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- A survey of US CEOs found that many of those executives are worried about the effects of President Donald Trump’s trade policies.
- The CEOs believe Trump’s tariffs could slow US economic growth and lead to higher costs.
Major US CEOs are starting to worry about President Donald Trump’s tough trade talk.
The latest edition of the Business Roundtable CEO Economic Outlook survey, a quarterly poll of major US CEOs, showed slipping confidence. The Economic Outlook index slipped to 111.1 for the second quarter, down from a record high of 118.6 in the first quarter that was buoyed by the implementation of the GOP tax reform bill.
Joshua Bolten, president and CEO of Business Roundtable, said the drawdown was a result of Trump’s belligerent trade policy.
“We continue to see strong CEO plans in the second quarter of 2018, but uncertainties about trade policy are a growing weight on economic progress – especially amid escalating trade tensions,” Bolten said in a release.
Of the CEOs that responded to the trade-related questions in the survey, an overwhelming number said the tariffs represented a danger to the economy:
- 95% said “foreign trade retaliation leading to lower US exports” is a moderate or serious risk to the US economy.
- 91% said “higher costs of imports for U.S. consumers” is a risk.
- 90% said “higher input costs for U.S. businesses” was a risk.
- 89% said “”lower U.S. economic growth” was a risk.
One of those executives that was nervous about the trade risks was Jamie Dimon, CEO of JPMorgan Chase and chairman of Business Roundtable.
“To sustain this momentum, we need to ensure that we have competitive trade policies in place to provide the certainty necessary to deliver sustainable economic growth to create more opportunities for workers and families nationwide,” Dimon said in a statement.
The fears of the executives mirror those of economists and many trade experts. Tariffs generally push up the costs of goods, as domestic buyers are forced to either pay more for imported goods or switch to more expensive domestic goods.
Trump’s tariffs are particularly damaging because they focus on intermediary goods, or parts, used by US businesses to make finished products. This increases costs for businesses and forces cuts to other expenses, including labor costs. That means not only consumers are at risk from the tariffs, but the burden will likely hurt companies as well.
Most economists estimate that Trump’s tariffs will result in a modest drag on US economic growth, but the carnage could get worse in the event that the trade tensions turn into an all-out trade war.