Large US corporations have begun to cut their internal costs and postpone major financial decisions due to uncertainty caused by US President Donald Trump's trade policy and import tariffs, the Wall Street Journal (WSJ) reports.
First of all, companies are trying to save by hiring new staff, leaving jobs vacant, canceling employee business trips, as well as by reviewing the cost of contracts with external consultants and contractors. At the same time, large firms are trying to avoid radical cuts that could undermine their competitiveness, resorting to targeted solutions. As executives interviewed by the WSJ noted, the uncertainty caused by Trump’s policies does not allow for a review of supply chains and their cost structures, since tariff decisions can be revised many times. In this situation, corporations are trying to reduce some of their costs now to leave room for maneuver as the situation with import tariffs develops.
A large manufacturer of medical equipment, Boston Scientific, as the WSJ notes, has begun to reduce a significant part of its entertainment costs, including travel expenses. The railway operator of the eastern part of the US Norfolk Southern has begun to work on reducing its costs for consulting with various legal and financial firms. Procter &Gamble CFO Andre Schulten also said the company “will need to use all the levers in its arsenal to mitigate the impact of tariffs on its cost structure.”
Some companies have already begun to optimize capital expenditures. For example, Dow Chemical has postponed the start of construction on its new ethylene plant in Canada and has also decided to review its plans to develop plants in Germany and the United Kingdom. Toy maker Hasbro will accelerate its multi-year cost-cutting plan, expecting to save up to $225 million this year.
Representatives of IBM and PepsiCo also told the WSJ that they intend to tighten control over their costs, but did not provide details on which cost items will be reduced.