutical leader, with roughly half of its revenue derived from the U.S. market, predicts existing tariffs will cost around $200 million.
American Airlines
Owing to economic uncertainties, American Airlines retracted its yearly earnings predictions. Though tariffs might not directly affect aviation or travel industries, they could alter consumer spending patterns. As tariffs tend to inflate prices, consumers may opt to tighten their budgets, prioritizing essential over discretionary expenses like travel.
Southwest Airlines
Due to waning demand, Southwest Airlines plans to reduce its flight schedule for the latter half of the year. The airline also announced it couldn’t reaffirm its financial outlook for 2025 and 2026 due to the “current macroeconomic uncertainty.”
Dow
Chemical conglomerate Dow forecasts a deceleration in business and consumer purchases attributed to tariff-induced economic uncertainty. CEO Jim Fitterling noted the global markets are waiting for clearer outcomes from ongoing tariff and trade discussions. In response, Dow is postponing the construction of a new facility in Alberta, Canada, expecting capital expense savings of approximately $1 billion. The company is also expanding its evaluation of existing assets in Europe, including sites in Germany and the U.K.