Posted on 03/26/2025 6:39:41 AM PDT by delta7
American businesses are losing confidence in the US economy under Trump due to the tariff wars. CNBC’s CFO Council quarterly survey for Q1 2025 learned that America’s top CFOs are increasingly pessimistic about the economy due to these “disruptive” and “aggressive” tariff policies.
Around 60% of respondents believe the US will fall into a recession by the second half of this year, with 15% believing the recession will come in 2026. When this survey was conducted last quarter, prior to the tariff wars and trade volatility, only 7% of CFOs believed the nation was heading into a recession. This figure is a glimpse at how heavily trade uncertainty is destroying confidence.
How do corporations plan ahead when trade restrictions are subject to change at a moment’s notice? It’s simply not possible, and what happens is corporations will err on the side of caution and prematurely raise prices regardless of whether the tariffs go into effect. Unsurprisingly, nearly all (95%) of respondents said ever-changing trade policies are impacting their ability to make business decisions. Will tariffs be implemented? When? At what rate? The uncertainty is causing complete chaos in boardrooms across America.
Another 30% cited inflation as the biggest business risk but that is currently directly tied to this tariff ordeal, as is the valid concern of consumer demand (20%) as the people are also losing confidence in the economy and therefore are less likely to spend. Everything is connected. Inflation rises and demand drops as the people are unwilling and/or unable to spend.
Then 90% believe tariffs will create “resurgent inflation,” and half do not believe the Fed will be able to meet the 2% inflation target until the second half of 2026, if not 2027. I explained in an earlier blog post how the Fed cannot control tariff inflation through rates as rates do not offset higher prices set by trade barriers.
I have repeatedly warned that this tariff fiasco could be the nail in the coffin for Trump’s legacy. Those advising Trump are idiots who do not understand how the world economy functions. America will not be “liberated” on April 2 when many of these tariffs are set to go into effect. America cannot have a boom when the rest of the world is contracting. The world economy and peace survive on free trade.
I do know what ever President Trump tries, he will keep our citizen’s welfare first….like this:
“ UAE to Invest $1.4 Trillion in Key US Sectors”.
https://www.armstrongeconomics.com/world-news/world-trade/uae-to-invest-1-4-trillion-in-key-us-sectors/
A breakdown of the CFO’s party membership would be helpful.
Also, how many of these companies are will pay tariffs, because their products are made overseas?
Looking out for themselves and not the USA.
“How do corporations plan ahead when trade restrictions are subject to change at a moment’s notice?”
Plan on making stuff in the USA so Americans can plan to get married and take out mortgages.
I call BS. They just want/prefer the gravy train they have had for decades. It is a slow death for America and Americans that they can reliably get fantastically wealthy from.
All this fear of a recession is also stupid. Recessions happen. Business is cyclical. Never having a recession is not realistic. The numbers are all cooked. We have changed the metrics to support the BS that we haven’t been in a recession under Biden disastrous policies. We should be willing to take a recession in order to get to a better place. Let’s give Trumps ideas a real shot instead of freaking out before anything has a chance.
Original Nationality would be a nice list to have too.
They ain’t got none, don’t want none. Did these “experts” in the business world consider that when your money costs more to make than what it represents that the economy is on the clock? You can’t keep throwing money elsewhere and expect it to be used here. And as long as we give more than we get, we are going to run out in time? Or is that just “common sense?” Sorry, my bad.
wy69
Martin Armstrong says the world needs free trade, but we currently don’t have free trade. Other countries tariff our stuff bigly. Trump is leveling the playing field.
Meanwhile, he is bringing in billions of dollars in investment. Hyundai just announced $21B in new car manufacturing, including a steel plant.
No doubt we’ll have some issues, but this gloom and doom is balderdash.
The motor vehicle industry should be based on tariff-free internationally balanced barter, say American-made engines and batteries for more basic Mexican-made auto parts such as wiring harnesses.
However, tariffs are a necessary part of getting there.
Get over it, fools.
Very.
Well said.
High Tech has been in trouble for a couple years.
I suspect the CFO are from the NYC banking and investment firms who have backed the RATS since 1991
If Americans had patience, I could see your point, however, if we have a recession before 2026, Americans will punish those in charge at midterms.
Let’s give Trumps ideas a real shot instead of freaking out before anything has a chance.
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Agreed. Tariffs are designed to reduce our debt burden, and fortunately are reversible.
His total” package “ is what counts, reduction of citizen’s tax burden, foreign money pouring into the US, elimination of government waste and corruption, immigration, etc. are all winning strategies that out way any negative effects that may come from Tariffs.
Time will tell, Go Trump!
Trump appears to be using the threat of tariffs not the tariffs themselves. “You do this, or I hit you with a tariff.” He seems to be getting results and most of the tariffs will never occur. Instead of chess, he’s playing poker.
Trump is right. The economic game board has been biased against American interests for a long, long time. To fight the cold war, this made sense. But continuing the same policies forever doubled down on hurting average Americans for no reason.
So our recent round of stagflation ended when?
And when Trump 1.0 enacted tariffs on China, the cries were similar: “A disaster for the economy!” “Will lead to a shooting war with China!”, etc.
Many of those CFOs are Dem supporters. I ignore them.
Exporting almost all our manufacturing jobs and letting invaders take an ever-increasing percentage of jobs that must physically be done in the USA isn’t going to work for the vast majority of American citizens.
I suspect the CFO are from the NYC banking and investment firms who have backed the RATS since 1991
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You obviously remember what Ross Perot said…..he was right, our CEO’s led us down the path decades ago.
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