CEO confidence

The chief executives of America’s biggest companies are scaling back plans for hiring and spending due to concerns over the Trump administration’s trade policy, according to the most recent survey from the Business Roundtable.

“Uncertainties about trade policy are a growing weight on economic progress — especially amid escalating trade tensions,” Joshua Bolten, the CEO of the Roundtable and a former chief of staff to President George W. Bush, stated.

Sixty-three percent of CEOs polled said there was a “serious” risk that foreign trade retaliation would hurt American exports. Another 32% called the risk “moderate.”

The lobbying group said U.S. CEOs indicated they would scale back hiring plans for the next six months by 15% and cut business spending by 4%. Eighty-nine percent of CEOs worried President Donald Trump’s approach to trade would slow the economy; 90% said it would increase costs for U.S. businesses.

After talk of a truce last week, President Trump reversed course by announcing plans for $50 billion worth of tariffs on Chinese goods and hit Canada, Mexico and the European Union with tariffs on steel and aluminum.

The Roundtable’s CEO outlook index, a measure of CEO confidence, was 111.1, down from the record high of 118.6 for the first three months of 2018. It was the first time the index fell in two years.

JPMorgan Chase Chairman and CEO Jamie Dimon, who chairs the group, emphasized the sixth straight quarter of historically strong optimism.

“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.

The departing executive chairman of Starbucks, Howard Schultz, said, historically, trade conflicts have always resulted in economic downturns.

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