By Theo Francis

Executives are starting to chill out about tariffs after a year of anxiety.

Months into President Trump's roller coaster of a global trade war, something has shifted. Business leaders sound less gloomy about tariffs than they have for much of the year. They are talking less about risk when they discuss them with investors. And the subject is no longer dominating earnings calls like before.

"We believe that the worst of the tariff and economic disruptions to our businesses are now behind us," said David Maura, chief executive of Spectrum Brands, which sells everything from pet food to insect repellent, on a call with investors this month.

And for good reason. The real tariffs companies pay have turned out to be lower than the headline figures. Companies paid about 12% of the value of their imports as tariffs in October, consulting firm Oxford Economics estimates. That is about 10 percentage points higher than in January, but well below the most dramatic rates announced by the administration over the course of the year.

The U.S. has meanwhile hammered out new trade agreements, and Supreme Court justices this month questioned Trump's authority to slap levies on nearly every country on Earth. Companies have also gotten better at mitigating the cost -- securing exemptions, raising prices, cutting spending and rearranging supply chains.

The affordability crunch on voters' minds could lead to further relief ahead of next year's midterm elections. Trump dropped 40% tariffs on certain agricultural and food products from Brazil this past week. That is on top of the previous week's rollback of duties on beef, coffee and dozens of other goods in response to Americans' cost-of-living concerns.

Companies have passed along about two-thirds of tariff costs to consumers so far, excluding food and energy, down from closer to 100% in Trump's first term, said Bernard Yaros, lead U.S. economist for Oxford Economics.

Big companies especially had healthy profit margins going into the year and have been able to absorb some of the cost.

"What they're saying is the tariffs are manageable for them," said Parag Thatte, a Deutsche Bank equity analyst.

The Wall Street Journal analyzed data from more than 5,000 earnings calls held by publicly traded U.S. companies this year through Nov. 14. The analysis considered references by executives to tariffs, plus several related terms, in the same sentence as terms denoting risk. NL Analytics, which provided the data from call transcripts, also categorized executives' statements referencing tariffs as positive, negative or neutral.

At Ford Motor, CEO James Farley warned investors in February that tariff proposals at the time "would have a huge impact on our industry, with billions of dollars of industry profits wiped out."

In early May, about a month after Trump announced extensive "Liberation Day" tariffs, Farley projected that tariffs could cut earnings by a net $1.5 billion in 2025, before interest and taxes. Ford later bumped that estimate up to $2 billion.

A respite came this fall when the U.S. made two changes of significance for automakers. One expanded a program offsetting tariffs on some imported auto parts. That softened Ford's estimate of how hard tariffs would hit 2025 results -- cutting its earlier projection by half to $1 billion. The U.S. also jacked up duties on medium- and heavy-duty trucks.

On a late-October earnings call soon after, Ford executives were less negative, data from NL Analytics show. (Neutral mentions weren't considered.)

The heavy-truck tariff doesn't affect Ford, which doesn't import heavy trucks, giving it a relative advantage over competitors that do, executives said.

Hershey entered the second quarter worried about tariffs on cocoa imports and retaliatory duties by Canada, as rising cocoa prices and other factors were also driving up costs. In late October, executives said they could no longer expect a blanket tariff exemption for cocoa imports, and projected a $200 million increase in tariff exposure in 2026.

Still, in the company's Oct. 30 call, finance chief Steven Voskuil cited "maybe a little bit more optimism on tariffs" as well as cocoa prices.

That optimism was borne out: In mid-November, the White House exempted cocoa and dozens of other foods and ingredients from much of the administration's tariff regime.

"Cocoa was more than half of our total exposure, so the tariff impact has improved for '26," a Hershey spokeswoman said.

Other companies are less sanguine.

MasterBrand, billed as North America's biggest residential cabinet maker, was cautious but not pessimistic in May. "I don't think the tariffs are having a massive amount of impact particular to our business," CEO David Banyard told investors then. "We're insulated a bit more than other industries."

One uncertainty executives flagged: potentially significant costs if the administration imposed tariffs on wood-product imports or other materials. Among other factors, MasterBrand imports nearly all of its bathroom vanities from Mexico.

Trump in late September announced new tariffs rising to 50% on kitchen cabinets, bathroom vanities and similar products. Tariffs knocked nearly a percentage point off MasterBrand's gross margin in the third quarter. In October, previously announced duties on imported lumber and wood products kicked in, and MasterBrand said the impact could be as much as 8% of annual net sales before mitigation.

Ultimately, the company expects to offset its ongoing tariff costs, including by raising prices and renegotiating with suppliers. But that takes time, Banyard told investors. "That is the hardest part of this tariff regime," he said. "It comes in fairly quickly, and it takes us time to mitigate it."

Write to Theo Francis at theo.francis@wsj.com

(END) Dow Jones Newswires

November 22, 2025 21:00 ET (02:00 GMT)

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