Headlines
Early quarterly earnings reveal businesses adapting to Trump's tariffs
Published by Global Banking & Finance Review®
Posted on October 23, 2025
4 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 23, 2025
4 min readLast updated: January 21, 2026
Global companies adapt to Trump's tariffs, showing stronger-than-expected earnings. Strategies include cost-cutting and shifting production to mitigate impacts.
By Marie Mannes, Alexander Marrow and Vera Dvorakova
STOCKHOLM/LONDON/GDANSK (Reuters) -Some of the world's biggest producers of food, consumer goods and cars delivered stronger-than-expected quarterly results on Thursday, easing investor concerns over the toll of U.S. President Donald Trump's import tariffs.
Ahead of the third-quarter earnings season, global companies had warned of more than $35 billion in tariff-related costs as U.S. duties reach their highest since the 1930s. They're also contending with disrupted supply chains, weaker consumer confidence and higher input costs.
As Trump continues to wield trade policy as a negotiating tool, executives still face regular threats of further tariffs and worries that tariffs will lead to higher inflation and hurt household budgets.
On Thursday, the busiest day for results so far this earnings season, some results suggested businesses are finding ways to pass on higher costs to customers or cut them - helping fuel stock market rallies.
DELIVERING FASTER COST CUTS
Take Sweden's Volvo Cars: the company's third-quarter earnings smashed analysts' expectations, sending its shares up as much as 40%, as a sweeping cost-cutting programme launched by CEO Hakan Samuelsson began to pay off.
The company is among the European carmakers most exposed to Trump's tariffs as most of its U.S.-bound cars are exported from Europe.
"What we're now seeing is really, wow okay, this is delivering faster than we thought and faster than we planned," Samuelsson said of the cost reductions.
Gross profit margin rose to 24.4% from the previous quarter's 17.7%. To further counter tariffs, it plans to move production of some hybrid models to America in the coming years.
Britain's Unilever, another multi-national with a new CEO at the helm, also reported quarterly sales growth that topped expectations, driven by demand for beauty products across North America despite cautious consumer sentiment.
Like its peers, the maker of Dove soap and Hellmann's mayonnaise has been streamlining operations to reduce costs and CEO Fernando Fernandez is focusing on premium products to lift margins.
Earlier this week, German sportswear giant Adidas raised its full year operating profit guidance, saying it had managed to mitigate some extra costs from higher U.S. tariffs.
Hasbro on Thursday raised its full-year forecasts, betting on holiday season sales and demand for its digital gaming segment, even as macroeconomic uncertainties cast a gloom on spending among American shoppers.
Ford is scheduled to report results later on Thursday.
Evidence so far in the U.S., shows spending by more affluent consumers is helping to bolster overall consumption whilst lower- and middle-income consumers are being more cautious due to persistent worries about inflation.
MORE CHALLENGING MARKETS FOR SOME
After a prolonged period of uncertainty and turbulence, the early crop of earnings gives an insight into industries and regions most heavily hit and the strategies companies have adopted to mitigate costs.
So far, the EU, Japan and Britain have struck trade deals with the U.S. to lower tariffs.
Swedish tissue maker Essity, like many consumer goods companies, has been hiking prices to cover rising costs. It unveiled plans to cut jobs and split its consumer business, which CEO Ulrika Kolsrud hopes will help in a "challenging" market.
Demand from restaurants and hotels for Essity's napkins and paper towels has fallen over the past two quarters.
French tire-maker Michelin, also facing challenging markets, lowered its 2025 outlook due to the weakness in North America.
CEO Florent Menegaux cited a tough U.S. economic picture.
"The real economy, the goods economy, isn't working at all," he said.
"We can see this because trucks aren't running, the confidence level among transport companies is plummeting."
REASSURING NEWS MAY FURTHER FUEL STOCK MARKETS
Big rallies in some of the market's most beaten-down shares like Volvo Cars illustrate the relief among investors when things may not be as bad as feared.
That is adding fuel to prolonged U.S. and European stock market rallies, especially when expectations are low.
European companies are forecast to report an increase of just 0.2% in third-quarter earnings, on average, which would be the worst quarterly performance since the first quarter of 2024.
Out of 78 companies in the U.S. S&P 500 index that have reported earnings so far, 87% have reported earnings above analysts expectations.
(Reporting by Marie Mannes in Stockholm, Alexander Marrow in London, Vera Dvorakova in Gdansk and Gilles Guillaume in Paris;Writing by Josephine Mason; Editing by Elaine Hardcastle)
Consumer confidence is a measure of how optimistic or pessimistic consumers are regarding their expected financial situation. It influences their spending and saving behaviors.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured annually.
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