How major companies are managing the uncertainty of tariffs
As Trump’s trade policies continue to rattle global markets, executives at some of the world’s largest companies are scrambling to assess how the imposition and potential escalation of tariffs will affect their businesses.
Amid the growing uncertainty, companies are resorting to a mix of cautious forecasting, strategic adaptations, and cost-saving measures to mitigate the fallout from the shifting tariff landscape.
In a year already defined by macroeconomic challenges, the unpredictability of tariff-related disruptions is forcing CFOs to balance financial forecasts with the reality that their businesses operate in a volatile, ever-evolving market.
Kraft Heinz, a leader in the global food industry, has been particularly affected by inflationary pressures and tariff concerns. The company recently downgraded its earnings forecast, citing a “volatile environment.”
As prices for consumer staples like ketchup and boxed macaroni & cheese rise, the company finds itself under mounting pressure to maintain its profitability while addressing the rising costs of production, exacerbated by tariffs.
Kraft Heinz’s CEO, Carlos Abrams-Rivera, acknowledged the broader macroeconomic forces at play:
“We’re closely monitoring the potential impacts from macroeconomic pressures such as tariffs and inflation,” signaling that the company is fully aware of the complexities of navigating this turbulent period.
The airline industry, meanwhile, is facing a unique set of challenges stemming from indirect tariff effects.
JetBlue Airways, for example, has found itself grappling with a decrease in consumer demand for travel, an effect directly linked to rising costs driven by tariffs.
Tariffs on goods impact everything from consumer electronics to everyday goods, making it more difficult for households to spend on discretionary activities like travel.
Marty St. George, president of JetBlue, noted, “In the first quarter we saw booking strength from January deteriorate into February and worsen into March.”
As a result, the airline is considering operational cost-saving measures, such as fleet retirements and reducing capacity, to better manage its bottom line amid these challenges.
Coca-Cola, too, has felt the pinch from tariffs, particularly the 25% import duty on aluminum, a critical material for its packaging.
Despite this, the beverage giant has managed to reduce the negative impact by adjusting its supply chain, considering alternative suppliers, and even increasing reliance on plastic or glass bottles where feasible.
The company recently lowered its full-year earnings forecast, now predicting a more modest 7-9% growth in adjusted earnings per share, down from the previous 8-10% estimate.
Still, Coca-Cola remains confident that it can weather these challenges, emphasizing that the company’s diversified supply chain and global presence provide some buffer against the rising costs of materials.
In the automotive sector, General Motors (GM) is reassessing its 2025 forecast due to the increasing complexity of managing tariffs on auto imports.
GM, which has a sprawling production network across North America, is heavily impacted by the 25% tariff on automobile imports, as parts often cross multiple borders during the manufacturing process.
As tariffs make components more expensive, GM is feeling the squeeze, prompting the company to delay its earnings call as it adjusts its outlook.
The auto giant, already facing slowdowns due to trade volatility, is bracing for the potential long-term consequences of these tariffs.
Logistics giant UPS is facing a different challenge, with China’s tariffs posing a significant concern for its international shipping business.
While UPS is largely insulated from some global tariff impacts, the company remains deeply concerned about the ongoing trade relationship between the U.S. and China.
As CEO Carol Tome remarked, “It’s China that’s the real uncertainty, I think, facing the economy.”
UPS’s dependence on Chinese manufacturing means that any continued escalation in tariffs on Chinese imports could lead to significant disruptions in the supply chains of many small businesses it serves.
For now, UPS is taking a “wait-and-see” approach as it closely monitors the evolving trade landscape.
Sherwin-Williams, which generates most of its revenue within the U.S. and sources a significant portion of its raw materials domestically, is less exposed to the direct impact of tariffs than other companies in the manufacturing sector.
However, the company still faces challenges from rising material costs and the broader effects of economic instability.
Sherwin-Williams reaffirmed its earnings forecast for the year, indicating that the company expects demand for its products to remain stable, albeit with some variability.
Despite this, the firm’s exposure to the tariff-induced increases in raw materials costs is low, providing some relief in an otherwise challenging environment.