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• CEOs publicly downplay tariff impacts while privately expressing significant concerns.
• Business leaders engage in delicate diplomacy with the White House to mitigate effects.
• Tariffs imposed by President Trump’s administration on Canada, Mexico, and China are causing market volatility.

Quick Brief

2-Minute Digest

Essential Context

Despite the calm public facade, CEOs are privately very discouraged about the impact of tariffs imposed by President Trump’s administration. These tariffs, which include a 25% tariff on goods from Canada and Mexico and a 10% tariff on goods from China, have significant implications for businesses across various sectors.

Core Players

• Donald Trump – President of the United States
• Doug McMillon – Walmart Inc CEO
• Jim Farley – Ford Motor Company CEO
• John Elkann – Stellantis chairman

Key Numbers

• 25% – Tariff rate on goods from Canada and Mexico
• 10% – Tariff rate on goods from China
• 53% – Percentage of small businesses expecting negative impacts from tariffs (WSJ/Vistage Small Business survey)
• 37% – Initial percentage of small businesses reporting expectations for negative impacts from potential tariffs (WSJ/Vistage Small Business CEO Confidence Index)

Full Depth

Complete Coverage

The Catalyst

The recent imposition of tariffs by President Trump’s administration has triggered widespread concern among business leaders. Despite public statements downplaying the impact, CEOs are privately worried about the potential economic fallout.

“Tariffs are something we’ve managed for many years, and we’ll just continue to manage that,” said Walmart Inc CEO Doug McMillon, reflecting the public stance of many CEOs.

Inside Forces

Internally, companies are scrambling to adjust to the new tariff landscape. This includes making educated guesses about future demand, creating price buffers to mitigate potential cost increases, and scrutinizing costs to avoid significant financial losses.

For instance, some CEOs are planning for the worst while hoping for the best in terms of inventory forecasting, assuming sales could be equal to or less than the previous year’s sales due to the tariffs.

Power Dynamics

The relationship between business leaders and the White House is complex. While publicly maintaining a calm demeanor, CEOs are engaging in delicate diplomacy to influence policy decisions that could mitigate the negative impacts of tariffs.

CEOs like Jim Farley of Ford Motor Company and John Elkann of Stellantis have voiced concerns about the operational challenges and costs associated with the tariffs, highlighting the need for strategic adjustments.

Outside Impact

The broader implications of these tariffs are significant. Retaliatory tariffs from Canada and China are already in place, and Mexico is expected to follow suit. This has led to concerns about a potential trade war and its impact on the global economy.

Consumers are likely to face price hikes on everyday goods, and small businesses are particularly vulnerable to the economic volatility caused by these tariffs.

Future Forces

Looking ahead, the situation is likely to remain volatile. The temporary pause on tariffs for Mexico and Canada until March 4, 2025, may provide some relief, but long-term solutions are needed to stabilize the trade environment.

Business leaders will continue to navigate these challenges by negotiating with customers, finding alternative suppliers, and closely monitoring market changes.

Data Points

• February 1, 2025: President Trump’s administration imposes tariffs on Canada, Mexico, and China.
• February 3, 2025: Temporary pause on tariffs for Mexico and Canada until March 4, 2025.
• 53%: Percentage of small businesses expecting negative impacts from tariffs (WSJ/Vistage Small Business survey).
• 37%: Initial percentage of small businesses reporting expectations for negative impacts from potential tariffs (WSJ/Vistage Small Business CEO Confidence Index).