Picture This: Company Sentiment on Tariffs Turns More Negative in Earnings Calls

What we know

The net negativity regarding tariffs on corporate earnings calls worsened again during the quarter, likely reflecting final details on Aug. 1 of IEEPA duties and with it more tangible sense of cost of tariffs.

Overall mentions of tariffs were down by 35% sequentially in calls held during the third quarter after seven straight quarters of increases, showing tariffs are largely a business-as-usual item rather than a novelty.

Net negativity worsened to minus-11.4% from -5.2% a quarter earlier and worse than the first quarter level, with the materials sector leading the downturn alongside consumer staples. A worsening of sentiment in the industrials sector came before the latest round of Section 232 duties, while technology worsened even ahead of a resolution of tariffs on semiconductors.

Why this matters

The muted trade activity and declining shipping rates may signal broader economic challenges, affecting corporate profitability and investment decisions.

The delay in strategic investments until 2026 highlights the need for businesses to prepare for potential shifts in the tariff landscape, ensuring readiness for future market conditions.

The ongoing tariff reviews and potential new trade deals could reshape global trade patterns, particularly for US imports from key partners like China and India.

Industries reliant on electronics and raw materials may face increased costs and supply chain disruptions if tariffs are implemented or adjusted.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.