Filenews 5 August 2025
Erik Sherman
Economists have often changed their minds about the implications of Donald Trump's "tariff" strategy. The situation is still changing. It is difficult to know the consequences. There are too many changes in a very short period of time. Let's look at a summary of the companies' experience so far.
The information comes from video conferences on corporate results provided by S&P Global Market Intelligence, i.e. directly from the companies and not through some "filter". Keep in mind that company executives will always present things in the most positive way when addressing analysts and investors.
Why is this information important? Many people "easily" ignore the financial problems faced by a large company. But the effects are spreading. This could mean that workers will lose their jobs, the economy will weaken, stock prices will fall, and, eventually, retirement accounts will suffer negative impacts.
Steven Madden Ltd.: The chairman and CEO of the footwear company, Edward Rosenfeld, said during the recent video conference on the financial results: "The pressure on the gross profit margin from the tariffs was about 230 basis points. It's not the gross thing. It is the net after the discount we received from suppliers for the second quarter". The 2.3 percentage points is a significant drop in profits.
General Motors: In the second quarter, the net effect of the tariffs was $1.1 billion. This amount is "slightly lower" than expected, as reported in the video conference for the results. "Mitigation efforts will take time to yield results, limiting the impact of tariffs in the second quarter," GM Chief Financial Officer Paul Jacobson commented. "However, we are still seeking to make up at least 30% of the losses as a result of tariffs for the year, which amounts to €4-5 billion through strategic actions, such as production adjustments, targeted cost reduction initiatives, and consistent pricing."
W.W. Grainger: The company that distributes products and provides maintenance services, with a market capitalization of €44.8 billion was hit. "You can see the strong performance of the second quarter, including sales of $4.6 billion. increased by 5.1%," CFO Deidra Merriwether commented during the video conference call on the company's results on August 1, 2025. "We observed a decrease in gross profit margin due to the composition of the segments and the above-mentioned impact of duties on the High-Touch business, including disruptions from the LIFO [last in, first out] accounting inventory. This led to a profit margin of 14.9% for the quarter, a decrease of 50 bps compared to 2024, but close to the expectations we had announced."
PVH Corp.: The company that owns brands such as Tommy Hilfiger and Calvin Klein noted on the impact of the tariffs on a video conference call on the company's results on June 5, 2025. "We are facing the effects of tariffs. According to our latest estimate, we estimate that the tariffs create a barrier of around €65 million EBIT [earnings before interest and taxes] which is mainly weighted in the second half of the year," said CEO Stefan Larsson.
CNH Industrial: "While tariffs on Chinese products have been reduced, tariffs on steel and aluminium have doubled from 25% to 50%," said the CFO of the company that produces agricultural and construction machinery, James Nickolas, during the video conference for the financial results on August 1, 2025. "And while CNH sources about 95% of its immediate steel needs from domestic sources, domestic steel prices have risen along with tariffs. Steel futures have strengthened by 30% since the beginning of the year," which shows how tariffs give domestic suppliers room to raise prices and make a bigger profit. "And while we are working with our suppliers to stabilize steel prices, a 'tier 2' supplier may have steel that affects the cost of procurement," he continued. "We are still calculating the impact that tariffs imposed on U.S. copper imports and potentially semiconductor chips will have on our business in 2025."
Ford Motor Company: The automaker expects "net losses of about $2 billion." in 2025" due to tariffs, CEO James Farley said. The company is a prime example of how tariffs are becoming a vital factor in decision-making. "The latest round of tariff policies, especially the agreements with Japan and Europe and possibly South Korea, makes our strategy even more imperative. Our bet is not to compete in high-volume departments that usually require overseas production to be cost-competitive. Instead, we're stepping up our efforts on what we do best: trucks, iconic products with passion, Ford Bros, and cutting-edge technology that you'll soon see in our upcoming EV lineup." Farley said. For her part, CFO, Sherry House, said the tariffs had an impact of $800 million in adjusted EBIT. Custom performance is normal indicators that are redefined by companies, often to influence the audience.
Amazon.com: In the video conference call on the financial results on July 31, 2025, the company raised the issue of uncertainty and how difficult it can be to follow what is happening or decide how to move forward. "It's hard to know where the tariffs will end up, especially in China," CEO Andrew Jassy said. "It is difficult to know what will happen when we exhaust part of the pre-purchases in our retail sales from our own store and, then, part of the pre-purchases made by our partners. And if costs increase over time, we're not sure at this point who will ultimately absorb the higher costs. What we can say is that from what we have observed so far in the first half of the year, there is no decrease in demand. We also haven't seen an increase in the average selling price (ASP) on a large scale. However, this may change in the second half of the year. There are many things we don't know, that's what we've seen so far."
It seems that the second half of 2025 may have many surprises in store when it comes to tariffs. And all this from the point of view of the big companies. The impact on smaller companies that didn't have purchasing power, didn't have the resources to build inventory, and are private, meaning their problems aren't made public, won't be heard in the earnings releases.
