The third straight drop in the sales outlook for America’s largest corporations shows that beauty, at least when it comes to U.S. tariffs, really is in the eyes of the beholder.
CEOs surveyed through June found the duties considerably less attractive than President Trump, who has praised the levies on both Twitter and CNBC as a valuable tool for wresting concessions from U.S. trade partners.
Only 65% of the leaders who participated in a Business Roundtable survey published Wednesday expect sales to grow in the next six months, down from 73% in the first quarter and 80% at the end of last year.
“The uncertainty over trade policy is making it more difficult for companies to invest and operate confidently,” Josh Bolten, CEO of the Washington-based organization that represents the largest 200 U.S. companies, said in a statement.
The survey, which includes responses from 127 executives, was conducted from May 16 to June 3, as Trump more than doubled tariffs on $200 billion of Chinese imports and threatened to impose them on all Mexican goods unless President Andrés Manuel López Obrador agreed to help curb illegal immigration into the U.S.
The Roundtable’s CEO Economic Outlook Index dipped 5.7 points to 89.5, a sharp drop from its record high of 118.6 in the first three months of 2018. Index readings range from -50 to 150, with any reading below 50 indicating the economy is contracting.
“CEO plans for hiring and capital investment remain healthy, but uncertainty about U.S. trade policy, softening global growth conditions and inaction on other pressing public policy issues are a concern,” said Jamie Dimon, chairman of the Business Roundtable and CEO of JPMorgan Chase, the largest U.S. lender.
“It is crucial for Congress and the administration to work together to enact policies that will encourage inclusive growth, innovation and opportunity in the United States,” he said.
While economists, executives, and even some lawmakers have warned the Trump administration that its escalating trade war — which also includes duties on steel and aluminum and may widen to vehicles — risks undermining gains from a GOP-led tax cut in late 2017, the president remains unconvinced.
While he suspended the threat of duties on Mexican imports when the country agreed to send troops to its southern border and house asylum seekers while their cases are evaluated in the United States, Trump says that deal shows the value of tariffs as a negotiation tool.
“When you are the piggy bank nation that foreign countries have been robbing and deceiving for years, the word ‘tariff’ is a beautiful word,” Trump said on Twitter.
When you are the “Piggy Bank” Nation that foreign countries have been robbing and deceiving for years, the word TARIFF is a beautiful word indeed! Others must treat the United States fairly and with respect – We are no longer the “fools” of the past!
— Donald J. Trump (@realDonaldTrump) June 1, 2019
He was similarly upbeat during a Monday interview on CNBC, maintaining China, too, would eventually capitulate to U.S. demands, which in its case include greater access to markets and halting forced transfer of intellectual property.
“The China deal is going to work out. You know why? Because of tariffs,” Trump said. “In my opinion, based on a lot of facts and a lot of knowledge, China’s going to make a deal because they’re going to have to make a deal.”
