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Global companies so far project $15 bln tariff hit in 2025

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S&P 500 hits highs despite tariff uncertainties

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Caterpillar ( CAT ), Yum Brands ( YUM ), Molson Coors ( TAP/A ) among those affected

By Arpan Varghese and Shashwat Chauhan

Aug 5 (Reuters) - Companies across the corporate

spectrum revealed more pain from the cost of U.S. President

Donald Trump's tariff war, with bellwethers Caterpillar ( CAT ),

Marriott ( MAR ) and others on Tuesday noting weaker demand and higher

prices.

All told, global companies that have reported earnings this

quarter are looking at a hit of around $15 billion to profits in

2025, Reuters' global tariff tracker shows.

A majority of these come from industrial, manufacturing and

automotive sectors, while financial and tech sectors are less

affected.

Trump has said the tariffs are necessary to resolve U.S.

trade imbalances and declining manufacturing power; he has said

the levies on imports will bring jobs and investment to the

United States.

"I think we're just getting started," said Steve Sosnick,

chief market analyst at Interactive Brokers in Greenwich,

Connecticut. "The tariffs are still in their infancy, especially

with major trading partners like Canada, China and India still

in flux."

Tuesday's round of earnings illustrates the different ways

trade policy is affecting companies, from the rising costs of

imported materials like metals to the slippage in consumer

confidence that has sapped demand.

Caterpillar ( CAT ), for instance, saw a 0.7% hit to

revenue, while its cost of goods rose by 6.5%, and CEO Joe Creed

told investors that tariffs are "likely to be a more significant

headwind to profitability in the second half of 2025."

Beer maker Molson Coors ( TAP/A ) said it was expecting costs

of between $20 million and $35 million in the second half of the

year due to a tariff-driven rise in the price of aluminum

delivered to the U.S. Midwest.

Tariffs on aluminum shipped into the United States were

doubled to 50% in June from the previous 25% duty imposed in

March.

MARKET RESILIENCE

The markets, however, have remained resilient even as

Trump's policies continue to change. He said on Tuesday that he

would raise tariffs on goods imported from India from the

current 25% as part of an ongoing spat with the country over its

purchases of oil from Russia.

U.S. equities rebounded sharply from their April lows

following what Trump deemed "Liberation Day," when he unleashed

a wave of global tariffs.

The S&P 500 hit all-time highs last month on the back

of strong earnings, led by the so-called Magnificent Seven, a

group of tech companies that have benefited from surging

investment in artificial intelligence.

Of the 370 companies in the S&P 500 that have reported

earnings so far, 80.3% have reported quarterly earnings above

analyst estimates, with their earnings growth rate at 11.9%,

according to LSEG data.

"We are figuring out that some industries may be

affected, but they also might gain because (new) markets are

open to them that may have been closed in the past. We're going

to have to have a couple more quarters to see how this actually

plays out," said Kim Forrest, chief investment officer at Bokeh

Capital Partners.

Several market strategists of late have warned that a

correction could be in the offing, but are broadly optimistic

about the market. Evercore ISI analysts believe the market could

dip between 7% and 15% in the September-October period as growth

slows and inflation increases, though the AI-driven bull rally

should continue.

Higher ingredient costs ate into profits of Taco Bell parent

Yum Brands ( YUM ), which, like McDonald's and other

fast-food chains, leaned on budget-friendly meal deals to boost

demand as U.S. consumers pull back on eating out due to worries

about rising costs.

Hotel operator Marriott International ( MAR ) cut its 2025

forecast on softening travel demand, while agribusiness giant

Archer-Daniels Midland ( ADM ) posted its lowest profit in five

years.

While some market participants noted that tariff-led

uncertainty was likely to persist this year, with over 100

global companies withdrawing or cutting financial guidance,

others said in the longer run, companies and investors would be

able to see some green shoots.

"It seems that companies themselves are a little more

optimistic about the outlook now that the Liberation Day tariffs

are in the rearview mirror," said Ross Mayfield, investment

strategy analyst at Baird.

"Companies are going to have to be really deft in how they

navigate this (tariffs), but obviously there's no choice but to

pass some of this on to the consumer. We see S&P margins

hovering around record highs, and it wouldn't surprise me if

that ticked down a little bit in the coming quarters."