US executives turn more pessimistic as Trump policies sink in

NEW YORK – Uncertainty around tariffs and inflation has hurt US business optimism since Mr Donald Trump’s return to the White House in January, marking a sharp reversal from a buoyant mood among executives after his win in the presidential election, a survey shows.

Less than half, or 47 per cent, of US business executives polled by the Association of International Certified Professional Accountants (Aicpa) said they are confident about the economic outlook for the year ahead, down from 67 per cent of respondents in a survey in December.

The findings coincide with recent data showing eroding consumer sentiment and rising inflation expectations. 

“There are a lot of warning signs right now for business executives, particularly around inflation, payroll costs and consumer confidence, with tariffs adding another layer of uncertainty,” said Mr Tom Hood, executive vice-president for business engagement and growth at Aicpa.

The findings highlight a significant decline in sentiment within the space of a few months, driven by concerns about the effects of Mr Trump’s tariffs and their potential impact on inflation.

The relentless aspect of the tariff agenda has overshadowed, for now, his other more business-friendly plans, including proposed tax cuts for companies and lighter regulation.

In the most recent earnings cycle, companies in the auto sector, retail and other industries reported bleak expectations for the year ahead.

Ford Motor warned of a steep profit decline in 2025 while Walmart, Macy’s and other consumer-facing businesses forecast slower growth. 

Aicpa conducted its latest survey from Feb 4 to 26, before Mr Trump

suspended on March 6 the 25 per cent tariffs he imposed this week

on most goods from Canada and Mexico.

The move is the latest twist in a fluctuating trade policy that has whipsawed financial markets and fanned worries over inflation and a growth slowdown.

The professional organisation polled 305 members working for US companies, including chief executives, chief financial officers and controllers.

Beyond this week’s developments, the US introduced other new levies against China in February. Fresh tariffs on steel and aluminium imports are set to take effect later in March.

Mr Trump also ordered a review of global trade relationships by April, threatening reciprocal tariffs against a raft of other countries. 

Aicpa asked respondents about their view of tariffs in general, with 59 per cent indicating that they would have a negative effect on their businesses. And 85 per cent of respondents said uncertainty surrounding the subject has already influenced business planning, indicating that companies might have opted to stand down and not pursue new investment opportunities.

Inflation remains the top concern for business executives, followed by employee and benefit costs, availability of skilled personnel and staff turnover, according to Aicpa.

Domestic political leadership, a concern absent from the top 10 in the final quarter of Mr Joe Biden’s presidency, re-emerged as the sixth-biggest worry.

Revenue and profit expectations softened compared with the fourth quarter of 2024, with respondents forecasting 3 per cent increases in revenue – down from 3.3 per cent before. Profits are seen growing 2 per cent, down from 2.2 per cent in the fourth quarter. BLOOMBERG