Top executives at well-known US firms are warning about the impact that tariffs are having on their companies and the wider economy. Technology giant Intel, footwear maker Skechers and consumer goods firm Procter & Gamble, have either cut their profit forecasts or withdrawn them citing economic uncertainty. US President Donald Trump has been trying to rebalance relations with key trading partners by using steep tariffs to bring them to the negotiating table. No new trade agreements between the US and other countries have been announced yet but there have been signs of progress in talks with South Korea. "The very fluid trade policies in the US and beyond, as well as regulatory risks, have increased the chance of an economic slowdown with the probability of a recession growing," said Intel's chief financial officer, David Zinsner, during a call with investors. "We will certainly see costs increase," he added as the California-based firm announced gloomy profit and revenue forecasts. Intel's shares dropped by more than 5% in extended trading after those remarks. Beyond the technology industry, footwear maker Skechers also disappointed investors. The firm saw its shares fall after it withdrew its annual results forecast. "The current environment is simply too dynamic from which to plan results with a reasonable assurance of success," Skechers' chief operating officer, David Weinberg, told investors in a post-earnings call. Skechers - like rivals Nike, Adidas and Puma - uses factories in Asia, particularly in China, to make its products. Comments from Procter & Gamble (P&G) executives also hinted at how tariffs could mean higher prices for its customers. The maker of Ariel, Head & Shoulders and Gillette said it was considering changes to its prices to make up for the extra cost of materials sourced from China and other places. It also said it expected sales to grow this year less than previously forecast. "We'll be looking for every opportunity to mitigate the impact," said Andre Schulten, P&G's financial chief, adding that there will be adjustments to "some level of consumer pricing". They join a growing list of examples of companies around the world that have warned about the impact of Trump's trade policies. Meanwhile, there were signs that talks on Thursday between US and South Korean trade officials in Washington DC, aimed at removing tariffs, have been positive. US Treasury Secretary Scott Bessent said the two sides had a "very successful" meeting. "We may be moving faster than I thought, and we will be talking technical terms as early as next week," he told reporters after the meeting. South Korea's industry minister, Ahn Duk-geun, who also took part in the talks, echoed Bessent's optimism and added that they are working toward a "July package". A 90-day pause on higher tariffs affecting dozens of countries is set to expire on 8 July. Trump has said more than 70 countries have reached out to start negotiations since the tariffs were announced.
US company bosses warn over tariffs impact
TruthLens AI Suggested Headline:
"US Executives Raise Concerns Over Tariff Effects on Business and Economy"
Bbc News
7.3
TruthLens AI Summary
Top executives from major US companies, including Intel, Skechers, and Procter & Gamble, have expressed serious concerns regarding the adverse effects of tariffs on their operations and the broader economy. Intel's chief financial officer, David Zinsner, indicated that the company's profit and revenue forecasts have been adjusted downward due to the unpredictable trade policies under the Trump administration. This uncertainty is contributing to a heightened risk of an economic slowdown, with Zinsner emphasizing the likelihood of increased costs for the company. Following these statements, Intel's stock experienced a dip of over 5% in after-hours trading. Skechers also faced investor disappointment as it withdrew its annual results forecast, with COO David Weinberg noting that the current environment is too volatile for reliable planning. The company, like its competitors Nike, Adidas, and Puma, relies on Asian factories, particularly in China, for production, making it vulnerable to the impacts of tariffs.
Procter & Gamble's executives have similarly indicated that tariffs could lead to higher consumer prices as they consider adjustments in response to increased costs of materials sourced from affected regions. The company, known for its popular brands such as Ariel and Gillette, also revised its sales growth expectations downward. Financial chief Andre Schulten stated that the company would actively seek ways to mitigate the tariff impacts, which may include raising prices for consumers. These warnings from major corporations reflect a growing trend of businesses voicing concerns over the implications of the Trump administration's trade policies. Despite these challenges, there are positive developments in trade negotiations, particularly with South Korea, where US Treasury Secretary Scott Bessent reported a successful meeting aimed at tariff removal. Both Bessent and South Korea's industry minister, Ahn Duk-geun, expressed optimism about progressing negotiations, indicating that technical discussions could commence soon, especially with a 90-day pause on higher tariffs nearing expiration on July 8.
TruthLens AI Analysis
The article explores the concerns raised by major US companies regarding the adverse effects of tariffs on their operations and the broader economy. Executives from leading firms like Intel, Skechers, and Procter & Gamble have expressed apprehension about the economic uncertainty caused by current trade policies. The commentary from these executives indicates a growing fear of potential economic slowdown and even recession, primarily due to the unpredictable nature of trade relations under the Trump administration.
Corporate Responses to Tariffs
Prominent companies have begun to adjust their financial forecasts as a direct response to the impact of tariffs. Intel’s CFO highlighted the rising costs associated with tariffs, which led to a significant drop in the company's stock price. Similarly, Skechers withdrew its profit forecasts, indicating that the fluctuating economic environment is complicating their ability to predict outcomes. Procter & Gamble also hinted at potential price increases for consumers due to higher material costs, reflecting a common trend among companies heavily reliant on overseas manufacturing.
Underlying Economic Sentiment
The warnings from these executives contribute to a narrative of economic vulnerability, suggesting that the current trade policies may have far-reaching consequences not just for individual companies but for the economy as a whole. The concerns expressed about a possible recession resonate with broader economic anxieties, which may lead to decreased consumer confidence and spending.
Public Perception and Implications
This article aims to shape public perception by highlighting the potential dangers of tariffs and the uncertainty they create. By focusing on the challenges faced by recognizable brands, the piece may foster a sense of urgency among consumers and policymakers to reconsider the current trade strategy. It subtly implies that the economic health of the nation is at stake, which could influence public opinion against the administration's trade policies.
Comparison with Other News
When viewed alongside other economic news, this article appears to be part of a larger discourse on trade and economic stability. Similar articles may focus on the effects of tariffs on different sectors, reinforcing the perception that tariffs are a pressing issue affecting a wide array of industries.
Market Impact
The article has the potential to influence stock markets, particularly affecting shares of companies mentioned, such as Intel and Skechers. Investor sentiment may shift as concerns about profit margins and economic stability grow, leading to volatility in the stock prices of firms heavily impacted by tariffs.
Geopolitical Context
In terms of global power dynamics, the article touches upon the broader implications of US trade policies on international relations. The ongoing negotiations with countries like South Korea reflect attempts to navigate a complex landscape of trade partnerships, which may have implications for global economic stability.
The language used suggests a cautionary tone, with phrases that indicate potential risks. This can be perceived as a form of manipulation aimed at drawing attention to the consequences of current policies, urging stakeholders to reconsider their positions.
In summary, the reliability of the article stems from the credible sources cited and the acknowledgment of broader economic trends. However, the framing of the information suggests a deliberate focus on negative outcomes, which could skew public perception.