FedEx has seen massive declines in shipping across the Pacific Ocean amid fallout from President Donald Trump's trade war, according to a report.
The company projects its revenue will be flat or increase up to 2% in its fiscal first quarter, the Wall Street Journal reported Tuesday, but it didn’t share projections for the full year, something it had previously done. Additionally, Chief Financial Officer John Dietrich said FedEx expects to see an additional $170 million cost in adjusted operating income this quarter due to Trump's tariffs.
“The macroeconomic environment remains uncertain,” Dietrich said, according to the report. “Our outlook is therefore based on current tariff rates, recent trends we’re seeing, as well as that which we’re hearing from our customers.”
FedEx plans to slash some of its workers in Europe as it tries to reduce costs and prepare for possible changes to customer demand.
“There’s a lot happening outside of FedEx,” CEO Raj Subramaniam said in a call with analysts, according to the report. “Trade policies are evolving and trade patterns are changing.”
As of April, a 10% tariff applied to nearly all goods imported into the United States from every country. This universal tariff affects most ocean and air freight shipments entering the country, hiking the cost of importing goods.
Goods shipped from China face even higher tariffs, with rates reaching 60% or more for certain items.
Trump's tariffs have been felt by industries including farming, clothing, hotels and more.
