The CEO of the company has made it clear: the trade war will destroy everything!

The shadow of Trump's tariffs looms large, with corporate giants sounding the alarm on profits.

Due to the soaring costs and shaken consumer confidence brought about by Trump's tariff policies, major American corporations are intensively lowering their profit expectations, covering multiple sectors including consumer goods, aviation, energy, telecommunications, and industrial manufacturing. Companies are generally warning of supply chain disruptions, increased costs, and expressing concerns about the economic outlook.

According to FactSet, as of the statistical point, over 90% of companies in the S&P 500 index mentioned the impact of tariffs during their first-quarter earnings call, with the mention rate of the term "recession" soaring from less than 3% in the fourth quarter of last year to 44%.

Although the market is filled with concerns about an economic recession, a counter-interpretation suggests that this may be a strategy by CEOs to pressure the White House, which could instead prompt a policy shift, partially explaining the recent rebound in the U.S. stock market.

Consumer Goods Giants First to "Surrender," Lower Performance Guidance

The first to be hit are consumer goods companies. In this earnings season, Procter & Gamble, PepsiCo, and even the Mexican-style fast-food chain Chipotle have all lowered their full-year performance guidance.

Procter & Gamble attributed this to "tighter consumers reducing spending in the short term," as well as the impact of tariffs on its cost structure and profitability. The company's Chief Financial Officer Andre Schulten stated during the conference call:

"It is not illogical for consumers to take a 'wait-and-see' attitude; we have seen a decline in foot traffic at retailers."

PepsiCo also pointed out that "lackluster" consumer sentiment and tariffs were the reasons for its downward revision of the full-year core fixed exchange rate earnings per share expectations.

As one of the first large publicly traded restaurant companies to report earnings, Chipotle also lowered the upper limit of its full-year same-store sales growth expectations. Company executives indicated that due to increasing concerns about their financial situation, foot traffic began to slow down from February and this trend has continued into April.

Chipotle's CEO Scott Boatwright told analysts:

"Our visit research shows that saving money out of economic concerns is the primary reason consumers are reducing their frequency of dining out."

Tariff Shockwaves: No Sector is Immune from Aviation to Energy

In addition to the consumer goods sector, companies in transportation, energy, telecommunications, home improvement, and industrial manufacturing have also issued warnings to Wall Street during their earnings calls.

In the aviation sector, American Airlines CEO Robert Isom stated that aircraft costs have become excessively high, and tariffs are "unreasonable." The company has therefore withdrawn its financial guidance for 2025 and stated that it does not intend to absorb these costs, nor does it believe customers will welcome it.

Additionally, Delta Air Lines, Southwest Airlines, and Alaska Airlines have also withdrawn their guidance due to the unpredictability of the U.S. economy. United Airlines, on the other hand, unusually provided outlooks under two scenarios. Airbus Americas CEO Robin Hayes pointed out that global tariffs will put "immense pressure" on improving the industry's supply chain In terms of transportation and industry, the large freight railway group Norfolk Southern stated that tariffs may slow down the transportation of automobiles and intermodal containers. Boeing stated that the trade war will force it to seek alternative buyers for some aircraft. 3M's CEO William Brown admitted that "tariffs will be a headwind this year," and the company will respond by adjusting production, cutting costs, and raising prices. RTX warned that if tariffs persist until the end of the year, its pre-tax operating profit could be impacted by up to $850 million. General Electric indicated it would raise prices to offset approximately $500 million in additional costs.

In terms of energy, John Ketchum, CEO of the largest U.S. power company NextEra Energy, stated that tariffs will increase the cost of gas-fired generators as electricity demand grows at an unprecedented rate.

U.S. oilfield service providers Halliburton and Baker Hughes warned that the trade war could harm profits, disrupt supply chains, and depress oil prices. Baker Hughes estimated that tariffs could lead to a loss of up to $200 million in EBITDA this year, accounting for about 4%. GE Vernova, a subsidiary of General Electric, also stated that its costs could increase by up to $400 million this year.

In terms of telecommunications and healthcare, U.S. telecom giants AT&T and Verizon warned that tariffs could raise the prices of mobile phones and wireless routers. Verizon CEO Hans Vestberg explicitly stated that the company does not intend to absorb such high mobile phone tariffs. Medical device manufacturer Boston Scientific stated that tariffs will result in a loss of about $200 million this year. Johnson & Johnson maintained its annual profit forecast but also highlighted a $400 million cost primarily driven by medical device tariffs.

In terms of construction, Ryan Marshall, CEO of U.S. builder PulteGroup, stated that tariffs will increase the average price of new homes by about $5,000 and noted that demand in April was "more volatile and unpredictable."

Steven Purdy, head of credit research at fund management company TCW Group, told the media that CEOs are currently "very unhappy," as they do not know whether the coming months will usher in a whole new world order or if it will all ultimately feel like a nightmare.

Market Alternative Interpretation: "CEO Put Options" Trigger Market Rebound?

In the face of widespread pessimism and profit warnings from the business community, some believe this may be a strategic "put option" by corporate CEOs—by intensively emphasizing the negative impact of tariffs during earnings calls and lowering performance guidance, CEOs may be exerting pressure on the Trump administration to make concessions on tariff policies.

This interpretation suggests that the market may be betting that this pressure will ultimately force the White House to adjust its trade policies, such as the potential "downgrade" that Treasury Secretary Mnuchin hinted at to investors, and expectations for tariff exemptions for automakers If this expectation is realized, the current profit warning may instead become a catalyst for a policy shift, which may partially explain why the U.S. stock market has still managed to rebound despite numerous negative news impacts.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at one's own risk