Good morning. As tariffs are set to put pressure on supply chains, pricing remains top of mind for corporate leaders.
“Tariff trouble: Consumer goods most affected by reciprocal rates,” is a new analysis by S&P Global Market Intelligence. The Trump administration’s new tariffs will add 10 percentage points to import duties from many countries. And this will exclude sectors such as metals, chemicals, and autos, which will have their own tariffs. That means the supply chains most affected will be finished consumer goods, including clothing, toys, and smartphones, according to Chris Rogers, head of supply chain research at S&P Global Market Intelligence. These sectors face additional duties in the order of 27 to 30 percentage points on a weighted average basis, he noted.
Corporate supply chain managers are likely to incorporate the new tariffs into their pricing and cost-negotiation strategies in the near term, Rogers said. Options to reshore sourcing are limited due to the “sheer breadth of coverage of the duties,” he said.
Corporate leaders have been navigating tariff uncertainty for quite some time. So it continues to be a dominant topic on earnings calls. I checked in with John Butters, VP and senior earnings analyst at FactSet, for his latest analysis. From Dec. 31 through March 14, the terms “tariff” or “tariffs” were mentioned on the earnings calls of 263 of the S&P 500 companies, Butters said. Overall, 487 of the S&P 500 companies conducted earnings calls over this period.
And, from March 15 through April 4, 16 of the 18 S&P 500 companies that conducted earnings calls mentioned “tariff” or “tariffs,” he added.
As we head into mid-April, when many companies are scheduled to release their Q1 2025 earnings reports and conduct conference calls, talk of tariffs will certainly come up, but perhaps discussed from a different angle.
In recent earnings calls, firms were vocal in discussing strategies and “the net negativity of tariffs,” according to the S&P Global report. However, companies may be cautious in making short-term announcements to “avoid reactions from the Trump administration,” the report states.
“We’d expect firms to talk about price increases for customers and cost negotiations with suppliers as a major strategy during the earnings call season,” Rogers said. “Discussions on long-term plans, including whether to move manufacturing and sourcing to the U.S., could be muted given the ongoing uncertainty on the final picture for tariffs.”
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Fortune 500 Power Moves
Brian Newman has been appointed EVP and CFO of CVS Health (No. 6), effective April 21, the company announced Tuesday morning. Newman will succeed current CFO, Tom Cowhey, who began the role in January 2024. Cowhey, with CVS Health since 2022, will transition to serve as a strategic advisor to the president and CEO David Joyner, effective May 12. Joyner began his tenure as CEO in October.
Newman was most recently EVP and CFO of United Parcel Service. Before UPS, he spent 26 years with PepsiCo and served in finance leadership roles across Europe, Asia, and North and South America.
CVS Health also announced that its financial closing procedures for Q1 2025 are “not yet complete and, as a result, expected results for the full year may change due to such financial closing procedures, final adjustments, management's review of results, and other developments that may arise between now and the time our financial results for the first quarter of 2025 are finalized.”
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Mike Hansen will retire from his role as EVP and CFO of Cintas Corporation (No. 437), effective May 31. Hansen will transition to a new role as assistant to the CEO. Scott Garula, currently president of Cintas’ rental division, will succeed Hansen as EVP and CFO. Garula joined Cintas in 1996 as an accountant and has held various leadership positions within the company, including key roles within the finance team and was president of First Aid and Safety and Fire Protection before becoming president of the rental division.
Big Deal
A new Pew Research Center report examines the perception of artificial intelligence by the American public and experts in the field of AI, including how the technology will impact the workplace.
Surveys reveal both deep divides and common ground on AI. For example, 73% of AI experts surveyed say AI will have a positive impact on how people do their jobs over the next 20 years, compared to 23% of U.S. adults who share the same sentiment, according to the report.
However, both groups, 55% of U.S. adults and AI experts 57% of AI experts, say they want more control over how it is used in their lives.
Going deeper
JPMorgan Chase CEO Jamie Dimon’s annual shareholder letter was published on Monday. “The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” Dimon writes. “And even with the recent decline in market values, prices remain relatively high. These significant and somewhat unprecedented forces cause us to remain very cautious.”
The bank constantly evaluates various potential outcomes (tabletop exercises) to be able to handle a range of scenarios, according to Dimon. “One of the largest risks we face is cyber attacks, both directly on our bank and on critical infrastructure; e.g., energy, communications,” he writes. “We also look at other potential large risks, such as war, hybrid and cyber warfare, energy disruptions and ongoing global threats, among other dangers.”
Overheard
“We already know that women founders excel at driving revenue in a low-resource environment. Now, AI makes it easier for them to scale that revenue, too.”
—Leslie Feinzaig, founder and general partner of the venture firm Graham & Walker, and founder of the Female Founders Alliance, writes in the Fortune opinion piece, “I’ve spent years helping female founders access capital. Now that they have AI, they might not need to.”