US companies are starting to estimate the potential costs of Donald Trump’s tariffs, which could impact global trade. Diageo warned that US tariffs on Mexican and Canadian imports could dent its profits by $200 million, while ZF, a German auto supplier, expects to hike prices due to tariffs.
Diageo CEO Debra Crew said the company’s early assessment does not take into account further escalations or retaliatory action. However, finance chief Nik Jhangiani believes that around 40% of the estimated $200 million loss could be covered through pricing actions.
ZF has also stated that it will pass some of the cost of tariffs onto consumers via higher prices. Global freight company DSV warned that US tariffs threatened by Trump could curb demand slightly, potentially denting its earnings this year.
The EU is preparing for tough negotiations to protect its interests in case of a broader trade conflict. The International Chamber of Commerce’s global policy director Andrew Wilson said that 25% tariffs would be difficult to absorb and may lead to increased prices being passed on to consumers.
Companies are navigating changing US trade policies, which threaten various industries, including autos, consumer goods, and energy. The impact of Trump’s tariffs and retaliatory measures has already been felt in the markets, with European stocks, US stock futures, and the dollar taking a hit.
Source: https://www.reuters.com/business/retail-consumer/diageo-withdraws-medium-term-sales-forecast-2025-02-04