S&P analysis of 9,000 companies worldwide finds the real cost of tariffs and other corporate costs: $1.2 trillion | Fortune

"President Donald Trump's tariffs are leading a trillion-dollar corporate squeeze, most of which is inevitably falling on consumers' shoulders, an S&P Global report finds. 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, published Thursday. It also reflects factors including wage increases and energy prices, and rising capital expenditure, particularly in AI infrastructure, S&P added."

""Global corporate margin expectations have contracted sharply" by about 0.64%, or $907 billion in lost profit among firms covered by sell-side analysts, the report said. This "wedge" is roughly made up of an increase of $600 billion in revenue forecasts and a $300 billion fall in earnings estimates. Sell-side analysts cover the largest global retailers like Walmart, Amazon and Costco Wholesalers. Of the estimated $907 billion lost, roughly two-thirds, or $592 billion, is being passed to consumers via higher prices."

"Sell-side analysts cover the largest global retailers like Walmart, Amazon and Costco Wholesalers. Of the estimated $907 billion lost, roughly two-thirds, or $592 billion, is being passed to consumers via higher prices. "One-third ($315 billion) is absorbed internally through lower earnings," the report said. But "real output" is declining, meaning fewer goods are actually being produced by these companies, suggesting consumers are actually paying more than two-thirds of this profit loss, according to the report."

Tariffs, wage increases, higher energy costs, and rising capital expenditure—especially AI infrastructure—are driving at least $1.2 trillion in additional corporate losses this year compared with early-year expectations. Corporate expenses are now estimated at $53 trillion for the year after revised forecasts. Analyst coverage of roughly 9,000 public companies representing $111 trillion of global equity shows corporate margin expectations contracting about 0.64%, equating to $907 billion in lost profit. That loss reflects a $600 billion increase in revenue forecasts alongside a $300 billion earnings decline. About two-thirds of the lost profit—roughly $592 billion—is passed to consumers via higher prices, while approximately $315 billion is absorbed through lower earnings; declining real output suggests consumers are shouldering more than two-thirds of the burden.

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