Trade Pressures and Policy Shifts: Insights from Business Leaders Across Sectors

It has been an eventful week in the world of tariffs and trade. From President Trump’s discussion of providing tariff revenue to farmers, the formalization of the US-EU tariff agreement to new tariffs placed on pharmaceuticals, trucks, and cabinets, this week has seen meaningful developments in the administration’s trade policy.

This week, we’ve compiled recent pieces that highlight the perspectives of industry leaders and their outlook on today’s rapidly changing economic landscape.

From Fortune: Behind Closed doors, our top CEOs say Trump is bad for business. Make America into America Again

At a recent gathering of Fortune’s top CEOs, the majority of which identifies as Republicans, industry leaders expressed increased uncertainty over who truly benefits from the current policy environment.

Attendees estimated that 80% of the tariffs have been shared equally between domestic firms and U.S. consumers, with the remainder shouldered by foreign counterparts.

One CEO of a major U.S. manufacturing company explained: “If the U.S. government wants to help protect certain industries, they need to help those industries be successful. It is not just putting a bunch of tariffs in place and assuming those industries are going to get moved to the U.S. There have to be incentives … Consumers want products to be low-cost … Does it really make sense to be manufacturing all that in the United States? I do not believe it does.”

Another attendee with a significant manufacturing footprint in the U.S. told the group that while they want a level playing field and support the president’s goals in that regard, their company can only offset some of the tariff-related cost increases through operating efficiencies and tax benefits…” They added that for now, the cost of tariffs still far exceeds the benefits provided by the Trump administration, drawing murmurs of agreement from the room.

Another leading CEO in the manufacturing sector, whose products are primarily made in America, explained just how debilitating this kind of uncertainty is for their company: “Manufacturing has always been a big advantage for America. So, I think bringing back manufacturing is important. The administration has it right … [We need a level] playing field in the United States … But I am always worried about what the government is going to do next… where manufacturers import from is Mexico, Canada, and China. None of those [trade deals] is settled. So, if you want to make a change in your business, you recognize tariffs are going to change in 90 days or 120 days…”

From The Dallas Federal Reserve: Energy Quarterly Survey

The quarterly survey of oil and gas companied released by the Federal Reserve Bank of Dallas earlier this week was fraught with complaints about instability and uncertainty.

“The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, [input] prices are up, and drilling is going to disappear. The oil industry is once again going to lose valuable employees.”

“The U.S. shale business is broken. What was once the world’s most dynamic energy engine has been gutted by political hostility and economic ignorance. The previous administration vilified the industry, buried it in regulation and cheered the flight of capital under the environmental, social and governance banner... Now the current administration is finishing the job. Guided by a U.S. Department of Energy that tells them what they want to hear instead of hard facts, they operate with little understanding of shale economics. Instead of supporting domestic production, they’ve effectively aligned with OPEC—using supply tactics to push prices below economic thresholds, kneecapping U.S. producers in the process.””

Read more commentary at Politico: Oil and Gas Sours on Their Cheerleader-in-Chief

From Agri Pulse: Trump Says Some Tariff Revenue Will go to Farmers, but There Are Some Legal Questions

President Donald Trump announced on Thursday that he would use Section 32 to direct tariff revenue to farmers who have seen their markets dry up this past year. However, some officials are already raising alarms at the legality of this plan.

Only $350 million can be spent on restoring farmers’ purchasing power through direct payments, Bart Fischer, co-director of the agricultural and food policy center at Texas A&M University, said during the Ag Outlook Forum. The bulk of the revenues has to be used to fund child nutrition programs administered by USDA’s Food and Nutrition Service.

Harrison Pittman, director of the National Agricultural Law Center, said on Thursday that it remains an "open question" as to whether the president would be able use Section 32 to channel tariff revenues to farmers. 

Ultimately, the paths for providing tariff assistance to farmers lead back to Congress, the former official argued.

“Taking the handcuffs off and tying this back to tariff revenue through Section 32 would be the cleanest, most appropriate way to do it,” the former USDA official said, adding that pushing the message that tariffs are funding the assistance is “a nice talking point.”

A potential wildcard remains the Supreme Court’s ruling on the legality of Trump’s tariffs. Both the Court of International Trade and the Federal Circuit Court of Appeals have said Trump overstepped his legal authorities in using emergency powers to impose tariffs. The Court is set to hear oral arguments on November 5th.