Here’s why CEOs think Trump’s economic policies aren’t working
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- A poll of 100 CEOs reveals widespread private criticism of Trump’s tariff policies, with 76% saying consumers pay the costs.
According to Donald Trump, in economic terms you never had it so good.
“The economy is back on track,” the White House proclaimed last week, asserting that, among other metrics, “retail sales are booming” and inflation is falling.
These claims, however, seem to be more aspirational than real — at least that’s what the raw figures are showing. Except for the wealthy, increases in consumer spending are hitting a wall, “decelerating from the robust pace seen in late 2024,” in the words of Fitch Ratings.
The CEOs are pretty candid about not wanting to be marginalized.
— Yale management professor Jeffrey Sonnenfeld, on why CEOs aren’t speaking out against Trump’s economic policies
Consumer spending growth fell to 0.5% in the first quarter of this year and to 1.4% in the second quarter, a serious slowdown from the 3.7% and 4.0% growth rates in the third and fourth quarter of last year, before Trump took office, Fitch calculated.
As for job growth, it has been so dismal this year that Trump fired Bureau of Labor Statistics Commissioner Erica McEntarfer in August, as though she was the reason that the economy is crumbling under the weight of his economic policies.
Meanwhile, inflation is creeping up, almost entirely because of tariff-related price increases. Although the White House has asserted that inflation is coming down, in fact it is going up. The consumer price index has risen every month since Trump took office except in March. The CPI increased by 2.9% in the year ended Aug. 31, compared with an increase of 2.5% in the year ended August 2024, according to the BLS.
In response to my request for comment on these figures, a White House spokesman disputed assertions that Trump’s economic policies have been ineffective. “The Administration is working closely with business leaders to restore America as the most dynamic economy in the world” via “an aggressive pro-growth agenda of tax cuts, deregulation, and energy abundance,” said the spokesman, Kush S. Desai.
These signals of a weakening economy may still be only faintly perceived by most Americans — and felt most sharply by lower-income households — but they’re no secret to business leaders.
That’s evident from a poll given by Yale management professor Jeffrey Sonnenfeld to 100 chief executives attending his regular CEO caucus, held on Sept. 17.
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The poll results amount to a devastating report card for Trump’s economic program. How bad is it?
Some 76% of respondents agreed that U.S. consumers and importers are paying for Trump’s tariffs, not foreign companies or nations, as Trump claims.
About 71% said that the tariffs were harming their business, 62% said the tariffs weren’t prompting them to invest more domestically and 59% said they expected no results from domestic investment as a result of the tariffs. About 80% said that Trump’s pressuring Federal Reserve Chair Jerome H. Powell to cut interest rates was not in America’s best interest, and 71% said Trump had eroded the independence of the Fed.
These opinions haven’t percolated through to the general public because business leaders are loath to express them in public, rather than anonymously. But the industrialists aren’t helping their own cause through public silence, says Sonnenfeld.
“The CEOs are pretty candid about not wanting to be marginalized,” Sonnenfeld told me. “There are a couple of things in Trump’s toolkit that are really vexing for them to deal with.”
One is his “divide-and-conquer” approach: “Whether you’re the CEO of Walmart or Bank of America or Harley-Davidson or Coca-Cola — the biggest pillars of American capitalism — Trump goes after them individually and pounds on them and that has an impact on sales and shareholders get nervous.” (Trump has attacked or injected himself into the internal workings of each of those companies for resisting his policies or otherwise taking actions he dislikes.)
Also, the CEOs are “worried about Trump making extortion demands on them, as they’re all global multinationals — that he’s going to use some weird justification to demand tribute payments.”
Trump’s attempted firing of Fed Governor Lisa Cook is part of his attack on the central bank’s independence. Lawmakers need to resist this with all the weapons at their command.
Trump’s playing favorites among companies — clearing the way for Nvidia to sell its AI chips to China in return for its paying a portion of its China revenues to the U.S. government, for example, or the administration’s taking an equity stake in the chipmaker Intel — has those companies’ competitors concerned that “their main rival is the United States government.”
But even concerted criticism from the business community hasn’t emerged. Major business lobbies such as the U.S. Chamber of Commerce and the Business Roundtable, a council of Big Business CEOs, have registered relatively anodyne concerns about the tariffs.
There isn’t much evidence that directly confronting Trump on any policy has prompted him to change course. Some business leaders have chosen to curry favor with Trump, including Apple CEO Tim Cook, who in August presented Trump with a gold-and-glass trophy despite the damage Trump’s tariffs on Chinese goods could do to Apple’s bottom line.
What accounts for the discrepancies between Trump’s wishes and the facts on the ground? Evidence is mounting that they’re the consequence of policies based on ideology and implemented incompetently.
This all suggests that Trump’s aides and agents act on his whims without stopping to ponder the consequences of their policies or procedures beyond whether they’ll satisfy Trump, much less whether they’ll actually advance his purported goals. The result is often just the opposite of what he says he wants.
That’s true of the administration’s tariff policies. As economist Justin Wolfers of the University of Michigan observed in April, after Trump announced the first round of his “reciprocal” tariffs against most countries of the world, “This is a tariff policy we’ve been told will solve the fentanyl crisis, get rid of illegal immigration, rescue the budget deficit, solve bilateral trade deficits and cure toe fungus. All of these things can’t happen at once and in the way they’re pursuing them, actually we’re serving none of those goals.”
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Trump also promoted his tariffs as a tool to restore manufacturing as a driver of U.S. economic growth. There’s no evidence of that happening. Manufacturing employment fell to 12.72 million in August from 12.76 million in April and down from 12.8 million in August 2024, according to government data.
No one should be surprised at the decline, since the on-again-off-again tariff policies lacking anything resembling a serious analysis of their effects makes manufacturers leery of making the long-term commitments necessary to build or expand a plant.
Chaos and confusion are the watchwords for Trump’s economic policies. As recently as Friday, a “proclamation” Trump issued appeared to impose a $100,000 fee on holders of H-1B visas attempting to enter or reenter the U.S. starting Sunday.
The visas were created to allow American technology companies to import uniquely talented individuals from abroad. Visa holders can work in the U.S. for three years, with the goal of obtaining permanent residency and ultimately citizenship.
Law firms, universities, judges — they’re all bowing to Trump’s threats, even though they’re almost surely illegal and his term is finite.
The law limits annual issuance to 85,000 new visas; about 400,000 applications were approved last year, including renewals. They’re heavily sought by big tech companies such as Microsoft and Amazon, but the largest users are India-based labor brokers that provide technicians for American companies.
The ambiguities in the Trump order prompted businesses in the U.S. to issue emergency advisories to employees on H1-B visas not to leave the U.S. for the present, and those who were outside the country for any reason to come back by Sunday. Some were reported to have debarked from international flights just before they took off for the U.S.
Over the weekend, the administration clarified that the fee would be charged only for new applications, and only once, rather than annually.
Another recent episode underscores how the ineptitude of Trump’s administration is stifling the prospects for economic growth.
That was the Sept. 4 ICE raid on a Georgia battery factory being built for the South Korean companies Hyundai and LG, part of a $7.6-billion complex that Georgia officials have touted as a major job creation project, with some 2,600 new permanent jobs expected at the battery plant alone. The raid resulted in the detention of about 475 construction workers, including 300 South Koreans who had been brought to the U.S. to install and service plant equipment.
The circumstances suggest that no one at ICE or any other agency considered the ramifications of such a massive raid or the detention of 300 South Korean nationals before pressing the accelerator up to 60 or shooting video of the raid, including shots of Korean workers manacled and ushered bodily into a transport.
The Koreans have returned home without having been charged, but the raid has provoked nationwide shock and fury in South Korea, since it came only two weeks after South Korean President Lee Jae-Myung held a companionable meeting with Trump at the White House during which they pledged to forge closer economic ties between the two countries. Those pledges are now in doubt — as are plans by Korean companies and possibly other foreign economic partners for new U.S. investments. Construction of the plant, meanwhile, will be delayed for months, at least.
What could prompt business leaders or others to take a stronger stand on the damage Trump has been doing to the American economy and, indeed, its democratic principles?
“Something has to catalyze them,” Sonnenfeld says. “A spike in inflation in the fourth quarter will make a big difference, or the economy just stalling out would be a major concern.” American businesses big and small are seeing the damage — the big farm equipment maker John Deere says the tariffs will cost it $600 million this year, and small businesses have been telling tales of unsustainable fees and costs to local reporters.
But things may get worse before they get better. By the time most Americans fully recognize the extent of the damage, it may be too late to recover.
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Ideas expressed in the piece
Economic data contradicts the White House’s claims of a strong economy, with consumer spending growth decelerating sharply from 3.7% and 4.0% in the third and fourth quarters of 2024 to just 0.5% in the first quarter and 1.4% in the second quarter of 2025[1][2]. Manufacturing employment has declined from 12.8 million in August 2024 to 12.72 million in August 2025, undermining the administration’s goal of restoring manufacturing as an economic driver.
A survey of 100 CEOs reveals widespread skepticism about Trump’s tariff policies, with 76% agreeing that U.S. consumers and importers bear the cost of tariffs rather than foreign entities, and 71% reporting that tariffs are harming their businesses[5]. Additionally, 80% of these business leaders believe Trump’s pressure on Federal Reserve Chair Jerome Powell to cut interest rates is not in America’s best interest, while 71% say Trump has eroded Fed independence.
Inflation is rising primarily due to tariff-induced price increases, with the consumer price index increasing every month since Trump took office except March, reaching 2.9% in the year ended August 31 compared to 2.5% in August 2024. Furthermore, the administration’s chaotic policy implementation, exemplified by confusion over H-1B visa fees and the Georgia battery factory ICE raid that detained 300 South Korean workers, is undermining business confidence and international partnerships.
Business leaders remain publicly silent about their concerns due to Trump’s “divide-and-conquer” approach of targeting individual companies and fears of “extortion demands” from the administration. Meanwhile, the gap between Trump’s economic rhetoric and actual performance suggests policies driven by ideology rather than evidence-based analysis, with consequences often opposite to stated goals.
Different views on the topic
The Trump administration defends its tariff policies as necessary to address what it characterizes as a “national emergency” created by persistent trade deficits that have “hollowed out” the manufacturing base and rendered the defense-industrial base dependent on foreign adversaries[3]. The administration argues these tariffs respond to harmful foreign practices including currency manipulation and excessive value-added taxes imposed by other countries.
Economic projections show tariffs will generate substantial revenue, with estimates of $5.2 trillion over 10 years that can be used to reduce federal debt and encourage private investment[1]. Despite short-term disruptions, proponents argue this revenue generation provides fiscal benefits that support long-term economic stability and reduced government borrowing.
Consumer spending data indicates continued resilience, with spending increasing 5.5% in the first quarter of 2025 compared to the same period in 2024, suggesting consumers maintain healthy balance sheets and willingness to spend[2]. Morgan Stanley forecasts consumer spending growth of 3.7% for 2025, and while this represents a slowdown from 2024’s 5.7% growth, it still indicates positive economic momentum[2].
The administration emphasizes its “aggressive pro-growth agenda of tax cuts, deregulation, and energy abundance” as working closely with business leaders to restore America as the world’s most dynamic economy. Furthermore, consumer spending reached an all-time high of $16.35 trillion in the second quarter of 2025, demonstrating continued economic expansion despite policy uncertainties[4].
