American CEOs mum on Trump's universal tariffs
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Corporate America's reaction to President Trump's tariffs has been muted so far, with many relying on trade associations or special interest groups to speak on their behalf.
Why it matters: Corporate America has recently drawn a hard line in the sand regarding how and when they comment on public policy, social issues or cultural moments.
- The line is, "We only comment on policies that impact our business." For many companies — specifically those in automotive, retail and consumer goods — this moment would qualify.
- Plus, silence is a statement too.
Catch up quick: Trump ended the free-trade era on Wednesday by implementing 10% baseline tariffs on U.S. imports, plus steeper reciprocal levies on those from the European Union, China and Vietnam, among others.
- It's one of the "biggest, most abrupt economic gambles in presidential history," says Axios Macro co-authors Courtenay Brown and Neil Irwin.
Driving the news: Axios reached out to more than a dozen Fortune 500 companies whose stock plummeted following the tariff news, none of which had comment.
- The Business Roundtable — the lobbying group that represents America's top CEOs — put out a statement on Wednesday warning that the universal tariffs "run the risk of causing major harm to American manufacturers, workers, families and exporters" and that "damage to the U.S. economy will increase the longer the tariffs are in place."
- Meanwhile, the U.S. Chamber of Commerce called the tariffs "a tax increase that will raise prices for American consumers and hurt the economy."
Yes, but: Leaders from the automotive industry voiced concerns ahead of "Liberation Day," with Ford Motor Company CEO Jim Farley stating the tariffs will create "costs and chaos" and some are adjusting their production and manufacturing operations.
- Meanwhile, executives from Target, Best Buy, Mattel, Hasbro, Walmart and Costco preemptively warned consumers that price hikes are likely.
Between the lines: While "Liberation Day" didn't serve as a liberating moment for CEOs, some are voicing frustrations behind closed doors, according to corporate communicators who asked to speak on background.
- "It's already starting to feel like the tide is changing among CEOs. You can come for their workers' rights, but don't come for their money," said one communications leader from a major tech company.
The big picture: Business leaders will need to navigate the uncertainty and volatility brought forth by the Trump administration's policies and explain how these policies impact key audiences.
- Employees, in particular, are concerned about how these policies could affect their lives, employment or the business' broader operations.
What's next: First-quarter earnings season will get into swing next week, which will likely force many executives to address Trump's trade policies head-on.
What to watch: During the first administration, Trump's 2017 immigration ban opened the floodgates for corporate pushback, with Microsoft, Google, Apple, Facebook and other major tech companies arguing that the ban hindered business growth.
- The implementation of these trade policies could serve as a similar tipping point for his second term.
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