Mon, 28 Jul 2025

Mon, 28 Jul 2025 US companies up against 'nightmare' tariff wall

Businesses both small and large are already reckoning with Trump's tariffs, and new levies are set to start this week.

* Donald Trump has imposed new and higher tariffs on imports, starting with goods from China and expanding to nearly every country in the world.
* The average tariff rate on US imports has risen to 10-50% compared to less than 2.5% at the start of the year.
* Many businesses are struggling to cope with the increased costs, including: + Village Lighting Company owner Jared Hendricks, who took out a $1.5m loan to cover unexpected tariff costs and is now worried about paying payroll. + General Motors, which paid over $1bn in tariffs from April-June despite some exemptions. + Tesla, which spent an extra $300m on tariffs. + Toymakers Hasbro and Mattel, who expect tens of millions in tariff costs and have reduced their sales forecasts.
* Economists predict the levies will lead to slower growth in the US as company profits take a hit and firms cut back on investing or raise prices.
* Some businesses are raising prices to pass on the cost of tariffs, while others are considering looking outside the US to expand.
* Goldman Sachs analysts estimate the tariffs will lower US growth by 1 percentage point this year, while other economists predict a smaller impact.
* Consumer spending has been affected, with discretionary services like taxi rides and air travel seeing a decline in the first five months of the year.
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