Here’s How $260 Billion of Tariffs Are Biting Third-Quarter Profit

Published: | Updated: October 23, 2018

The trade war is getting real for many more companies.

The first round of tariffs on Chinese imports imposed by President Donald Trump -- and China’s $60 billion retaliatory duties on U.S. imports -- went into effect in the third quarter. And now those costs are showing up in companies’ results. Some, like United Technologies Corp., are calling out how they are hurting profits, while others, such as Polaris Industries Inc., are putting pressure on suppliers to share in the pain.

This is on top of Trump’s tariffs on steel and aluminum earlier in the year. And there are more coming, with the White House planning to more than double the duty rates for $200 billion worth of Chinese goods on Jan. 1.

In any war, it pays to look not only at intended targets but also any collateral damage. So far, a review of corporate earnings results and conference-call transcripts suggests the number of large global companies harmed by higher tariffs is exponentially larger than those that are helped by them. And the effects extend well beyond the U.S.: In September, BMW AG confirmed profit will fall in 2018, in part because of the trade war, while Volvo Cars delayed its IPO and is in a quandary over its new factory in South Carolina that was supposed to export some cars to China.

To get a sense of how the new duties on imports are affecting the economy, we’re compiling the experiences and forecasts of companies around the world. Tariffs are affecting businesses big and small, but to keep it simple we’re focusing here on a representative group of large, widely recognizable companies.

We’ll continue to update and revise this list while Trump and his counterparts in Europe, North America and Asia look for a resolution to their disputes.

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  1. Oct. 30, 2018
    • U.S. | Consumer products

      Steve Madden: The shoe and handbag maker is preparing for the tariff to rise to 25% in January from 10%, creating an added $30 million headwind. Currently it sources only 16% of the affected goods from outside China; it’s now targeting to raise that to 40% or 50% next year, with Cambodia a big beneficiary.

      Based on a 10% U.S. tariff on handbags

      Related Story ⭢

    • U.S. | Automotive

      Cummins: The diesel and natural-gas engine maker says it’s seeing $250 million in annual impact -- $150 million through direct tariffs and $100 million through higher costs of metals used in its products. It’s moving some alternator production from China to India to help reduce direct tariffs.

      Based on a U.S. tariff on metals, auto parts

      Related Story ⭢

  2. Oct. 26, 2018
    • Sweden | Household appliances and tools

      Electroux: The Swedish vacuum maker sees the negative year-over-year effect from raw materials, tariffs and currency to be approximately 3 billion krona ($328 million) in 2018, up from about 2.7 billion krona.

      Based on a 10% China tariff on vacuum cleaners

      Related Story ⭢

  3. Oct. 25, 2018
    • U.S. | Household appliances

      Whirlpool: The appliance maker expects raw-material inflation and tariff costs or $350 million this year, in addition to tariffs on imported motors and electronics. It expects $300 million in raw-material tariff-related inflation next year.

      Based on a U.S. tariff on metals, components

      Related Story ⭢

    • U.S. | Household appliances and tools

      Stanley Black & Decker: The toolmaker will raise prices for consumers and work to trim $250 million in operating expenses for 2019, It faced a $50 million increase in quarterly costs, forcing it to cut its 2018 earnings forecast by 25 cents at the mid-point.

      Based on a China tariff on metals, components

      Related Story ⭢

  4. Oct. 23, 2018
    • U.S. | Automotive

      Harley-Davidson: Harley executives said they should be ready by early next year to share plans to mitigate the impact of tariffs that will cost the company as much as $48 million in 2018.

      Based on a 25% EU tariff on Motorcyles

      Related Story ⭢

    • U.S. | Industrial

      3M Co.: The maker of industrial, safety, health-care and consumer products sees $100 million in ``headwinds’’ from tariffs but has been able to compensate by raising prices. The negative full-year drag of raw-material costs is seen now at 15 cents a share, more than prior range of as much as 10 cents.

      Based on a U.S. tariff on raw materials

      Related Story ⭢

    • U.S. | Industrials

      United Technologies: Expects 5-cent/share headwind this year, offset by price increases, and 15 cents next year. Much of the impact is in imported climate-control and safety equipment like carbon monoxide detectors.

      Based on a U.S. tariff on Climate controls

      Related Story ⭢

    • U.S. | Industrials

      Caterpillar: Shares tumbled after the construction equipment maker warned of rising costs. Tariff impact was about $40 million in third quarter; full-year effect is seen at the low-end of the range of $100 million to $200 million.

      Based on a U.S. tariff on Materials

      Related Story ⭢

  5. Oct. 22, 2018
    • U.S. | Automotive

      Polaris: Maker of motorcycles and snow machines said suppliers must help offset tariff costs if they want to keep doing business with Polaris. Left its guidance for 2018 tariff costs unchanged at $40 million.

      Based on a U.S. tariff on Motorcycle, ATV parts

      Related Story ⭢

  6. Oct. 18, 2018
    • U.S. | Building products

      Tile Shop: The rtile and flooring retailer gets half of its products from Asia and may cut that to 25 percent. Tariffs are a threat to its gross margin target of about 70 percent, especially if the current 10 percent tariff rises to 25 percent in January.

      Based on a 10% U.S. tariff on tile, flooring

      Related Story ⭢

  7. Oct. 16, 2018
    • U.S. | Consumer products

      Walmart: The giant retailer said tariffs are a threat to its efforts to be a low-price leader, and while it’s working to monitor margins, it’s possible some prices might rise. One-third of its goods come from outside the U.S.

      Based on a 10% U.S. tariff on consumer goods

      Related Story ⭢

  8. Sep. 27, 2018
    • Japan | Industrials

      Panasonic: The Japanese maker of products including solar panels and electric-vehicle batteries may consider moving some production out of China. The U.S.-China trade dispute will have “significant” impact on Panasonic, said Yoshio Ito, the head of its automotive business.

      Based on a U.S. tariff on Various, including auto parts

      Related Story ⭢

  9. Sep. 26, 2018
    • U.S. | Automotive

      Ford: Ford CEO Jim Hackett said tariffs on metals “took about $1 billion in profit from us.”

      Based on a U.S. tariff on Metals

      Related Story ⭢

  10. Sep. 25, 2018
    • U.K. | Energy

      BP: BP sees impact of about $100 million in the U.S. due to increased costs for steel, CEO Bob Dudley said.

      Based on a U.S. tariff on welded pipes

      Related Story ⭢

    • Germany | Automotive

      BMW: Trade conflicts are “feeding uncertainty,” hurting prices in several markets; sales, profit, margin forecasts cut.

      Based on a 40% China tariff on cars

      Related Story ⭢

  11. Sep. 17, 2018
    • China | Consumer products

      Samsonite: Wholesale buyers notified in a letter than a 10 percent price increase is imminent if the U.S. follows through with tariffs on Chinese goods on Sept. 24

      Based on a proposed 10% U.S. tariff on luggage, travel bags

      Related Story ⭢

  12. Sep. 10, 2018
    • Sweden | Automotive

      Volvo Cars: The Swedish car company, owned by Zhejiang Geely Holding Group Co., delayed a planned IPO amid trade tensions. China’s retaliatory tariffs against the U.S. are disrupting plans to export cars to China from a new factory South Carolina.

      Based on a China tariff on Cars

      Related Story ⭢

  13. Sep. 6, 2018
    • U.S. | Consumer products

      Walmart: In a letter to the U.S. Trade Representative, Walmart warns that the duties to be imposed Sept. 24 in the U.S. and China will raise prices for consumers and hurt profit margins for retailers and suppliers

      Based on a proposed 10% U.S. tariff on bicycles, Christmas lights, gas grills

      Related Story ⭢

  14. Aug. 29, 2018
    • Taiwan | Consumer products

      Giant Manufacturing: A 10 percent tariff would cost the industry an additional $100 million, and that figure would rise to $250 million if the duty rises to 25 percent, the company told the U.S. Trade Representative in a letter.

      Based on a proposed 10% U.S. tariff on bicycles

      Related Story ⭢

  15. Aug. 13, 2018
    • Singapore | Agricultural products

      Wilmar International: Company says trade tensions between the U.S. and China improved short-term crush margins, contributing to a jump in second-quarter profit. Still, it warned that a prolonged dispute would negatively impact margins due to lower plant utilization.

      Based on a 25% China tariff on soybeans

      Related Story ⭢

  16. Aug. 8, 2018
    • Japan | Automotive

      Yamaha Motor: Sees several hundred million yen in negative impact starting next quarter from U.S. tariffs on Chinese-made engines; sees 1 billion yen impact on U.S.-made boats exported to Canada and Europe starting next summer.

      Based on a 25% U.S. tariff on engines

      Related Story ⭢

  17. Aug. 6, 2018
    • U.S. | Consumer products

      Newell Brands: Maker of Rubbermaid containers, Crock-Pot and Sunbeam appliances, and Graco infant gear estimates $100 million annualized impact

      Based on a proposed 10% U.S. tariff on baby goods, appliances

      Related Story ⭢

  18. Aug. 3, 2018
    • Japan | Automotive

      Toyota: Said U.S. steel and aluminum tariffs cut full-year profit outlook by 10 billion yen ($90 million) and that any more levies would hurt its profit and sales outlook; on July 20 its North American chief said carmaker may have to stop importing some vehicles because of proposed U.S. tariffs

      Based on a 25% U.S. tariff on steel, aluminum

      Related Story ⭢

  19. Aug. 1, 2018
    • U.S. | Agricultural products

      Bunge: Posted a surprise loss after a wrong bullish bet on Chicago soybean futures, made on mistaken prediction the trade dispute would be brief and China would return as a buyer

      Based on a 25% China tariff on soybeans

      Related Story ⭢

    • Luxembourg | Materials

      ArcelorMittal: The world’s largest steelmaker trader reported the highest profit in seven years after tariffs on imports boosted prices for production for the company’s U.S. plants

      Based on a 25% U.S. tariff on steel

      Related Story ⭢

  20. July 31, 2018
    • Canada | Materials

      Stelco Holdings: Canadian steelmaker pegs cost of tariffs at C$11 million ($8.45 million) in the second quarter

      Based on a 25% U.S. tariff on steel

      Related Story ⭢

    • U.S. | Automotive

      Cummins: Lowered EBITDA forecast in part on expectation of $100 million in tariff-related higher costs in the second half

      Based on a 25% U.S. tariff on steel, aluminum

      Related Story ⭢

    • U.S. | Energy

      SunPower: Paid $17 million for tariffs in first half and expects $51 million in second half -- more than it spends on R&D; says it may exit some businesses and cut jobs

      Based on a 30% U.S. tariff on solar panels

      Related Story ⭢

    • U.S. | Consumer products

      Steve Madden: CEO predicts handbag prices will rise for U.S. consumers and weighs shifting production to Cambodia from China.

      Based on a proposed 10% U.S. tariff on handbags

      Related Story ⭢

  21. July 30, 2018
    • Germany | Automotive

      Daimler: Cut profit forecast on U.S.-China trade fight

      Based on a 25% China tariff on automobiles

      Related Story ⭢

    • Germany | Automotive

      BMW: BMW raised suggested retail prices of its X5 and X6 SUVs in China by 4% to 7%. The carmaker previously warned it wouldn’t be able to absorb China’s tariff increase completely.

      Based on a 40% China tariff on cars

      Related Story ⭢

    • U.S. | Industrials

      Caterpillar: Will boost prices to offset an expected $100 million to $200 million jump in tariff-related material costs in the second half.

      Based on a 25% U.S. tariff on raw materials

      Related Story ⭢

    • U.S. | Agricultural products

      Tyson Foods: Cut fiscal 2018 profit forecast to as low as $5.70 a share from range of $6.55-$6.70, citing tariffs’ negative effect on domestic and export prices, mainly for chicken and pork

      Based on a 25% China, Mexico tariff on meat and poultry

      Related Story ⭢

  22. July 27, 2018
    • U.S. | Industrials

      Eastman Chemical: Put a hold on a five-year effort to sell ethylene plants in Texas as prices fall and China erects barriers

      Based on a proposed 25% China tariff on chemicals, plastics

      Related Story ⭢

    • U.S. | Industrials

      Covanta: U.S. tariffs on imported steel helped raise its revenue forecast for metal it recycles from waste by $10 a ton, to $145-$175.

      Based on a 25% U.S. tariff on steel

      Related Story ⭢

  23. July 26, 2018
    • France | Industrials

      Schneider Electric: Tariffs on imports to the U.S. could affect earnings by as much as $23 million this year.

      Based on a 25% U.S. tariff on electrical equipment

      Related Story ⭢

    • South Korea | Automotive

      Hyundai Motor: Company is trying to minimize risks related to the potential U.S. tariff on imported cars and parts, and may increase local production of SUVs. Hyundai previously warned that the tax would be devastating and push up production costs at its Alabama plant by 10% a year.

      Based on a proposed 25% U.S. tariff on cars

      Related Story ⭢

  24. July 25, 2018
    • U.K. | Automotive

      Fiat Chrysler: Fiat cut profit and revenue targets partly because Maserati buyers delayed purchases due to China’s import duty

      Based on a 40% China tariff on cars

      Related Story ⭢

    • U.S. | Automotive

      Ford: Carmaker says it may incur as much as $300 million in extra costs this year due to escalating Chinese tariffs; Ford says it took a $300 million hit in the quarter because of pricier commodities such as steel and aluminum, whose costs have also been inflated by tariffs.

      Based on a 40% China tariff on cars

      Related Story ⭢

    • U.S. | Automotive

      General Motors: Cut forecast for year on surging prices for steel and aluminum as tariffs stoke demand. Could be forced to cut U.S. jobs if tariffs are applied to imported vehicles and auto parts.

      Based on a 25% U.S. tariff on steel and aluminum

      Related Story ⭢

    • U.S. | Consumer products

      Coca-Cola: Raised prices for soda and other beverages to offset higher costs for freight shipments and metals used in its bottling systems.

      Based on a 25% U.S. tariff on steel, aluminum

      Related Story ⭢

  25. July 24, 2018
    • U.S. | Energy

      Plains All American Pipeline: Company says tariffs will lead to an additional $40 million in the construction of a pipeline in the largest North American oil field.

      Based on a 25% U.S. tariff on steel

      Related Story ⭢

    • U.S. | Industrials

      Hexcel: Aerospace materials supplier expects a tariff impact of $2 million to $3 million on an annual basis related to imports from China.

      Based on a 25% U.S. tariff on aluminum

      Related Story ⭢

    • U.S. | Automotive

      Harley-Davidson: Cuts profit margin forecast for year. Earlier had announced plans to move production overseas, amid EU tariff costs of $100 million annually

      Based on a 25% EU tariff on motorcycles

      Related Story ⭢

    • U.S. | Household appliances and tools

      Whirlpool: Cites rising cost of raw materials contributing $50 million to $100 million to previous forecast for input-cost increases this year

      Based on a 25% U.S. tariff on steel, aluminum

      Related Story ⭢

  26. July 23, 2018
    • U.S. | Industrials

      Lincoln Electric: Maker of welding equipment and supplies is raising prices on so-called consumables via surcharges instead of permanent hikes because it’s not clear how long tariffs will be in place

      Based on a 25% U.S. tariff on steel, aluminum

      Related Story ⭢

    • U.S. | Industrials

      Illinois Tool Works: Tariffs seen representing about 10 percent to 15 percent of the higher cost of materials in 2018 for the maker of equipment for restaurants, medical labs and oil rigs

      Based on a 25% U.S. tariff on steel, aluminum

      Related Story ⭢

    • U.S. | Industrials

      Lennox International: Maker of air conditioners forecasts $5 million in costs in 2018 from tariffs and is raising prices to offset the expenses

      Based on a 25% U.S. tariff on motors, electronics, controls

      Related Story ⭢

    • Netherlands | Household appliances and tools

      Philips: CEO says company will raise prices on products such as hair clippers imported from China if the U.S. imposes tariffs

      Based on a proposed 10% U.S. tariff on hair clippers

      Related Story ⭢

  27. July 20, 2018
    • U.S. | Industrials

      General Electric: Sees as much as $400 million a year in impact from current and proposed tariffs, though about half could be offset by credits for exports to China. May adjust supply chain to mitigate effects.

      Based on a 25% U.S. tariff on electronic components and other parts

      Related Story ⭢

    • U.S. | Household appliances and tools

      Stanley Black & Decker: Estimates $35 million impact in 2018 from tariffs already implemented; projects up to $80 million a year in costs from Trump’s proposal for $200 billion additional China tariffs including vacuums, hand tools, power tool accessories. Plans price increases to offset.

      Based on a 25% U.S. tariff on metals, componentry, finished goods

      Related Story ⭢

    • U.S. | Automotive

      Gentex: Maker of rearview mirrors for cars cut its annual gross margin forecast, citing increased raw material costs of as much as $8 million in the second half linked to imports from China.

      Based on a 25% U.S. tariff on raw materials

      Related Story ⭢

    • Saudi Arabia | Energy

      Saudi Aramco: Raised prices for butane and propane as Chinese companies are buying more LPG from the Saudi state-run producer and cutting imports from the U.S.

      Based on a proposed 25% China tariff on butane, propane

      Related Story ⭢

  28. July 19, 2018
    • U.S. | Materials

      Nucor: Credits tariff for higher prices and demand, sees more than doubling investments to $1 billion in 2018.

      Based on a 25% U.S. tariff on steel products

      Related Story ⭢

    • U.S. | Materials

      PPG Industries: Maker of coatings for manufacturing, automotive industries says tariffs adding “modest cost” to raw materials, especially for tinplate used for paint cans.

      Based on a 25% U.S. tariff on tinplated steel

      Related Story ⭢

    • Mexico | Agricultural products

      Alfa: Owner of processed-foods maker Sigma switched to Canadian, European and South American suppliers from the U.S. to avoid tariff.

      Based on a 20% Mexico tariff on pork ham

      Related Story ⭢

    • U.S. | Materials

      Sonoco: Maker of packaging materials, including pull tabs for canned food, projects as much as $9 million in tariff costs in second half of the year, plans price hike on some products.

      Based on a 25% U.S. tariff on steel, aluminum

      Related Story ⭢

  29. July 18, 2018
    • U.S. | Materials

      Alcoa: Cut profit forecast ranges by $500 million, citing tariffs on aluminum it imports from Canada along with higher energy costs and lower market prices

      Based on a 10% U.S. tariff on aluminum

      Related Story ⭢

    • Sweden | Household appliances and tools

      Electrolux: Expects $10 million in added second-half costs from parts imported to U.S. and higher steel and aluminum prices.

      Based on a proposed 10% U.S. tariff on vacuum cleaners

      Related Story ⭢

  30. July 17, 2018
    • U.S. | Transportation

      CSX: Rail operator sees positive effect on both steel and ore shipments as U.S. steelmakers add production

      Based on a 25% U.S. tariff on steel

      Related Story ⭢

  31. July 12, 2018
    • U.S. | Consumer products

      Procter & Gamble: Cites ‘meaningful’ impact of tariffs on a handful of products in Canada, which accounts for 3% of global sales

      Based on a 10% Canada tariff on paper towels, air freshener

      Related Story ⭢

  32. July 9, 2018
    • Germany | Materials

      Kloeckner: Steel trader raises earnings forecast on higher U.S. prices.

      Based on a 25% U.S. tariff on steel

      Related Story ⭢

  33. July 4, 2018
    • Japan | Consumer products

      Suntory Holdings: The owner of Jim Beam bourbon whiskey, produced in Kentucky, says it must consider raising prices next year if EU tariffs on U.S. products continue.

      Based on a 25% EU tariff on bourbon

      Related Story ⭢

  34. June 28, 2018
    • Germany | Automotive

      Osram: Trade tensions will weaken sales of automotive lighting parts

      Based on a proposed 25% U.S. tariff on auto parts

      Related Story ⭢

    • Sweden | Automotive

      Volvo Cars: Owner Li Shufu says cars will cost more as trade wars escalate

      Based on a 25% China tariff on automobiles

      Related Story ⭢

    • U.S. | Materials

      Ryerson: Metal processor’s sales guidance exceeds estimates in part because of higher anticipated demand from inventory dislocations tied to tariffs.

      Based on a 25% U.S. tariff on steel and aluminum

      Related Story ⭢

  35. June 26, 2018
    • U.S. | Consumer products

      Brown-Forman: Raised Jack Daniel’s prices in light of EU tariffs

      Based on a 25% EU tariff on bourbon

      Related Story ⭢

  36. June 14, 2018
    • U.S. | Consumer products

      MillerCoors: Brewer says profit could fall by $40 million depending on how much aluminum prices rise

      Based on a 10% U.S. tariff on aluminum

      Related Story ⭢