Global firms face $35B tariff hit but trade deals ease pressure

Multinational corporations reported more than $35 billion in expenses as they prepare for their third-quarter earnings results due to US president Donald Trump’s tariffs. However, after several considerations, several of them have lowered their earlier predictions following new trade deals, which are lessening their exposure to these tariffs.

Trump ignited a trade war which resulted in a significant increase in US tariffs to their highest rates ever recorded since the 1930s. Additionally, he has frequently threatened to impose even more taxes on US trading partners.

Still, this uncertainty that previously held back many businesses is beginning to fade. This has enabled executives to better estimate expenses and establish effective business strategies such as some price hikes.

Trump’s trade deals sparks hope for the stabilization of global firms 

Earlier,  an analysis from a reliable source that analyzed various statements from companies, regulatory filings, and earnings calls from July 16 to September 30 revealed that firms had anticipated a total financial impact ranging from $21 billion to $22.9 billion for 2025. For 2026, they had estimated a total financial effect of around $15 billion.

When global companies reported the overall amount exceeding $35 billion, reports highlighted that this figure was slightly above the $34 billion recorded in May after Trump’s “Liberation Day” tariffs in April which interfered with the international supply chain. However, it is worth noting that this increment primarily reflects Toyota’s estimate of $9.5 billion.

Many other companies, on the other hand, have drastically reduced their previous pessimistic forecasts after Trump struck lower-rate trade deals with Japan and the EU. These prediction figures consist of both annual and partial-year estimates from a group of about 60 companies that had shared some of their data.

Examples of companies that reduced their predictions include: French spirit producers Remy Cointreau and Pernod Ricard. Both arrived at the decision to lower their expectations for the effects of US tariffs after the EU agreement. Meanwhile, Sony reduced its forecast in August.

Apart from striking trade deals with US trading partners, Trump also made some exceptions like only around a third of Brazil’s exports would encounter a 50% tariff. With this positive outlook, the Chief Executive Officer of Stellantis, Antonio Filosa acknowledged that tariffs are becoming clearer.

He further highlighted that they believe these tariffs will just be another factor they need to run their business, asserting that they will be prepared for that during a mid-October interview.

Afterwards, Filosa shared new details regarding a $13 billion investment over four years in US manufacturing. Interestingly, Stellantis had cautioned about a loss of 1.5 billion euros in July this year.

Andrew Wilson raises concerns surrounding Trump’s tariff policies 

Andrew Wilson, Deputy Secretary General of the International Chamber of Commerce expressed his belief that there is a feeling that they have attained some sort of stable point with the existence of certain trade deals.

However, Wilson raised concerns that there will still be a lot more complexity and substantial uncertainties. He gave an example of Trump’s recent shift in stance when he suggested the imposition of an additional 100% tariff on China, but later stated that these tariffs would not be sustainable and blamed Beijing for recent trade conflicts between the two nations.

In the meantime, S&P 500 firms are predicted to encounter an earnings growth rate of about 9.3% from July through September. This percentage is lower than the 13.8% growth in the second quarter, according to LSEG data.

This slowdown is primarily due to the US tech sector, which is being driven by major investments in AI. In Europe, the Stoxx 600 index is expected to rise by a mere 0.5%, down from 4% last quarter.

The biggest challenges are hitting companies that rely on trade with countries that lack trade agreements.

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