Director of Research Jim Kelleher, CFA, has surveyed the Argus analyst team about the impact of tariffs on companies in the Argus Universe of Coverage. The tariff environment is dynamic, to say the least. The White House has levied tariffs or threatened to levy tariffs, but often paused, postponed, or withdrawn pledged tariffs. Most recently, China and the U.S. agreed to reduce baseline tariffs to 10% for 90 days (30% in the U.S. reflecting a 20% fentanyl penalty). More than the tariffs themselves, the lack of a finished tariff infrastructure complicates business planning, staffing decisions, and capital investment. Within this dynamic environment, companies are focused on taking actions in areas they can control and planning proactively for a range of tariff scenarios. Companies are anticipating both direct and indirect tariff impacts. Direct impacts would include higher costs for imported finished goods and components, foregone sales as a result of reciprocal tariffs in other nations, and other factors. For example, a manufacturing company would face direct impacts as it pays higher prices for imported parts. Indirect impacts would include a slowing in business related to a broad softening in the economy. All companies likely will feel indirect impacts. A utility, for example, could begin to see a slowing in industrial and commercial kilowatt-hour sales, particularly in niches such as warehousing, trucking and rail, and other freight-related functions. We asked Argus analysts to survey their companies for their commentary on direct and indirect tariff impacts, as well as actions these companies are taking to mitigate the challenging trade environment. Nearly every company in Argus analyst coverage has issued commentary regarding tariffs, much as (five years ago) nearly every company in coverage had something to say about the then-developing COVID-19 pandemic. Below we offer a sampling of company responses to the unfolding tariff environment across a range of sectors and industries. We intend to update our survey on a regular basis at least until the tariff environment, in whatever shape or form, becomes a stable part of the U.S. economy.

Tractor Supply is the largest operator of retail farm and ranch stores in the United States. The company targets recreational farmers and ranchers and has little exposure to commercial and industrial farm operations. Currently, the company operates 2,311 of its namesake banners in 49 states, along with 206 Petsense by Tractor Supply stores. Stores are generally concentrated in rural communities rather than urban and suburban areas. In fiscal 2024, revenue consisted primarily of livestock, equine & agriculture (26%), companion animal (25%), and seasonal & recreation (23%).

Tractor Supply is the largest operator of retail farm and ranch stores in the United States. The company targets recreational farmers and ranchers and has little exposure to commercial and industrial farm operations. Currently, the company operates 2,311 of its namesake banners in 49 states, along with 206 Petsense by Tractor Supply stores. Stores are generally concentrated in rural communities rather than urban and suburban areas. In fiscal 2024, revenue consisted primarily of livestock, equine & agriculture (26%), companion animal (25%), and seasonal & recreation (23%).

The job market remained healthy in April amid concerns it is poised to slow from tariffs, job cuts at government agencies, and falling business and consumer confidence. Employment conditions in the coming months are likely to determine whether the 0.3% drop in first-quarter GDP remains contained or becomes a recession. The Bureau of Labor Statistics (BLS) reported that the U.S. economy generated 177,000 nonfarm jobs in April, above our near-consensus forecast of 130,000. March's payrolls were revised lower by 43,000 and February by 15,000. The April result and the revisions to past results raised the three-month average to 155,000 from 152,000. Nonfarm payrolls are one of the indicators that the National Bureau of Economic Research (NBER) says it watches closely in assessing whether the U.S. is in a recession. We believe the monthly increase in April payrolls and 1.2% growth on a year-over-year basis are encouraging. The BLS diffusion index indicated that more than half of 250 private industries are hiring. The April unemployment rate remained at 4.2%. Average hourly earnings increased six cents month to month and are 3.8% higher year over year, in line with our estimate. The average workweek remained at 34.3 hours. Employment continued to trend up in healthcare, transportation and warehousing, financial activities, and social assistance. Employment showed little change in mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; information; professional and business services; leisure and hospitality; and other services. The manufacturing sector lost 1,000 jobs. Motor vehicles and parts were down 4,700. Healthcare added 51,000, while federal government employment fell by 9,000. After the report, stock futures rose, as did the yield on the 10-year Treasury. Based on futures trading, the probability that the funds target will remain unchanged at next week's meeting remained above 90% and expectations for a June cut declined to 46% from 58%.