Standard & Poor's Global: Trump Tariffs will Cause Global Businesses to Lose Over $1.2 Trillion This Year

According to the latest white paper analysis released by S&P Global on Thursday, the Trump administration's tariff policy is expected to cost global businesses over $1.2 trillion by 2025, with most of the costs ultimately passed on to consumers. The report points out that this estimate may still be conservative, based on research results from about 15,000 analysts on 9,000 listed companies. The author of the report, S&P Global researcher Daniel Sandberg, said, "Tariffs and trade barriers are equivalent to taxing the supply chain, transferring corporate cash flow to the government; logistics delays and rising freight costs further amplify the impact. This essentially is a transfer of wealth from corporate profits to workers, suppliers, governments, and infrastructure investors." Since April of this year, the Trump administration has imposed a 10% tariff on all goods imported to the United States, and implemented "reciprocal tariffs" on goods from multiple countries. Subsequently, the White House has added tariffs on various categories including cabinets, cars, and wood. Although the Trump administration insists that the main burden will be borne by exporting countries, S&P Global research shows that only about one-third of the costs are absorbed by businesses, with the remaining two-thirds being borne by consumers. Among the sample included, listed companies directly lose about $907 billion, with the rest coming from the indirect impact on unlisted companies, private equity funds, and venture capital. Sandberg noted, "Consumers are now paying higher prices for the same goods and getting less value, which means that the burden is twice that of companies or is simply underestimated." The Federal Reserve believes that tariffs have a one-time price impact and will not lead to long-term inflationary pressure. S&P analysts also found that market consensus supports this view. According to the report, analysts expect corporate profit margins to shrink by 64 basis points in 2025, narrowing to 28 basis points in 2026, and further decreasing to 8 to 10 basis points from 2027 to 2028. "2025 is the year when profit decline is certain, and 2026 and 2027 will test whether the market's confidence in rebalancing is reasonable," the report states. "In an optimistic scenario, profit margins will eventually return to pre-tariff levels, but whether this can be achieved depends on the ability of businesses to respond in technology, cost control, and global value chain restructuring." The report points out that the Trump administration's cancellation in May of the tax exemption policy for goods under $800 was a "turning point" that significantly exacerbated the impact of tariffs. Previously, this policy allowed low-cost goods to bypass tariff barriers, but it had become politically untenable. Sandberg said, "When exemptions were lifted, the impact was immediately reflected in shipping data, financial reports, and executive comments." He added, "If the current turmoil is only temporary, then this wave of tariffs and supply chain restructuring can be considered as short-term friction rather than long-term structural tax burden on businesses."