President Donald Trump\u2019s tariffs are leading a trillion-dollar corporate squeeze, most of which is inevitably falling on consumers\u2019 shoulders, an S&P Global report finds.<\/p>\n
Companies will lose at least $1.2 trillion more this year than they expected before the year began and the picture on trade and tariffs dramatically changed, according to the report<\/a>, published Thursday. It also reflects factors including wage increases and energy prices, and rising capital expenditure, particularly in AI infrastructure, S&P added.<\/p>\n S&P estimates $53 trillion in company expenses for this year, revising its January 1 forecast. The report\u2019s analysis pulled from forecasts from more than 15,000 analysts following roughly 9,000 public companies, which represent $111 trillion of the $130 trillion global equity market, or some 85%.<\/p>\n \u201cGlobal corporate margin expectations have contracted sharply\u201d by about 0.64%, or $907 billion in lost profit among firms covered by sell-side analysts, the report said. This \u201cwedge\u201d is roughly made up of an increase of $600 billion in revenue forecasts and a $300 billion fall in earnings estimates.\u00a0<\/p>\n Sell-side analysts cover the largest global retailers like Walmart<\/a>, Amazon<\/a> and Costco<\/a> Wholesalers. Of the estimated $907 billion lost, roughly two-thirds, or $592 billion, is being passed to consumers via higher prices.<\/p>\n \u201cOne-third ($315 billion) is absorbed internally through lower earnings,\u201d the report said.\u00a0<\/p>\n But \u201creal output\u201d is declining, meaning fewer goods are actually being produced by these companies. <\/p>\n The analysis extends beyond the 9,000 public firms to include increased forecasted expenses of about $155 billion for \u201cuncovered public firms\u201d as well as $123 billion for private equity- and venture capital-backed firms. Together, this brings the total incremental cost to $1.2 trillion in 2025, according to the report.<\/p>\n Debate still rages over who\u2019s shouldering the brunt of tariff-driven price hikes.<\/p>\n Trump-appointed Fed Governor Christopher Waller said<\/a> in a speech on Thursday effects of tariffs on inflation have been modest and mostly felt by higher-income households, as \u201cthe highest-earning 10% account for 22% of personal consumption.\u201d Spending data indicate little to no inflationary effect \u201cdown the income scale,\u201d and any price pressures have not significantly eroded the purchasing power of less affluent households, Waller added.<\/p>\n