Photo by SevenStorm JUHASZIMRUS
Company executives from prominent US companies are expressing concerns regarding the effects of tariffs on their businesses and the broader economy. Technology leader Intel, footwear manufacturer Skechers, and consumer goods company Procter & Gamble have either revised their profit projections downward or retracted them altogether due to economic uncertainty. President Donald Trump has been attempting to recalibrate trade relations with major partners by imposing significant tariffs to encourage negotiations. Although no new trade agreements have been established between the US and other nations, there are indications of progress in discussions with South Korea.
The unpredictable trade policies in the US and elsewhere, along with regulatory risks, have heightened the likelihood of an economic downturn, with recession probabilities increasing, stated Intel’s Chief Financial Officer, David Zinsner, during an investor call. He noted, ‘We will certainly see costs increase,’ as the California-based company released pessimistic profit and revenue forecasts. Following these comments, Intel’s stock fell by over 5% in after-hours trading.
In addition to the technology sector, Skechers also let down investors, leading to a decline in its shares after retracting its annual earnings forecast. ‘The current environment is simply too dynamic to plan results with reasonable assurance of success,’ remarked Skechers’ Chief Operating Officer, David Weinberg, during a post-earnings call. Like its competitors Nike, Adidas, and Puma, Skechers relies on factories in Asia, particularly in China, for production. Procter & Gamble executives also indicated that tariffs could result in increased prices for consumers.
The producer of brands such as Ariel, Head & Shoulders, and Gillette mentioned it was contemplating price adjustments to offset the additional costs of materials sourced from China and other regions, while also projecting lower sales growth for the year than previously anticipated.
Andre Schulten, the financial chief of P&G, stated, “We will seek every opportunity to lessen the impact,” and noted that adjustments to “some level of consumer pricing” will be made. Seven & I, the Japanese parent company of 7-Eleven convenience stores, has also reported feeling the effects of trade tensions. North America represents over 70% of its sales.
Stephen Dacus, the incoming chief executive, expressed to the BBC the uncertainty the business is facing. He remarked, “We are unsure of the future tariffs. Recent news indicates significant changes, making it challenging to comprehend the ultimate impact.” He further stated, “Reducing prices while compromising quality is generally ineffective… thus, it is essential to discover methods to uphold quality while reducing costs.” This sentiment aligns with a growing number of companies worldwide that have cautioned about the repercussions of Trump’s trade policies.
On Friday, South Korean automotive giant Hyundai announced the establishment of a task force to address the consequences of tariffs. The company indicated, “We anticipate a difficult business environment due to escalating trade conflicts and various unpredictable macroeconomic factors,” and mentioned the possibility of relocating some manufacturing operations outside of South Korea. Hyundai has already transferred some production from Mexico to the United States, which constitutes approximately one-third of its global sales.
Meanwhile, there are indications that discussions on Thursday between US and South Korean trade officials in Washington DC, aimed at tariff removal, have yielded positive results. US Treasury Secretary Scott Bessent described the meeting as “very successful.” He informed reporters, “We may be progressing more swiftly than anticipated, and we will engage in technical discussions as early as next week.” South Korea’s industry minister, Ahn Duk-geun, who participated in the talks, shared Bessent’s optimism and mentioned that they are striving for a “July package.”
