US Tariff Turbulence Vexes Companies Disclosing Financial Risks

Tariff policy turmoil has made disclosure of possible business impacts a moving target for top publicly traded companies.

Companies like Tesla Inc. and Nike Inc. are talking about tariffs in their Form 10-Q quarterly financial updates even as the shifting status of US policy makes assessing potential risks and impacts challenging. Businesses must meet reporting requirements regarding “known uncertainties” or potentially face scrutiny by the US Securities and Exchange Commission and investors.

“Companies need to strike a balance between providing sufficient disclosure to provide useful information to investors to assess future results and providing too much disclosure that will not be useful because the environment is changing so quickly,” said Olga Usvyatsky, an accounting analyst.

SEC staff have received questions about what companies are required to disclose in uncertain environments, Heather Rosenberger, chief accountant for the agency’s division of corporation finance, said at a May conference.

Even if companies can’t assess the likelihood of a “known uncertainty” hitting their business, disclosure in a section of the filings called management’s discussion and analysis, or MD&A, is required if that risk would be reasonably likely to have a material, or significant, impact on the company’s financial condition or operations if it occurs, Rosenberger said.

President Donald Trump announced a 90-day pause April 9 on higher tariffs against dozens of countries, just hours after the escalated duties took effect. Last month, many of Trump’s tariffs were blocked by a court—and then temporarily reinstated after an appeal. Talks between the US and global trading partners are ongoing.

This volatility creates a complex backdrop for public company reporting, said Kristen Jaconi, executive director of the Peter Arkley Institute for Risk Management at the University of Southern California Marshall School of Business. Still, the Covid-19 pandemic was among other times that prepared management for acclimating to uncertainty.

“It’s just an environment where you have to constantly update your views,” Jaconi said. “You have to be flexible to the situation.”

Tariff Disclosure

More than 300 companies in the S&P 500 index mentioned the word “tariff” in the MD&A section of their first quarter of 2025 reports. That compares to only 86 tariff mentions in that portion of early 2024 filings, according to financial data platform Calcbench.

MD&A sections of quarterly filings include company leaders’ perspective on performance. Overall, 10-Q filings provide investors with snapshots of financial results throughout the year.

“It’s clearly on their minds—the number of references that they give,” said Pranav Ghai, Calcbench’s co-founder and CEO.

Photo illustration: Jonathan Hurtarte/Bloomberg Law

Some companies filed their latest 10-Qs in April and May after previously filing reports last fall before Trump’s tariff announcements. Others’ spring 10-Qs came after reports filed in January. Filing dates depend on companies’ fiscal year.

While some businesses like Nike provided high-level information about tariff uncertainty, others like Ford Motor Co. divulged more specific details about the duties. The automobile manufacturer said in its 10-Q that its costs related to tariffs implemented or increased in 2025 totaled about $200 million in the first quarter.

Northrop Grumman Corp.’s 10-Q, filed April 22, features the word “tariff” eight times in its MD&A after mentioning the word once in the first quarter report for 2024 filed last April, according to Calcbench.

Higher tariffs on imported goods could impact the global market for defense products, Northrop Grumman noted in its Form 10-K annual report filed Jan. 30. The aerospace and defense firm said in its 10-Q it’s evaluating potential impacts and doesn’t believe “the tariffs in effect at this time will have a material adverse effect on our business.”

The firm acquires about 5% of its supply chain, less than $1 billion, outside the US, Northrop Grumman chair, CEO, and president Kathy Warden said May 28 at a conference.

Details about possible supply chain impacts have been common among business disclosures on tariffs, Usvyatsky, the accounting analyst, said.

Tesla cited possible supply chain impacts in another section of the 10-Q focused on risk factors. While the automaker told investors it strives for a strong domestic supply chain for electric vehicles and lithium-ion batteries, “certain parts and components are difficult or impossible to source” in the US.

Nike and Tesla didn’t respond to requests for comment. Ford said it didn’t have additional comments.

Photo illustration: Jonathan Hurtarte/Bloomberg Law

Even with disclosure requirements, there’s still going to be variation in what businesses tell investors that’s up to management discretion, North Carolina State University assistant accounting professor Carly Burd said.

“If there’s no materiality requirement, then they’re going to decide ‘how much should we provide investors?’” Burd said.

Best Practices

Companies should be mindful not to fall into “the trap of providing the same generalistic disclosure quarter over quarter,” Usvyatsky said.

Usvyatsky said she expects companies to revisit disclosure control policies, which are designed to ensure information released to investors is timely and accurate.

Communication across teams is important given the variety of ways tariffs may affect the enterprise, said Don Pagach, director of research for the Enterprise Risk Management Initiative at North Carolina State University’s Poole College of Management.

USC’s Jaconi shared that sentiment, suggesting the finance, legal, compliance, and investor relations teams be involved as companies assess tariffs’ potential impacts.

Companies should also ensure disclosures address areas specifically of interest to investors, such as their manufacturing footprints and possible mitigation strategies, according to Mateo Millett, a senior managing director at FTI Consulting.

The SEC didn’t respond to a request for comment on companies’ tariff-related financial disclosures.

Companies spanning the beverage to consumer electronics industries flagged tariffs as a risk to business in 10-K annual reports filed earlier this year.

Disclosure has benefits for companies, especially as businesses look to communicate varied degrees of exposure and level set with investors about potential negative impacts.

“Investors hate uncertainty more than they hate bad news,” said Matthew Winters, senior director of financial reporting policy advocacy at CFA Institute.