Tariff turmoil: How Tesla and other companies are dealing with the uncertainty of the trade war
Uncertainty over tariffs and an unpredictable trade war is weighing heavily on companies as they report their latest financial results and try to give investors financial forecasts.
Some tariffs remain in place against key U.S. trading partners, but others have been postponed to give nations time to negotiate. The tariff and trade picture has been shifting for months, sometimes changing drastically on a daily basis. Those shifts make it difficult for companies and investors to make a reliable assessment of any impact to costs and sales.
On Tuesday, Treasury Secretary Scott Bessent said he expects a 'de-escalation' in the trade war between the U.S. and China, but cautioned that talks between the two sides had yet to formally start.
Here's how several big companies are dealing with the tariff confusion:
Tesla
Tesla is in a better position than most car companies to deal with tariffs because it makes most of its U.S. cars domestically. But it still sources materials from other nations and will face import taxes.
The bigger impact will be seen in the company's energy business. The company said the impact will be 'outsized' because it sources LFP battery cells from China.
The broader trade war could also hurt the company as China, the world's largest electric vehicle market, retaliates against the U.S. Tesla was forced earlier this month to stop taking orders from mainland customers for two models, its Model S and Model X. It makes the Model Y and Model 3 for the Chinese market at its factory in Shanghai.
CEO Elon Musk, a member of Trump's administration, on Tuesday reiterated that he believes 'lower tariffs are generally a good idea for prosperity.' But he added that ultimately the president decides on what tariffs to impose.
Akzo Nobel
The Amsterdam-based maker of paints and coatings for industrial and commercial use said the big risk from tariffs could come in the form of lower demand for its products.
The company said almost all sales of finished goods in the U.S. were locally produced, with the majority of raw materials locally sourced.
'Over the years, we deliberately localized both our procurement and production in the U.S.,' said CEO Gregoire Poux-Guillaume, in a conference call with analysts. 'We also largely run China for China and use the rest of Asia instead as an export base.'
The company's products range from paints and coatings for the automotive industry to the do-it-yourself homeowner. Broader tariffs could squeeze consumers and businesses and hurt sales.
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