Tariff Profit Risk Turns Into Reality for Growing Corporate List

Companies that cited tariffs among risk factors earlier in the year have begun to see the higher costs of goods hurting their balance sheets and cutting into profit forecasts, according to a smattering of early August earnings calls.

Pressure on businesses has grown as Trump’s tariffs—first announced in January in a bid to drive domestic manufacturing and create more revenue—have heightened, scaled back, and renewed at a dizzying pace. The global trade environment is now facing its newest test with tariffs on more than 90 countries that went into effect this week.

Wider profit margins tied to favorable currency exchange rates going into the second quarter gave many larger companies room to initially absorb price hikes instead of passing them to consumers, said Mark Vitner, chief economist at Piedmont Crescent Capital.

But companies won’t swallow costs forever, said Jeffrey Korzenik, chief economist for Fifth Third Bank. Tariff-related inflation will likely show up after President Donald Trump’s trade policy settles one way or another and companies can start planning longer-term, he said.

The higher costs charged to importers are not borne by those exporting products, but by US sellers and their consumers.

Some businesses, like Procter & Gamble Co., said this month they are starting to pass on costs. Others—like Apple Inc., which predicted a $1.1 billion increase in tariff-related costs for its final quarter—are investing in US manufacturing to mitigate or avoid levies.

“There’s not a lot that you can do,” Korzenik said. “No one likes to see their margins compressed.”

To be sure, many companies say they’re still insulated from tariff fallout—for now. Pharmaceutical company Eli Lilly & Co., for instance, forecasted “modest” tariff impacts on its Thursday earnings call.

Here’s a handful of companies this week alone, however, which reported how costs tied to tariffs are a rising concern:

McDonald’s Corp.

The fast-food chain’s chief executive officer, Chris Kempczinski, pointed to tariffs as a potential reason for lagging visits nationwide to quick-service restaurants. Lower-income consumers, a key part of McDonald’s customer base, are facing “anxiety and unease” from the possibility of trade-related inflation, among other factors, which could be causing them to forgo their usual meal out, he said on an Aug. 6 earnings call.

Molson Coors Beverage Co.

Trump’s 50% tariffs on aluminum left beverage company Molson Coors exposed as it contended with aluminum prices that nearly tripled this year, Chief Financial Officer Tracey Joubert said on an Aug. 5 earnings call. Aluminum, which the company uses for its canned beverages, is a particularly difficult, expensive commodity to hedge, she said. The company expects up to $35 million in aluminum-related costs for the back half of the year.

Caterpillar Inc.

Tariff impacts were at the top end of estimates for the construction equipment manufacturer’s most recent quarter, Chief Executive Officer Joseph Creed said on an Aug. 5 earnings call. The taxes are also likely to be “a more significant headwind” in the year’s second half, he said.

Diamondback Energy Inc.

Steel tariffs are driving up the cost of drilling, according to Diamondback’s Aug. 5 earnings call. The Texas-based energy company has seen prices for well casing rise about 15% since Trump announced sweeping global tariffs in April, Chief Financial Officer Jere Thompson said. Cost inflation for casing is expected to reach nearly 25% by year’s end, according to an Aug. 4 letter to stockholders.

Ralph Lauren Corp.

Chief Financial Officer Justin Picicci predicted Thursday that the fashion company’s gross profits would rise year-over-year. But tariffs, he said, are its biggest “pressure point” as the rest of the year plays out.

“While our consumer trends remain consistent with recent quarters, we continue to take a more cautious view on the second half of the year,” Picicci said. “If you think about this year, we know that the cost inflation pressure will disproportionately impact North America.”

Bio-Techne Corp.

Life sciences company Bio-Techne was on track for double-digit growth before uncertainties around National Institutes of Health funding and tariffs stunted progress, Chief Financial Officer Jim Hippel said on an Aug. 6 earnings call. The possibility of pharmaceutical tariffs adds another degree of instability, Chief Executive Officer Kim Kelderman said on the call.

Steris Plc

The medical equipment company revised its 2026 fiscal year outlook to account for an estimated $45 million tariff-related profit dent, Chief Executive Officer Daniel Carestio said on a Thursday earnings call. That’s up from its previous estimate of $30 million as higher metals tariffs drive up costs, Chief Financial Officer Mike Tokich said.

Ball Corp.

Aluminum manufacturer Ball Corp. is used to using its Monterrey, Mexico, plant for North American shipping. But tariffs on goods that cross the US-Mexico border could create a “tighter landscape” in the Southwest and Texas in particular, Chief Executive Officer Daniel Fisher said on an Aug. 5 earnings call.

“The wildcard is just going to be, ‘Can we use those facilities in Mexico as relief valves as we historically have for the last decade or so?’ ” he said.