(Reuters) -Tarife were top-notch for corporate executives in the early days of the profit season in this quarter, as US President Donald Trump threatens to hit the allies of Mexico and Canada’s impact on imported goods.
These tariffs are expected to start on March 1, with an announcement on Saturday, but it is possible that Trump will give up these threats or target only certain industries.
As the companies are moving through the question, the topic of conference calls and investors in this quarter is also a key topic of conference calls. Almost 200 companies that are part of the S&P 1500 – large, medium and small caps – mentioned or “near”, “tariff” or “supply chain” through the month of January.
So far, many of the executive directors are similar to those from the Textron, Donnelly Executive Director, who said that “we will only hang ourselves there and see how this is going on.”
Here are some of the aspects of trade managers discuss:
Production logistics
Several companies have discussed the challenges of moving production around the last weeks. Some companies produce in the United States as well as in Mexico or Canada, and can hit by tariffs if they import components that cannot be moved to the USA
“We have available capacity in our domestic operations to change production as needed to diminish these tariff influences if they appear,” said Brent Yeagy, Executive Director of the Wabash National Traffic Logistics Company.
The manufacturer of electric sports vehicles Polaris spoke about this at his invitation to earning, noting that in 2017 he quickly moved to leave China, and now he is facing potential tariffs due to production facilities in Mexico. In addition, he also deals with the higher cost of working for his business in the US.
“Compared to the rest of the sports industry industry and this moment, we were incredibly unfavorable,” said Michael Speetzen, the Polaris CEO, at a conference call to discuss earnings on January 28. “We are the only one we are the only one we are the only one we are the only one we are the only manufacturer, though, we were the only one we paid for the tariffs.”
Moving the shipment
Some companies suggested that they would consider the transition where they send their shipments. Large global companies with business in numerous companies can be able to adjust shipments from one place to another.
For example, Alcoa Executive Director William Oplinger said on January 22 that imports are likely to increase from countries with lower duties in the Middle East and India, while the Canadian aluminum could divert to Europe and other countries. This is because 25% of tariffs in Canadian aluminum exports to the United States could “represent $ 1.5 billion up to two billion dollars of additional annual costs for US customers,” he said.
