(Corrects company description in paragraph 3)

By Noel Randewich

SAN FRANCISCO, July 20 (Reuters) – Tariffs are starting to
bite big manufacturers and Wall Street could get another bout of
caution and uncertainty from major industrial companies when a
swath of reports comes in over the next week.

Investors are worried about the impact on earnings should
the United States’ trade war with China and other major trading
partners escalate. Deutsche Bank in June estimated that an
escalation of the dispute to include $200 billion of imports
would hit earnings growth by 1-1.5 percent.

“If today’s political rhetoric intensifies and translates
into actual protectionist policies, it will be a negative for
all businesses in the U.S. and abroad, including ours,” Hamid
Moghadam, chief executive of real estate investment trust
Prologis, warned on a conference call on Tuesday.

Manufacturers across the country are concerned about
Washington’s recent trade policies, with some saying that
uncertainty related to tariffs was already hitting them,
according to anecdotes collected by the U.S. Federal Reserve in
its Beige Book, released on Wednesday.

That is starting to show up in early reports by companies.
Earnings from Honeywell International, General Electric
and Stanley Black & Decker show companies facing
higher costs due to already enacted tariffs, and uncertainty
about tariffs on as much as $500 billion in Chinese goods
threatened by Trump.

GE said it expects tariffs on its imports from China to
raise its costs by up to $400 million and Alcoa said the
tariffs led to an extra $15 million in costs.

Second-quarter corporate earnings seasons kicks into gear
starting on Monday, with results on tap from companies including
Corning, Ford Motor, 3M Co and Boeing
, which has fallen nearly 2 percent since the start of

The United States in March said it would impose tariffs on
steel and aluminum, and on July 1, Washington and Beijing
applied tariffs on $34 billion worth of each other’s goods.
Trump has threatened additional tariffs, possibly targeting more
than $500 billion worth of Chinese goods – roughly the total
amount of U.S. imports from China last year.

Since March 1, S&P 500 industrials have fallen
nearly 3 percent, reflecting the sector’s dependence on
international commerce. The S&P 1500 steel index
has lost 1 percent since March 1, as investors worry that a
slowdown in global demand could offset U.S. steelmakers’
benefits from tariffs against their foreign competitors.

Many of the roughly 180 S&P 500 companies reporting their
results next week are not directly exposed to China, but they
may still have reasons for concern.

“There are companies that might not be significantly
impacted by tariffs from a cost perspective, but from the
uncertainty around it,” said Kurt Brunner, a portfolio manager
at Swarthmore Group in Philadelphia, Pennsylvania. “They could
see customers holding off on spending because they don’t know
what is going to happen.”

Harley-Davidson, which said last month it would move
some of its motorcycle production abroad as a result of the
European Union’s retaliatory tariffs, reports its results on

Qualcomm, reporting on July 25, depends on China for two
thirds of its revenue. The U.S. chipmaker is also facing a
drawn-out wait for Chinese regulators to approve its $44 billion
takeover of NXP Semiconductors, a delay widely seen as
connected to the trade conflict.

A strong U.S. economy and deep corporate tax cuts have
fueled a 5 percent increase in the S&P 500 this year, even as
Wall Street worries about the tariffs’ impact.

Super-charged by deep corporate tax cuts, S&P 500 earnings
are expected by analysts to grow 22 percent in the June quarter
and 23.1 percent in the September quarter, according to Thomson
Reuters I/B/E/S. Estimates for the September quarter are likely
to change as companies provide their outlooks over the next few

“The market is looking through Trump’s trade negotiations
and governing style because of this strength. However, we are
more cautious on the trade overhang and think headline risk,
both to the upside and downside, will remain high,” EventShare
Chief Investment Officer Ben Phillips wrote in report on
(Reporting by Noel Randewich, editing by Megan Davies)