American business is torn over how to respond to President Trump's broad new tariffs, with many executives unwilling to speak out because they fear political backlash and continuing uncertainty about the administration's broader trade strategy, the Financial Times reported.
Muted dissent under threat of backlash
Corporate executives say they're hesitant to speak out against the tariffs, fearing to attract unwanted White House attention, particularly after it recently went after law firms such as Paul Weiss. "You don't want to be the barking dog," said one board chair, referring to an atmosphere of fear in which even behind-the-scenes lobbying needs to be handled with care. Instead, executives are making subtle appeals to administration insiders, like US Treasury Secretary Scott Bessent, hoping to shape policy without confrontation.
Disney, energy companies warn of increased costs
Disney CEO Bob Iger cautioned that the tariffs would have a disproportionate effect on companies with sophisticated global supply chains. Citing Apple's dependence on Chinese manufacturing as an example, Iger said that it's not simple to move production to the US, citing specialised labour needs. He also stated increasing steel prices would raise Disney's costs for building cruise ships. At the same time, oil prices tumbled with market nervousness, with shale billionaire Harold Hamm admitting that it would be difficult to realize energy independence if drilling costs are higher than supply prices.
Private equity, retail industries rush for clarification
Private equity bosses, including Carlyle Group, are holding investor calls to clarify general confusion. A Monday Carlyle call will present a "playbook" to assist clients in navigating the new trade landscape. Some early internal company models have already been discarded, as Trump's formula for tariffs surprised many. "The formula came nowhere near people's expectations," one private equity executive stated.
Retailers consider passing along costs and suppliers
During Home Depot CFO Richard McPhail's address at JP Morgan's retail industry conference, companies were engaging in tough negotiations with suppliers about whether to bear the cost of tariffs or pass them on to consumers. Guess has recommended transferring sources from Asia to Latin America, where US tariffs are lighter. But most firms are reluctant to shake up supply chains, having no idea how long the present trade strategy will hold.
Uncertainty prevents bold action
Experts such as Kristin Bohl of PwC warn that the vast majority of businesses are waiting in the wings from dramatic change. "This is not even the end of the beginning," she added, citing the still-ongoing process of Trump's protectionist program. The riskiness of the unknown trade policy and its potential duration has immobilized decision-making among many CEOs afraid of committing to expensive manoeuvres that will be deemed unnecessary down the road.
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