Biting the Bullet: How U.S. Corporations Weather Trump's Volatile Trade Policies
American businesses grapple with Trump's trade initiatives - Customs policies under Trump's administration reportedly causing discomfort among American businesses
Let's dive into how America's heavyweights - General Motors (GM), Harley-Davidson, and McDonald's - confront the turbulence caused by Trump's trade clashes and global economic turmoil.
GM: Taking a Multi-Billion Dollar Hit
Expecting a massive $4 to $5 billion hit from tariffs, General Motors (GM) slices its profit forecast by a third. Despite relief from loosened tariffs on imported car parts, the looming cost still stings. Mary Barra, GM's fearless CEO, penned a dire letter to investors, reeling from the anticipated decline. GM's projected adjusted earnings before interest and taxes for 2025 now range between $10-$12.5 billion, a drastic tumble from the projected $15.7 billion in operating income earlier.
Harley-Davidson: Steering Through Volatility
In the wake of trade policy uncertainties and an erratic economic environment, Harley-Davidson abandons its financial outlook for 2025. The motorcycle manufacturer cites an uncertain global tariff situation and macroeconomic conditions for its move, which was initially announced on February 5, 2024. Despite scoring impressive gains in various areas during the first quarter, U.S. retail sales underperformed expectations. In a bid to survive the challenging economic and trade landscape, CEO Jochen Zeitz emphasizes Harley-Davidson's commitment to sharpening cost productivity, slicing the supply chain, eagle-eyeing operational costs, and pruning dealer inventory. Harley-Davidson stands among U.S. firms that could face EU retaliatory tariffs.
McDonald's: Feeling the Pinch of Uncertainty
While grappling with customer uncertainties about the economic climate, McDonald's battles declining same-store sales by 1% compared to the same period in 2023. CEO Chris Kempczinski labels the market conditions as the most grueling yet. The drop was slightly more than analysts anticipated, with McDonald's attributing part of the blame to the missing leap day in February 2024. In the U.S., the decline in same-store sales plummets by 3.6%.
On a consolidated basis, revenues plummet by 3% to $5.96 billion, while operating income plunges by 3% to $2.65 billion. Net income drops to $1.87 billion, down from $1.93 billion the previous year.
Trade Conflicts and Policy Shifts Under Trump's Reign
Under Trump's reign as U.S. President, trade conflicts continue to cast a long shadow on corporate coffers, with Detroit's automakers GM and Chicago-based McDonald's experiencing ripples from the economic uncertainty. Brace yourself, folks; it's a bumpy ride ahead as we navigate these treacherous trade waters.
- Tariff Influence
- Global Trade Impact
- Donald Trump
- U.S. President
- Harley-Davidson
- GM
- McDonald's
- Economic Volatility
- U.S. Corporations
- Trade Conflicts
- Uncertainty on Investments
- Market Challenges
- The volatile trade policies under President Trump's reign have resulted in tariff influence, causing General Motors (GM) to anticipate a $4 to $5 billion hit and reduce its profit forecast by a third.
- Harley-Davidson, amidst uncertainties in trade policies and a volatile economic outlook, has abandoned its financial outlook for 2025, citing a uncertain global tariff situation and macroeconomic conditions.
- Economic volatility has taken a toll on McDonald's, with the fast-food giant experiencing a decline in same-store sales by 1%, compared to the same period in 2023.
- U.S. corporations, including Detroit's automakers GM and Chicago-based McDonald's, are grappling with the impact of global trade and the uncertainties arising from Trump's trade conflicts.
- In navigating these treacherous trade waters, businesses, such as GM, Harley-Davidson, and McDonald's, face challenges in pruning costs, adapting to policy shifts, and maintaining investor confidence.