Nearly seven in 10 CEOs worried tariff policy changes will negatively impact them
Concerns over tariffs have dragged down the economic confidence of chief executive officers in the first quarter of 2025, according to a new report from Vistage.
Its CEO Confidence Index revealed a historic 22-point drop from the previous quarter, from 100.8 to 78.5.
Joe Galvin, chief research officer at Vistage, said their findings show a "stark juxtaposition" to the gains observed in the fourth quarter of 2024.
"The high confidence in the previous quarter was likely driven by optimism about what the new administration might accomplish, while the current reading reflects the reality of ongoing economic challenges," Galvin said in a statement.
"This uncertainty, along with tariffs and growing concerns among consumers, is leading to a more cautious outlook for the U.S. economy."
According to the report, 69% of CEOs are concerned that trade and tariff policy changes will negatively impact their business.
"The reality of the policies being suggested and implemented is seen as inflationary and disruptive to business planning," Galvin said in an insight.
"The transition to the new administration is no longer fostering optimism about the economy or the trajectory of business. Instead, it has given way to a more polarised belief in economic instability and chaotic decision-making, as opposed to a business-friendly environment."
US President Donald Trump has announced tariffs on goods imported from the rest of the world, starting from a minimum of 10%, with some countries receiving as high as 50%.
Source: US White House
Trump previously claimed that tariffs will boost the economy, as it will encourage US consumers to buy more locally made goods and increase the amount of tax raised.
The outcomes stemming from Trump's tariffs have been widespread, with some nations imposing their own tariffs in retaliation. As a result, JPMorgan recently raised its forecast for global recession from 40% to 60%.
In workplaces, some organisations overseas have announced layoffs to cut costs, while others are considering expansions in the US.
Vistage's report revealed that 42% of CEOs now expect the overall economic conditions in the US to get worse, much higher than the 13% who expected it in the last quarter of 2024.
The share of CEOs expecting their organisations' headcount to go up also declined, according to the report.
It found that only 45% of CEOs expect their firm's total number of employees to increase, down from 65% in the previous quarter.
On the other hand, the number of CEOs expecting their headcount to decline reached 14%, a significant increase from the five per cent last year.
"Since the survey began in 2003, the only other times this figure rose as high were during the pandemic in 2020 and the 2009 recession, an indication that today's uncertainty is a major event for small and midsize businesses," Galvin said.
According to Galvin, a variety of outcomes are in the horizon for businesses this year in the wake of widespread unpredictability.
He said some businesses will continue to thrive after seeing record backlogs and surging revenues, while others will likely be impacted by the tariffs and resulting trade wars.
"For those in a position to take on top talent, this is a great time to secure the people you will need to scale as growth is forecasted to pick up moderately at the end of the year into 2026," Galvin said.
