Tariffs are creating corporate chaos

UPS cuts 20,000 jobs; GM delays investor call

By: Christoph Steltz
Marie Mannes
and Kalea Hall
Reuters

..... The fallout from U.S. President Donald Trump's trade war reverberated further through the corporate world on April 29, [2025] 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 May 1 [2025] pending possible changes to trade policy.
..... The Detroit automaker along with American ketchup maker Kraft Heinz, Swedish appliance maker Electrolux and other blue chip names, on April 29 [2025] joined the diverse list of companies that have pulled forecasts for 2025 or slashed outlooks, further evidence that a chaotic trade policy is taking a major toll on companies ' ability to plan beyond the immediate term.
..... About 40 companies worldwide have pulled or lowered their forward guidance in the first two weeks of the first-quarter earnings seasons, a Reuters analysis showed.
..... "Every single prediction has been proved to be wrong,: Yannick Fierling, electrolux CEO, told Reuters. "I'm surprised if people are claiming they have a view where tariffs are going."
..... The White House has retreated several times on the sweeping tariffs Trump instituted in early April [2025] that unsealed a wave of selling across stocks worldwide and prompted investors to reduce holdings in the normally safe-haven U.S. dollar and treasury debt.
..... On April 29, [2025] Treasury Secretary Scott Besset tired to reassure consumers and investors by noting Trump would announce cuts to planned auto part tariffs to avoid double levies on parts and the materials to make them. he also touted the administration's plans to cut taxes and reduce regulation to boost confidence.
..... However, executives are increasingly sounding the alarm over how Trump;s vacillating trade polices have sapped consumer and business sentiment, raising fear that even if tariffs are rolled back substantially, the damage done in the last few months will not be easily reversed.
..... Job openings dropped sharply in March, [2025] while the conference Board's measure of consumer confidence in April [2025] fell to its lowest level since COVID-era readings.
..... "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.
..... First quarter U.S. gross domestic product data is expected to come in at a weak 0.3% on April 30, [2025] according to a Reuters poll.
..... While the White House says it is in negotiators with many nations and has rolled back or paused some levies, 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.
..... GM and Volvo Cars abandoned their outlooks on April 29, [2205] joining U.S. airline Delta, computer gadget maker Logitech and drinks giant Diageo.
..... GM delayed it earnings call that had been scheduled for the morning of April 29 to May 1 [2025] due to the expected changes in trade policy.
..... "We believe the future impact of tariffs could be significant," GM Chief Financial Officer Paul Jacobson told reprot4ers 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 sport-car maker Porsch AG said it had suffered a hit of at least 100 million euros ($114 million) across April and May [2025] as a result of U.S. import tariffs.
..... Shares in Volvo Cars fell 9% 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.
..... 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.

Consumer worries

..... In a sign of the tensions around trade policy, the White House reacted angrily to a report from Washington-based Punchbowl News that Amazon would detail how much shoppers are paying for items due to tariffs.
..... The retailing giant denied that report, though it said its team that runs its low-cost Amazon Haul store had considered listing import charges for certain products.
..... Adidas CEO Bjorn Gulden said that "in a normal world" without the tariff uncertainly, the German sportswear company would have hiked its 2025 revenue and profit forecasts after strong quarterly results last week. [04/25/2025]
..... But "given the uncertainly 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.
..... 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 uncertainly will feed into consumes' purchasing decisions," Danish brewer Carlsberg's CEO Jacob Aarup-Andersen told Reuters.

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