SAN FRANCISCO (Reuters) - Tariffs are starting to bite big manufacturers and Wall Street could get another bout of caution and uncertainty from major industrial companies when a swath of reports comes in over the next week.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 11, 2018. REUTERS/Brendan McDermid
Investors are worried about the impact on earnings should the United States’ trade war with China and other major trading partners escalate. Deutsche Bank in June estimated that an escalation of the dispute to include $200 billion of imports would hit earnings growth by 1-1.5 percent.
“If today’s political rhetoric intensifies and translates into actual protectionist policies, it will be a negative for all businesses in the U.S. and abroad, including ours,” Hamid Moghadam, chief executive of supply chain management company Prologis, warned on a conference call on Tuesday.
Manufacturers across the country are concerned about Washington’s recent trade policies, with some saying that uncertainty related to tariffs was already hitting them, according to anecdotes collected by the U.S. Federal Reserve in its Beige Book, released on Wednesday.
That is starting to show up in early reports by companies. Earnings from Honeywell International (HON.N), General Electric (GE.N) and Stanley Black & Decker (SWK.N) show companies facing higher costs due to already enacted tariffs, and uncertainty about tariffs on as much as $500 billion in Chinese goods threatened by Trump.
GE said it expects tariffs on its imports from China to raise its costs by up to $400 million and Alcoa (AA.N) said the tariffs led to an extra $15 million in costs. [
Second-quarter corporate earnings seasons kicks into gear starting on Monday, with results on tap
