According to a report from Bloomberg, of the 110 S&P 500 companies that have reported Q3 earnings through Tuesday, 37 percent have either explicitly discussed or answered questions about tariffs. The report said the third quarter has been the “first true gauge of how much the White House’s protectionist policies have affected profits.”
For many companies, higher input costs from Section 232 tariffs on steel and aluminum, along with retaliatory tariffs from Canada, Mexico and the EU, and tariffs on an ever-increasing number of Chinese products, have been passed on to retailers or customers. However, many companies have reportedly absorbed the costs or cut costs elsewhere.
Andrew Bonfield, chief financial officer of Caterpillar, said material costs were up 2 percent on higher steel prices, and “the drag of higher input costs and tariffs was just $50 million more than price realization.”
John Olin, chief financial officer at Harley Davidson, said the company expects to incur about $43-$48 million of increased costs from tariffs during 2018.
Michael McGarry, chief executive officer of PPG Industries said the unfavorable impact of tariffs is expected to be between $50-$60 million in the fourth quarter.
Gregory Hayes, chief executive officer of United Technologies, pointed out that tariffs, when passed onto the consumer in one form or another, is “just a tax on the consumer in another way to think about it.”
While many companies that mentioned tariffs experienced negative impacts from them, steelmaking companies did not. John Ferriola, chief executive officer of Nucor, said the US steel industry as a whole is benefiting from the tariffs, as the they have decreased “unfairly traded imports” and provided “leverage to get other countries to the table, to negotiate fairer trade agreements for the US.”