Politics
European Telecom Giant Considers Expanding U.S. Manufacturing In Response To Tariffs
Finnish telecom giant Nokia is considering an expansion in U.S.-based manufacturing operations in an effort to mitigate the impact of tariffs imposed by President Donald Trump, Justin Hotard, Nokia’s new CEO, announced Friday.
Nokia reported weaker than expected first-quarter 2025 results on Thursday. The Finnish telecommunications manufacturer predicts tariffs will have an approximately $22 million to $34 million impact on its second-quarter comparable operating profit.
Thursday’s announcement sent shares of the company plunging six percent on Thursday following poor first quarter earnings results.
Nokia reported a $68.2 million net loss in its first quarter, compared to $498 million a year earlier. The company’s comparable operating profited cratered 74 percent to $177 million, however, according to an analysis from the Wall Street Journal.
This represents a worrying sign when compared with industry forecasts, which expected the company to earn $341 million and a net profit of $143 million, according to an analysis from FactSet.
As for the weak first quarter numbers, the company pointed to a $136 million settlement as a driving factor. Hotard said the settlement was related to a customer project issue that has now been entirely settled.
Despite the setbacks, Nokia has not revised its 2025 outlook, as the company is projecting profits to land anywhere between $2.2 billion and $2.7 billion. Howard — who has been CEO for about three weeks — admitted that reaching the projected figures will be challenging, however.
Speaking in regards to potential tariff impacts, Hotard told Reuters that the company has not yet seen a significant drop in demand, though he did note that the company is exploring ways to increase it’s U.S.-based manufacturing output in order to mitigate any potential effects.
“It is not a discussion on (moving) our headquarters… that is less critical than it is in terms of investment in research and development (R&D) and manufacturing capability,” Hotard told Reuters.
In a separate statement to the Financial Times, Hotard indicated that he would “absolutely entertain” the idea of expanding U.S. manufacturing to create “additional resiliency” to tariffs. As of this report, Nokia currently operates five manufacturing facilities in the United States, The Times noted.
“If there are opportunities to strengthen [U.S. manufacturing], in that it will help us drive growth in the market, that’s one of the things I’ll look at,” Hotard told the outlet.
The discussions come as a number of European firms have either announced plans to expand U.S.-based manufacturing operations or are exploring the possibility of doing so. British auto manufacturing giant Rolls Royce recently told investors that they are in active plans to relocate a number of jobs to the U.S., while Swiss pharmaceutical firm Novartis announced $23 billion in new U.S. investments in a press release issued last week.
