Trump’s Tariff Campaign Leaves Companies Rethinking Asset Values

Volatile US trade policy is hitting corporate balance sheets, forcing companies to reassess whether assets like goodwill and inventory are still worth what managers paid for them.

A fresh slate of US tariffs will ripple through corporate financial statements in the wake of the Supreme Court’s February ruling that struck down levies the Trump administration imposed on imports from dozens of countries last April. Replacement tariffs of 10% that kicked in Feb. 24 could remain in place into July.

The administration meanwhile is weighing a menu of other trade restrictions, including additional import duties, even as hundreds of companies have lined up to seek refunds.

That uncertain landscape leaves US companies grappling with weaker customer demand, higher costs for goods and materials, and softer profit margins—all triggers for potential asset write-downs. Impairment charges flow through income statements and would dent profits.

Balance sheet pressures are already emerging.

Church & Dwight Co. Inc., the home and personal care products maker, warned investors in February that economic conditions and continued performance problems could spur an impairment of the $644.7 million book value of its Waterpik trade name.

Asset values from real estate to heavy equipment remain in flux a year after automakers booked multi-billion dollar write-downs for their electric vehicle lines due to shifting environmental priorities under the Trump administration. Retailers took smaller charge-offs for inventory and supply chain shifts, like AEO Inc.'s $17 million impairment last spring.

Toymaker Hasbro Inc. pointed to tariffs as the driver for a review of its consumer products line, which was hit by revenue declines for toys and games as retailers retooled their inventory strategies. That led to $1 billion in goodwill impairment costs in 2025.

“You may have slowing economic demand, and you could have rising costs,” said Jed Neilson, associate accounting professor at Penn State University. “Those are probably the two biggest forces that are going to be driving potential write-downs.”

Economic Reality

Impairments costs reflect investments that ultimately didn’t meet revenue expectations and the cash spent or debt acquired to purchase them.

“It’s accounting reflecting the change to economic reality,” said Patrick Badolato, accounting professor at the University of Texas at Austin.

Duties targeting various countries have pushed up costs to produce components for manufacturers and consumer products for retailers. Companies that couldn’t sell those goods at a price to recoup those higher operating costs would likely book an impairment charge.

Inventory write-downs are more straightforward than determining whether goodwill or other long-lived assets should be marked down. Goodwill represents the excess value between the price paid for an acquired product line or business and its book value. An intangible asset, goodwill is based on forecasts and can be tricky to gauge.

On the balance sheet, goodwill captures the value of a brand, a skilled workforce, or even potential future earnings.

“Acquisitions made prior to tariffs now have to be re-evaluated through the lens of the tariff world and that means our inputs in terms of revenues and expenses, which translate to cash flows, should be worse,” Badolato said.

Complex Scenarios

Fresh tariffs enacted in the wake of the Supreme Court ruling bring more complexities for corporate accountants to untangle. That includes weighing a mix of possible trade restrictions when projecting out future cash flows and estimates that back valuations.

Corporate accountants have been looking at those cash flow models more frequently over the past year, watching for triggers that would require impairment testing, said Lara Long, managing director with Riveron’s accounting advisory practice. That will continue for now, she said.

“It’s very volatile and its very uncertain and it just means that CAOs and CFOs have to be much more vigilant,” Long said, referring to chief accounting officers and chief financial officers.

A range of factors could spark asset reviews, including the loss of a big customer or a factory closure. But large economic shifts also would trip those accounting assessments.

Normally those reviews are performed annually—often at the start of the fourth quarter.

Companies are likely to conduct those assessments quarterly this year, especially if the changes could be significant, said Shripad Joshi, managing director and accounting officer with S&P Global Ratings.

Corporate managers will have to weigh both the high court’s ruling and the administration’s quick rebuke as they consider the staying power of the tariffs and what that outlook could mean for their business.

“If the duration or persistence of the tariffs goes up, that’s where you get a higher likelihood of a write-down,” Neilson said.