[By Guancha Observer Network, Ruan Jiaqi]

"In recent years, the market has experienced real estate crashes, the bursting of internet bubbles, the COVID-19 pandemic, and the dual headwinds brought by the Russia-Ukraine war and uncontrolled inflation, but it has never experienced an economic downturn caused by U.S. presidential policies. Now the situation has changed."

The American Consumer News and Business Channel (CNBC) made such a remark due to a sharp comment from an American chief executive officer (CEO): "This is the Trump recession."

According to CNBC's report on Monday (the 7th), in the days following the announcement of the so-called "reciprocal tariffs" by this president last week, a sample survey conducted by this media outlet among 22 CEOs showed that corporate executives generally expressed concern about the possible consequences of the tariff policy.

The report stated that "they clearly know that if the current trade policy continues to develop in its current form, some inevitable results will occur: an impending economic recession, rising prices driven by tariffs, and subsequent waves of unemployment will follow." At the same time, American brands selling overseas have already begun to feel similar pressure from boycotts.

CEOs expressed various views and emotions, and their concerns covered multiple aspects, from industry-specific issues that would increase the cost of all products in strategic growth plans, to confusion about the calculation methods and logic of tariffs, to panic about the possible consequences faced by American brands globally, and sometimes even direct anger.

A CEO bluntly described Trump's tariff measures as "disappointingly foolish and illogical." He also said, "If businesses lack confidence in the government's actions, they will never be able to thrive."

Another CEO sharply criticized, "Trump imposed tariffs on components that can never be obtained or will never exist in the United States. He is surrounded by a group of incompetent yes-men who are either unable or unwilling to provide him with convincing advice."

CNBC's survey results. Video screenshot

Investors are concerned that Trump's tariff policies may lead to global supply chain price increases, weakening demand, and even potentially causing a global economic recession. Currently, Goldman Sachs has raised the possibility of a U.S. economic recession to 45%. JPMorgan predicts the probability to reach 60%.

CNBC's survey shows that 69% of CEOs expect an economic recession, with more than half believing it will happen this year, and three-quarters expecting this recession to be moderate or mild rather than severe. This aligns with the pessimistic expectations of CFOs in another recent survey by CNBC.

Regarding layoffs, 37% of CEOs explicitly stated that they indeed have layoff plans for this year. Another 14% of respondents said that while no final decision has been made, layoffs are under consideration.

It is not difficult to see from the survey results that policy uncertainty is the key factor driving investors to sell stocks. 46% of CEOs said tariffs are detrimental to their companies, but 36% believe it is too early to make a judgment. Among those taking a wait-and-see attitude, they are formulating response strategies for various scenarios involving suppliers and consumers.

Almost all surveyed CEOs assert that prices will rise, with increases ranging from 5% to 20%, and 82% predict a resurgence of inflation.

A CEO revealed, "We anticipate that our suppliers will have to bear part of the tariffs, and we will have to pass part of the tariffs onto our customers. We are doing our best to control factors like pricing and procurement decisions, but we cannot control the impact of tariffs on consumer sentiment, which we believe could be significant."

The CEO who coined the phrase "Trump recession" also pointed out that the loss of market value will end consumption expenditure driven by the wealth effect, especially for people in the key age group of 40 to 60.

Interviewed American business CEOs' evaluation of Trump's tariffs.

CEOs with sales operations in up to 100 markets are increasingly worried about how other countries will react to America's tariff policies. They indicated that these reactions are not only reflected in the policies of other governments but also include the attitudes of consumers they rely on for overseas sales.

"What I worry most about is the boycott of American brands and the breeding of anti-American sentiment," a CEO whose company's sales are nearly 50% from outside the United States expressed concern, "A real backlash is happening."

Another CEO also noted, "The possibility of boycotting American goods is indeed increasing, which will have a major impact on businesses. Companies will then have to lay off employees. The possibility of stagflation is also rising simultaneously."

The media outlet mentioned that American service industries led by software, social media, and cloud computing may also become targets of retaliation through counter-tariffs. A CEO explained, "People usually think tariffs apply only to physical goods, but today's world is more service-oriented than ever. Countries will strive to increase employment and tax revenue in their own service sectors while restricting the entry of services from other countries."

The Trump administration repeatedly claimed that with the rise of American manufacturing, the tide of industrial return will ultimately prove that concerns about the short-term impact of tariffs are wrong. However, almost no CEO agrees that the government's policy focus will prompt their companies to build new manufacturing domestically in the U.S.

Of the participating CEOs, 45% said that any industrial return would take at least two years, and more likely three years or longer.

CNBC reported that behind Trump's initiation of a new round of trade wars, there were other considerations, such as raising funds for the government to help pay for tax cuts, reducing the U.S. trade deficit, and addressing national debt issues. But these goals create a picture full of uncertainty, sometimes even contradictory, making CEOs hold a negative attitude toward the most fundamental issues.

For example, in the question of "Will tariffs be a long-term beneficial policy?" 45% of CEOs strongly opposed this view. 59% did not recognize tariffs as a successful approach.

In an interview with CNBC on Monday morning, James Bullard, former president of the St. Louis Federal Reserve Bank, also predicted an economic recession, stating, "The impact is immediate because it affects global investment expectations... I mean, when you don't know what the rules are, who would want to invest? Therefore, major projects worldwide will be postponed until the situation becomes clear."

The CEOs participating in the CNBC survey all agreed with this statement. One commented, "All uncertainties during the process of handling trade issues will damage our business and limit investment before everything settles down."

In the stock market crash on April 3rd and 4th, the market value of seven major technology stocks in the U.S. fell by $1.6 trillion, and the wealth of tech billionaires also plummeted significantly. According to Bloomberg's billionaire rankings on the 6th, Musk's net worth decreased by over $30 billion in the past two days. Jeff Bezos, the founder of Amazon, ranked second, and Mark Zuckerberg, the founder of Meta, ranked third on the global richest list, with their net worth falling by $23.5 billion and $27.3 billion respectively.

CNBC previously cited sources saying that a group of well-known figures from the technology and finance industries recently visited Mar-a-Lago to discuss "common sense" with Trump regarding his tax policies.

Kara Swisher, a veteran technology journalist in the U.S., disclosed relevant information, stating that the donations of millions of dollars at the inauguration ceremony are becoming billions and soon perhaps trillions of dollars in losses.

CNBC did not disclose the specific identities of the aforementioned individuals. However, the report stated that due to the tech industry's heavy reliance on manufacturing, computer chips, and IT services in countries like China and India, Trump's tariff policies are heavily impacting tech stocks.

This article is an exclusive piece by the Guancha Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7490848178472747539/

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