What C.E.O.s Really Think About Trump’s Tariffs

Key takeaways

The imposition of tariffs marks a significant shift in U.S. trade policy, affecting relations with over 90 countries.
Business leaders initially panicked over tariffs but are now shifting to strategize around them as the new normal.
CEOs fear the political repercussions of raising prices amidst tariffs, which complicates their pricing strategies.
Investment in technology and AI creates resilience in parts of the economy despite external pressures from tariffs.
The permanence and implications of tariffs may reshape long-standing economic relations and strategies for corporations.

Summary

Understanding Trump's Tariffs

In this episode of The Daily, Andrew Ross Sorkin discusses the implications of President Trump's newly enacted tariffs on various countries including the EU, Japan, and China. CEOs have shifted from panic to acceptance regarding the tariffs, recognizing them as a new normal. The current rates range significantly, with tariffs on Chinese goods potentially hitting 125% in the future. The conversation highlights the concerns and reactions of business leaders to these tariffs, and how they impact their operational strategies.

The Corporate Response and Strategy Adaptations

CEOs have been taking two main approaches: advocating for policy changes directly to lawmakers and rethinking their supply chains. Sorkin notes that many executives initially turned to absorbing the costs instead of passing them onto consumers, fearing repercussions from the president. However, he suggests that upcoming price increases may be inevitable due to rising operational costs.

Economic Climate and Market Reactions

The discussion pivots to the surprising resilience of stock markets amidst tariff announcements. Factors contributing to this include significant investments in artificial intelligence and data centers, which inject money into the economy. Sorkin explains that this creates a mixed economic picture, where companies are compelled to adapt, yet they are also experiencing strong economic cycles in other areas.

Long-term Economic Implications

Sorkin concludes that the tariffs represent a significant shift in U.S. economic policy with a historical parallel to the 30s and 40s. With hundreds of billions of dollars being generated in tariff revenue, Sorkin posits that these economic changes could be long-lasting, suggesting a new framework for international trade and economic relations.

Show notes

Last week, President Trump hit many countries with yet another round of punishing tariffs. So far, the economy has been resilient in the face of his trade war, but it’s unclear how long that will last.

Andrew Ross Sorkin, editor-at-large of DealBook, discusses what C.E.O.s are telling him about the president’s tariffs, and where they think all of this is headed.

Guest: Andrew Ross Sorkin, a columnist and the founder and editor-at-large of DealBook for The New York Times.

Background reading:

Staggering U.S. tariffs began last week as Mr. Trump widened his trade war.
From DealBook: Mr. Trump’s higher tariffs are here. Now what?

For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

Photo: Jim Watson/Agence France-Presse — Getty Images