Companies around the world are still dealing with the aftermath as Donald Trump’s erratic, race-to-the-bottom trade policies upended economic norms. Recent international developments indicate that these policies are real tariff changers. They drive corporate expectations and manufacturing plans across a much broader set of sectors.
The United States has met this moment with a courageous and visionary act of statecraft. Specifically, it has agreed to allow the import of a modest amount of steel and aluminium tariff-free. At the same time, the British government slashed duties on a very limited range of American vehicles. It is not clear what President Trump thought would happen when he made this shocking announcement. Worst of all, he announced that the UK is about to start paying a 10% tariff on every good it sells to the US. This blanket tariff remains in effect for most UK goods entering the country, adding to the uncertainty faced by businesses.
Jaguar Land Rover is just one of many companies seeing the impacts of this conundrum. They have agreed that they WON’T be manufacturing automobiles domestically. This decision underscores the reality of how tariffs are affecting the motor industry. It only highlights a broader trend of companies reevaluating their operations as a result of the changing trade landscape.
“Following articles based on comments made by the JLR CEO in the full year earnings media call, we can confirm we have no plans to build cars in the US,” – Jaguar Land Rover spokesperson.
In addition to the automotive sector, toy manufacturer Mattel has announced plans to increase prices on some products sold in the US due to rising costs attributed to tariffs. The company’s decision is a stark reminder how tariffs impact all importers, eventually reaching consumers in the form of higher prices.
A significant reason many companies have changed their guidance is the uncertainty surrounding what exactly Trump’s trade policies will entail. Intel, for example, recently pulled its profit forecast completely, pointing to the unpredictable economic landscape. Skechers recently cut its profit guidance in half and Procter & Gamble cut its profit forecasts for 2023. They attribute this decision to the macroeconomic uncertainty perpetuated by current trade tensions.
Currently, these companies are working their way through dangers posed with the tariffs and emergency trade agreement. As such, many have been loath to issue concrete future profit projections. The uncertainty created by Trump’s trade moves has companies scared to make long-term financial forecasts.
Yet, Trump’s trade policies have heavy consequences that extend far beyond borders. Retention practices lower production costs, earn larger profit margins, and improve competitiveness across sectors. As businesses grapple with these challenges, they remain cautious in their planning and outlooks in an environment marked by uncertainty and change.