Christoph Steitz, Marie Mannes and Helen Reid
Frankfurt/Stockholm/London – Gartong and Volvo Cars abandon guidance, Adidas warned that prices rose, and Porsche and Electrolux cut their views on the whole year on Tuesday as the trade war between U.S. President Donald Trump continues to send the cold craze through the corporate world.
The outbreak of negative news will add to evidence that trade chaos is causing significant losses to companies, forcing many to cut spending or consider moving production, capping supply chains, and making plans beyond immediate deadlines difficult to plan.
Trump imposed uncertainty on promoting tariffs and subsequent temporary suspension, which also hurt consumers with fewer consumers, raising concerns about a sharp economic downturn in the United States and beyond.
World stocks and the dollar rose on Tuesday after the Trump administration said it planned to lower the impact of certain auto tariffs, but the market was far from recovering the huge losses suffered after the April 2 tariffs were imposed. {MKTS/Glob]
A company earnings announcement on Tuesday showed trade policy continued to cause damage.
“We think the future impact of tariffs may be big,” General Motors Chief Financial Officer Paul Jacobson said in the media after the U.S. automaker (Carmaker) predicted its full-year forecast.
“We tell people not to rely on previous guidance and we will update when we get more information about tariffs.”
German sports car maker Porsche said it suffered at least €100 million in April and May due to our taxes on car imports.
“There’s so much volatility, there’s a lot of information coming, some of which are reliable, some of which are not,” said Jochen Breckner, Porsche AG CFO.
If the tariffs remain, he said, Porsche would have to pass it (at least in part) on price increases.
Tariffs are expected to increase automobile prices for U.S. consumers by thousands of dollars, reducing demand and build-up pressure on the already struggling auto industry, while the transition to electric vehicles slows.
Porsche and Volvo Cars have also withdrawn guidance for the next two years, being one of the 25% tariffs on car imports – Porsche does not have most cars produced in the United States and sold by Volvo ships from Europe.
This means that Porsche will hardly reduce or restrict the liability for foreign cars used in foreign cars and tariffs on foreign parts.
“We have to wait until the negotiations are completed,” Breckner said.
Reuters analysis shows that about 40 companies around the world retreated or cut forecasts in the first two weeks of the first-quarter earnings season.
Adidas CEO Bjorn Gulden said the company will be on the track “in the normal world” after last week’s quarterly results, but that tariff uncertainty prevented its revenue.
“We don’t know what the final tariff will be given the uncertainty of negotiations between the United States and different exporters. So we can’t make any “final” decisions about any “final” decisions about what to do,” Goulden said on Tuesday.
Trump announced high tariffs in most countries in early April and has since been withdrawing some alternations, while threatening additional industries specific to freight, pharmaceuticals and semiconductors.
HSBC said the impact of the global trade war could reach loan demand and credit quality, which is the most obvious warning of a major bank about how the ripple of Trump’s tariff action hurt lenders.
Other companies are scrambling to cut costs.
Volvo Cars announced plans to cut spending by about $1.8 billion and said it would restructure its operations as its first-quarter profits fell, sending its stock down more than 10%.
German engine maker MTU Aero said late Monday it was looking for ways to mitigate the impact of tariffs estimated to be in the mid-to-high double-digit range this year.
Electrolux joins a household name chorus from Nestle and Unilever to Chipotle, reducing its outlook for the North American market and reporting a smaller first-quarter profit than expected.
The Swedish appliance maker said: “Consumers moved to lower prices. Its stock fell more than 10% in morning trade, the biggest fallen in Europe.
Jacob Aarup-Andersen, CEO of Danish winemaker Carlsberg, responded to this view.
“History tells us that extended uncertainty will lead to consumer buying decisions,” he told Reuters.
This article was generated from the Automation News Agency feed without the text being modified.
