The tariff war begins to backfire on the United States! Walmart and Delta Air Lines withdraw their performance guidance

The trade war initiated by Trump is backfiring on the U.S. economy!

On Wednesday local time, the retail giant Walmart and the airline giant Delta Air Lines both withdrew their performance guidance. As two major barometers of the U.S. economy, they are sending clear and explicit warning signals: the uncertainty brought by the trade war has begun to substantially impact the profitability of U.S. companies and consumer confidence, plunging the U.S. business community into unprecedented uncertainty.

Walmart Withdraws Q1 Guidance: Tariff Uncertainty Forces Strategic Adjustment

On Wednesday local time, Walmart withdrew its revenue guidance for the first quarter, citing uncertainty regarding the potential impact of comprehensive tariffs imposed by the Trump administration.

Walmart stated in a press release that it hopes to "maintain flexibility in price investments during the implementation of tariffs." Walmart did not provide a new revenue guidance for the first quarter. The company had originally expected adjusted revenue for the first quarter to grow by 0.5%-2.0%, while the latest sales growth expectation remains in the range of 3%-4%.

Notably, even after withdrawing the first quarter operating income guidance, the retail giant still maintained its full-year guidance. Walmart stated in February that it expects net sales for the full year to grow by 3%-4%, with adjusted revenue at constant exchange rates expected to grow by 3.5%-5.5%, and adjusted earnings per share for the full year expected to be between $2.50 and $2.60.

Walmart CEO Doug McMillon stated at an investor event in Dallas that the current situation is quite unusual, saying:

Our environment has clearly changed, so this is really stimulating for us.

While we don't know what will happen, we do know what our priorities are, what our goals are, and we will focus on keeping prices as low as possible.

Delta Air Lines Withdraws Full-Year Performance Guidance: The Entire Company Enters "Recessionary Defensive Posture"

On the same day, Delta Air Lines withdrew its full-year performance guidance for 2025 but still expects to be profitable for the year, citing that Trump's tariffs have affected flight bookings. According to guidance released in January, Delta had expected adjusted earnings per share to exceed $7.35 for the year.

Delta CEO Ed Bastian stated in a media interview that it is still too early to update the 2025 performance guidance:

Given the level of uncertainty we are seeing and the amount of change happening in global trade every day, it is difficult to predict what the year might look like.

Delta predicts its second-quarter revenue will decline by up to 2% year-over-year or grow by up to 2%, while Wall Street had previously expected a growth of 1.9%. It expects adjusted earnings per share to be between $1.70 and $2.30, while analysts had expected $2.23 per share.

Bastian further pointed out that the company is "acting as if we (the U.S. economy) are entering a recession," and "everyone is in a defensive posture." The CEO stated that as consumer and business confidence weakens, the company's revenue has already "stabilized."

Bastian did not shy away from blaming all of this on Trump's trade policies, calling them "the wrong approach," which contrasts sharply with his statement last November that the Trump administration's regulatory approach to the industry could be "a breath of fresh air."

Tariff Storm Heavily Impacts Consumer Confidence

The Trump administration's "reciprocal tariff" policy took effect in the early hours of April 9, triggering a chain reaction in the U.S. business community, leading to a decline in both consumer and business confidence.

Delta Air Lines reported that while international and high-end travel demand remains relatively resilient, domestic ticket sales have been significantly impacted.

The company stated that travel demand, which had grown by about 10% earlier this year, has slowed as some companies reconsider business travel, the Trump administration has made large-scale cuts to government employees, and the market remains volatile. In response, Delta has canceled its plans to increase flight capacity by 3%-4% in the second half of 2025.

Due to concerns over slowing demand, Wall Street analysts have significantly lowered their earnings expectations and target prices for airlines in recent weeks. TD Cowen's airline analysts Tom Fitzgerald and Helane Becker warned that after Delta Air Lines, more airlines will announce capacity cuts for the second half of this quarter.