'S&P500 Companies Mention "Tariffs" 191 Times in Earnings Reports'

Most in Five Years... "Multiple Scenarios"
'Immigration' Mentioned 28 Times... "Rising Employment Costs"
Department of Government Efficiency and Gulf of Mexico Frequently Discussed

On the 17th (local time), US CNBC reported that mentions related to key policies of the Trump administration, such as tariffs and immigration, increased during the earnings conference calls of the top 500 US companies. Tariffs are factors that affect corporate earnings and competitiveness because rising import prices can lead to higher consumer prices, thereby suppressing consumption, while tightened immigration policies can increase employment costs.

The most frequently mentioned policy was "tariffs." According to an analysis of data from market research firm FactSet by CNBC, tariffs were mentioned 191 times in this year's S&P 500 earnings announcements. "Tariff Man" Donald Trump, the US president, announced a 25% tariff on Canada and Mexico but delayed its implementation, and from the 4th of this month, decided to impose an additional 10% tariff on China. His tariff offensive does not stop there; starting from the 12th of next month, 25% tariffs will be imposed on aluminum and steel respectively, and from April 1, reciprocal tariffs will be applied to countries worldwide.

Donald Trump, President of the United States. Photo by Reuters-Yonhap News

Mentions related to tariffs increased significantly from the end of last year, ahead of President Trump's return to the White House. According to CNBC's analysis of FactSet data, tariffs were mentioned 175 times in last year's earnings announcements, with about half of those occurring during the fourth quarter. Tariff mentions peaked during the first term of the Trump administration, with 491 mentions in 2018 and 550 in 2019. This is the highest number in five years.

Several companies noted that they have not yet reflected the potential impact of Trump's tariff policies in their guidance and mentioned uncertainty about what policies might emerge. James Nicholas, CFO of building materials company Martin Marietta Materials, said that depending on how tariffs are implemented, suppliers' profits could either increase or decrease. R. Scott Herren, CFO of Cisco, said they have planned for the implementation of Trump's tariff policies in any form, stating, "We have included multiple scenarios and stages in our plans depending on what actually happens."

The second most mentioned Trump administration policy was immigration, cited 28 times. CNBC analyzed that while immigration discussions tend to increase in the first year of a new administration, the number of mentions this year surpassed those during the 2013 Barack Obama administration (16 times) and the 2021 Joe Biden administration (18 times). Immigration was mentioned 37 times at the start of Trump's first term in 2017.

During this conference call, many questions were raised about the impact of the Trump administration's immigration and tariff policies on corporate activities. The three major US telecom companies?AT&T, Verizon, and T-Mobile?reported inquiries about whether slowed immigration would affect demand for certain phone plans. REITs Equity Residential responded that questions about lease violations due to forced tenant evictions related to immigration had not increased. Hamid Moghadam, CEO of logistics REIT Prologis, predicted that forced deportations of immigrants could reduce the labor pool in Southern California and increase employment costs.

The Department of Government Efficiency (DOGE) and the Gulf of Mexico (America Gulf) were also frequent topics during this conference call. DOGE was mentioned in more than 15 calls as of the morning of the 14th. As DOGE moves to cut spending, contracts between public enterprises and federal agencies are at risk, causing Wall Street to be on edge. Shyam Sankar, CTO of Palantir, said, "DOGE will bring meritocracy and transparency to the government, which is the essence of our commercial business." Document management company Iron Mountain saw its stock plunge after DOGE head Elon Musk, Tesla CEO, criticized its operating methods. However, Bill Minni, Iron Mountain CEO, said, "As the government strives to operate efficiently, we see this as a continuing opportunity for the company."

President Trump issued an executive order on the 20th of last month, shortly after taking office, to rename the Gulf of Mexico as the Gulf of America. Chevron used the name Gulf of America in its earnings announcement, while competitor ExxonMobil referred to the area as the Gulf of Mexico.