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Tags: CFO Survey | Trump | Trade War | Taxes | CNBC

CNBC's CFO Survey: Trump on Edge of Igniting Trade War

(Dollar Photo Club)

By    |   Wednesday, 15 March 2017 01:24 PM EDT

American business leaders fear that the United States is headed into a global trade war as they become skeptical that President Donald Trump's campaign promises and Republican legislative priorities are likely to come to fruition in the near future. 

A majority of U.S. CFOs are less than 50 percent confident that Congress will pass legislation on reforming Obamacare and personal income taxes by the end of this year, according to the latest CNBC Global CFO Council Survey. On corporate taxes, the most important issue facing most CFOs, the average U.S. council member is only 56 percent confident Congress will pass reforms.

"Skepticism goes even further than campaign promises and action in Congress. Forty-five percent of all respondents believe that Trump's meetings with CEOs and business leaders are political theater and will not lead to policy changes that diverge from the administration's ultimate agenda," CNBC reported.

"As business leaders are nearly split over the effectiveness of Washington's new leadership, they are in unison when it comes to fears over trade and immigration. Nearly all CFOs surveyed are concerned that the Trump administration's policies could trigger a trade war between the United States and China. The Council echoes the growing concern of business experts over the president's persistent tough language regarding trade deficits," CNBC reported.

Trump threatened to upend decades of multilateralism and raised fears of a trade war with China while on the campaign trail. In Asia and Latin America, leaders also have absorbed the deepening possibility that Trump will deliver on threats to impose punitive tariffs on Mexican and Chinese imports, provoking a trade war that will damage economic growth and eliminate jobs around the world.

"The looming changes to U.S. trade policy is weighing so heavily on the minds of CFOs that the group considers it the second-largest external risk factor to their firms. Consumer demand still remains the most commonly cited risk factor," CNBC reported.

China and the United States are currently discussing arrangements for a summit between President Donald Trump and his counterpart Xi Jinping that could help ease tensions stoked by Trump's fiery election-campaign rhetoric.

For his part, Chinese Premier Li Keqiang warned the United States against starting a trade war while expressing optimism that the world's two largest economies could keep relations steady despite frictions in the Trump era, AFP reported.

"We don’t want to see any trade war breaking out between the two countries. That wouldn’t make our trade fairer,” Li told reporters at a press conference closing China's annual parliamentary session.

"No matter what bumps the China-US relationship may run into, we hope this relationship will continue to move forward in a positive direction."

After his election victory, Trump angered Beijing with a protocol-busting telephone conversation with the president of self-ruled Taiwan, which China claims as its own.

Trump and Xi subsequently smoothed over the dispute last month in a phone call in which the US leader reiterated Washington's adherence to the "one China" policy that nominally endorses Beijing's claim to Taiwan.

Meanwhile, Europeans also have taken note of Trump’s denigration of the European Union and his apparent esteem for the Russian president, Vladimir Putin.

Some allies are shifting focus to other potential partners for new sources of trade and investment, relationships that could influence political, diplomatic and military ties. Many are looking to China, which has adroitly capitalized on a leadership vacuum in world affairs by offering itself — ironies notwithstanding — as a champion for global engagement.

“We’ve always said that America is our best friend,” Jeroen Dijsselbloem, president of the Eurogroup — comprising finance ministers from countries sharing the euro currency — said in a reccent interview with The New York Times.

“If that’s no longer the case, if that’s what we need to understand from Donald Trump, then of course Europe will look for new friends,” he said.

“China is a very strong candidate for that,” he added. “The Chinese involvement in Europe in terms of investment is already very high and expanding. If you push away your friends, you mustn’t be surprised if the friends start looking for new friends.”

(Newsmax wires services the Associated Press, Bloomberg and Reuters contributed to this report).

© 2023 Newsmax Finance. All rights reserved.

American business leaders fear that the United States is headed into a global trade war as they become skeptical that President Donald Trump's campaign promises and Republican legislative priorities are likely to come to fruition in the near future.
CFO Survey, Trump, Trade War, Taxes, CNBC
Wednesday, 15 March 2017 01:24 PM
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