By Christoph Steitz, Marie Mannes and Kalea Hall
FRANKFURT/STOCKHOLM/DETROIT (Reuters) -The fallout from U.S. President Donald Trump’s trade war reverberated further through the corporate world on Tuesday, as delivery giant UPS said it would cut 20,000 jobs to lower costs, while General Motors pulled its outlook and pushed its investor call to Thursday pending possible changes to trade policy.
The Detroit automaker, along with Kraft Heinz, Electrolux and other blue-chip names on Tuesday joined the diverse list of companies that have pulled forecasts for 2025 or slashed outlooks, in more evidence that a chaotic trade policy is taking a major toll on companies’ ability to plan beyond the immediate term.
“The world has not been faced with such enormous potential impacts to trade in more than 100 years,” UPS CEO Carol Tome said on the company’s earnings call.
The sweeping tariffs Trump instituted in early April unleashed a wave of selling across stocks worldwide and prompted investors to reduce holdings in the normally safe-haven U.S. dollar and Treasury debt. That sent the White House into retreat, as it has rolled back or paused some levies, though sky-high tariffs on China and other levies on metals and other materials are still in place, and additional industry-specific tariffs on trucking, pharmaceuticals and semiconductors are still being threatened.
On Tuesday, Treasury Secretary Scott Bessent said Trump would announce cuts to planned auto parts tariffs to avoid double levies both on parts and the materials used to make them.
About 40 companies worldwide have pulled or lowered their forward guidance in the first two weeks of the first-quarter earnings season, a Reuters analysis shows. GM and Volvo Cars abandoned their outlooks on Tuesday, joining U.S. airline Delta, computer gadget maker Logitech and drinks giant Diageo.
GM delayed its earnings call that had been scheduled for Tuesday morning to Thursday due to the expected change in trade policy.
“We believe the future impact of tariffs could be significant,” GM Chief Financial Officer Paul Jacobson told reporters after it pulled its forecast for the year. “We’re telling folks not to rely on the prior guidance, and we’ll update when we have more information around tariffs.”
German sportscar maker Porsche AG said it had suffered a hit of at least 100 million euros ($114 million) across April and May as a result of U.S. import tariffs. Shares in Volvo Cars fell over 10% after it said it would cut spending by about $1.8 billion and restructure its U.S. operations following a tumble in first-quarter profits.
“There is so much volatility, there is so much information coming in, some of which is reliable, some of which is not,” CFO Jochen Breckner said, warning that Porsche would have to pass on tariff costs to customers via price increases, at least in part.
The tariffs are expected to raise U.S. car prices by thousands of dollars, reducing demand and piling pressure on an automobile industry already struggling with a slowing transition to electric vehicles.
In the clearest warning yet from a major bank on how the ripple effects of Trump’s tariff actions could hurt lenders, HSBC said fallout from the global trade war could hit loan demand and credit quality.
The growing worries among consumers and businesses about the uncertainty have put the White House on edge. Bessent defended the negotiation process on Tuesday, saying Trump was creating “strategic uncertainty” in his talks with other nations. The White House also reacted angrily to a report from Washington-based Punchbowl News that retailing giant Amazon would detail how much shoppers are paying for items due to tariffs. Amazon has denied that report.
“No question the uncertainty surrounding exactly what could happen with demand is about as high as we’ve ever seen,” Carson Group’s chief market strategist Ryan Detrick said, predicting that more companies would suspend or withdraw guidance.
CONSUMER WORRIES
Consumers are spending less as Trump’s vacillating trade policy creates uncertainty, raising fears of a sharp economic downturn in the United States and beyond. The Conference Board’s measure of U.S. consumer confidence fell in April to its lowest level since its COVID-era reading in May 2020, it said Tuesday. First quarter U.S. gross domestic product data is expected to come in at a weak 0.3% on Wednesday, according to a Reuters poll.
Adidas CEO Bjorn Gulden said that “in a normal world” without the tariff uncertainty, the sportswear company would have hiked its 2025 revenue and profit forecasts after strong quarterly results last week.
But “given the uncertainty around the negotiations between the U.S. and the different exporting countries, we do not know what the final tariffs will be. Therefore, we cannot make any ‘final’ decisions on what to do”, he said on Tuesday.
Among other consumer-facing names, ketchup maker Kraft Heinz trimmed its annual forecast, hotel operator Hilton cut its 2025 revenue growth outlook and Porsche and Electrolux cut their full-year outlooks. They joined previous remarks from household names like Nestle and Unilever to Chipotle that blamed weaker consumer sentiment for cutting outlooks.
“History tells us that prolonged uncertainty will feed into consumers’ purchasing decisions,” Danish brewer Carlsberg’s CEO Jacob Aarup-Andersen told Reuters.
($1 = 0.8785 euros)
(Reporting by Christoph Steitz in Frankfurt, Marie Mannes in Stockholm, Helen Reid in London, Paolo Laudani and Linda Pasquini in Gdansk, Kalea Hall in Detroit, Lisa Baertlein in Los Angeles; Additional reporting by Sameer Manekar and Abhinav Parmar in Bengaluru and Jeff Mason and David Shepardson in Washington; Writing by Josephine Mason, Arpan Varghese and David Gaffen; Editing by Catherine Evans and Chizu Nomiyama)
