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The Trump administration backed down on their tariffs remarkably quickly. President Trump, Commerce Secretary Howard Lutnick, and Trade Advisor Peter Navarro went against their word, making concessions on previously “non-negotiable” trade measures. Oddly, no substantial trade advantage was gained from any nation during this brief period of imposed tariffs. However, a 90-day pause on reciprocal tariffs was announced, signaling a policy shift.
While the President may have been able to manage retaliatory tariffs from foreign partners and quell public opposition to certain actions, he couldn’t withstand the growing disapproval from CEOs regarding his tariff policies. The threat of aggressive trade tactics caused U.S. stocks to lose significant value in just two days. Further market instability seemed likely as corporate quarterly earnings were being released, accompanied by reduced growth projections. Moreover, Treasury yields and the dollar’s value deviated from typical trade patterns during similar crises, leading to speculation about the potential loss of their “safe haven” status, which could impact interest rate benefits on U.S. corporate debt.
In short, CEOs had reached their limit. JP Morgan CEO Jamie Dimon suggested a recession was “a likely outcome” due to tariffs exceeding expectations. Delta Airlines CEO Ed Bastian adjusted the company’s financial outlook for the year due to “broad economic uncertainty around global trade.” BlackRock CEO Larry Fink stated at the Economic Club of New York that many business leaders from his portfolio companies “say we are probably in a recession right now.” These are just a few examples of the recent dissenting opinions from various sectors, including finance, transportation, housing, autos, technology, and general manufacturing—led by industry giants like Tesla’s , General Motor’s , and Alcoa’s , along with trade association leaders such as Jay Timmons of the and Suzanne Clark of the .
Last month, at Yale’s CEO Caucus, 100 top CEOs indicated they would publicly oppose Trump if the stock market declined by approximately 20%. Business executives followed through as the markets neared that level. Collectively, they challenged the president’s threats and the resulting damage.
Despite the limited trade relief, CEOs remain uncertain and concerned about the administration’s ongoing delays and sudden policy changes. This uncertainty has hindered business investment and limited the potential benefits of deregulation. Many have voiced a decline in confidence regarding the president’s economic policies. Trump’s position is now precarious.
Corporate leaders attribute the blame not only to Trump but also to Navarro and Lutnick. Their credibility has suffered due to their reversal on the negotiability of tariffs. In a recent interview, Lutnick stated he didn’t believe “there’s any chance…President Trump’s going to back off his tariffs.” Simultaneously, Navarro publicly declared that “this is not a negotiation.” The trade advisor then in an op-ed with the Financial Times. Treasury Secretary Scott Bessent, however, conveyed the opposite message in an internal disagreement over the White House’s trade approach.
The market’s positive reaction to Trump’s Truth Social indicates that he might have alleviated some of the anxiety among traders, but not among CEOs. Business leaders might have prevented the U.S. economy from collapsing, but it remains .
The from White House Press Secretary Karoline Leavitt, Bessent, and Trump failed to provide business leaders with enough reassurance to resume capital investments or M&A activities. As more details about the pause emerged, initial enthusiasm waned. Some analysts even anticipate the new tariff policy being equally . The 10% base tariff remained in place. Tariffs on China were increased significantly from 104% as retribution, despite the European Union approving their own retaliatory tariffs hours earlier. The tariff policies on Canada and Mexico remained unchanged, as did existing tariffs on the auto, steel, aluminum, lumber, and other industries. Tariffs on the pharmaceutical and semiconductor sectors are still reportedly being considered.
The heightened uncertainty that caused small business confidence to , labor market conditions to , capital spending to , and GDP growth forecasts to still persists. Before any reciprocal tariff announcements, a significant majority of CEOs at our CEO Caucus in March expressed increasing concern about the U.S. economy heading towards a recession, with a majority believing the administration would be detrimental to the economy. Almost all leaders supported targeted tariffs, similar to most Americans, but not those that are broad or reciprocal. And as a large majority of CEOs reported apologizing for Trump’s behavior to their , some of those same longtime foreign trade partners are having conversations with China to expand commercial ties.
Perhaps Musk provided the best description of the current tariff policy on amid his public dispute with Navarro, calling Trump’s trade advisor “dumber than a sack of bricks.” While fitting, that comparison might be unfair to bricks.
The ambiguity surrounding trade policy continues to pose substantial challenges for business leaders, disrupting long-term planning, investment decisions, and global supply chain strategies. The recent decision to pause reciprocal tariffs could be considered a minor “win” for leaders, who hope the President has learned from this experience.
