How American CEOs are reacting to Trump tariffs
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While addressing tariffs in his joint address to Congress on Tuesday, President Trump said, "There will be a little disturbance, but we are OK with that."
Why it matters: U.S. business leaders are not OK with it, and many are trying to get ahead of the instability, rising prices and corporate backlash the tariffs could cause.
Between the lines: Executives have shied away from public policy, geopolitical or social issues, with many drawing a hard line by stating they would only comment on matters that directly affect the business.
What they're saying: Trump's trade policies check the box, says Evergreen Strategy Group co-founder Dan Schwerin.
- "Tariffs are the first issue where we're starting to see a crack in the business community's support for Trump," he said. "And we may see a broader discussion going forward. I don't think it's going to be an immediate repeat of the first-term dynamics, but we may see more and more CEOs realize that they can and should push back."
Case in point: CEOs from across industries are warning of the operational challenges and costs that could cause a ripple effect on the economy.
- Leaders from the automotive industry were among the first to voice concerns. Ford Motor Company CEO Jim Farley said the tariffs will create "costs and chaos," Stellantis chairman John Elkann warned they could be detrimental to North American manufacturers, and General Motors said it is considering supply chain tweaks to help soften the blow.
- Executives from Target, Best Buy, Mattel, Hasbro, Walmart and Costco warned consumers that price hikes are likely.
- Small-business owners are also speaking out, per the U.S. Chamber of Commerce. "As we speak, we are printing out new price tags," said Franco Salerno, co-owner of Pennsylvania-based Darianna Bridal & Tuxedo.
Of note, there has been little noise from Trump's close allies in the tech space — like Amazon's Jeff Bezos and Meta's Mark Zuckerberg.
Catch up quick: The administration has doubled the tariffs on Chinese goods — now 20% — and implemented a 25% tariff on goods from Mexico and Canada, which went into effect this week.
- In response, Canada and China have imposed retaliatory tariffs, while Mexico is expected to announce its own response this weekend.
- The White House announced yesterday that North American auto industry imports would be exempt for a month.
- "The Trump 2.0 trade war is already on a much larger scale, affecting many more products, than was ever seen in Trump 1.0," Axios' Neil Irwin writes.
Yes, but: Roughly 4 in 10 Americans cannot correctly define what tariffs are, even when presented with four options, according to research from DKC.
- Meanwhile, consumers from both major political parties say they will blame businesses for price increases, per the report.
What to watch: In the weeks ahead, CEOs and businesses are likely to face heightened pressure from various stakeholders should prices rise, which could ultimately bring the pendulum back to center.
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