For President Trump, tariffs serve as a mechanism to protect American industries and ensure national security. In contrast, for Tracy Skupien, they represent a disaster that has thrown her company into turmoil.
Skupien is the director of operations at Tompkins Products, a small family-owned business in Detroit that processes imported cold drawn aluminum bar into transmission valves and various components for the U.S. auto industry.
The recent decision by Trump to implement a 25 percent tariff on all steel and aluminum imports will significantly raise the cost of Tompkins’ primary raw materials—unless she can quickly obtain everything from her single U.S. supplier, which is a challenging task under the current circumstances.
“There’s no feasible way for me to absorb such a drastic increase in my material costs,” she states. “That’s simply not realistic.”
More tariffs may be forthcoming. Trump introduced additional tariffs on China on February 4, and sweeping 25 percent tariffs on Canada and Mexico are also on the horizon. On Thursday, he unveiled plans for new, “fair and reciprocal” trade measures that could potentially raise tariffs on a wider array of countries.
Across the U.S., business leaders are cautioning that this escalating trade war could result in higher costs, disrupt supply chains, and negatively impact profits, ultimately leading to increased prices for American consumers.
Jim Farley, CEO of Ford, warned that the repercussions for the automotive sector would be disastrous. “In the long term, a 25 percent tariff on goods crossing the Mexico and Canadian borders would create an unprecedented hole in the U.S. industry,” he expressed during a conference on Tuesday.
Even one of Wall Street’s most prominent Republican supporters felt compelled to voice his concerns. Ken Griffin, billionaire founder of hedge fund Citadel, remarked at a conference on Tuesday that the “uncertainty and chaos” stemming from Trump’s trade actions towards the U.S.’s closest allies would ultimately become “an impediment to growth.”
Griffin added that Trump’s “bombastic rhetoric” had “etched into the minds of CEOs and policymakers: we can’t depend on America as our trading partner.”
Trump’s election victory last November sparked a surge of optimism in both Wall Street and Main Street, with the dollar soaring and stock markets reaching new heights as investors anticipated stronger economic growth, reduced regulations, and lower taxes.
However, there are signs that a significant portion of corporate America is becoming increasingly dissatisfied with Trump as apprehensions mount regarding the adverse economic consequences of his trade and immigration policies.
Executives are worried that Trump’s import tariffs will detrimentally affect their businesses, his immigration enforcement will exacerbate an already serious labor shortage, and his radical restructuring of government will severely disrupt federal operations.
“The initial excitement observed in January over a pro-business president is transitioning to concerns,” remarks Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management.
Some business leaders contend that the pessimism is exaggerated. David Solomon, CEO of Goldman Sachs, noted this week that market stakeholders remain “enthusiastic” about certain Trump policies, especially the potential for a “more growth-oriented agenda” that would “encourage investment.”
He stated at a banking conference on Tuesday that the administration’s regulatory rollbacks would “ignite… animal spirits.”
The oil sector, a major supporter of the Trump campaign, has also commended the president’s numerous executive orders aimed at unlocking new oil and gas resources while dismantling regulations from the Biden administration that the industry claims raised costs and limited operations.
“It’s reassuring to see an administration focused on utilizing and promoting American energy resources,” observed Mike Wirth, CEO of U.S. oil giant Chevron, during an earnings call late last month. “I believe this approach is more balanced.”
Nevertheless, while praising the new administration, Solomon also recognized that the “broad policy landscape” remains “uncertain,” particularly regarding Trump’s proposals related to immigration, taxes, trade, and energy. “With so much policy in flux, we can expect a degree of volatility,” he added.
In private discussions, several Wall Street executives express deeper concerns. One senior investment banker mentioned that the turmoil and unpredictability surrounding Trump’s actions—and those of Elon Musk, the billionaire Tesla CEO who has become one of his closest allies—have exceeded the expectations of many business leaders.
“In hindsight, we underestimated the nature of this administration,” the banker contended. “I believe they are undermining their stated goals of peace and prosperity.”
Indeed, the anticipated surge of animal spirits seems to be lacking. U.S. mergers and acquisitions faced their worst start to the year in a decade, with Trump’s confrontational trade rhetoric instilling a chilling effect in corporate boardrooms: overall deal numbers dropped nearly 30 percent in January to 873 transactions, the lowest count since 2015, based on data from LSEG.
Correspondingly, the National Federation of Independent Business’s Uncertainty Index rose 14 points to 100—the third highest value recorded. Additionally, consumer sentiment experienced a decline of approximately 5 percent, as reported by the University of Michigan monthly consumer sentiment index—its lowest level since July. The survey indicated a “12 percent drop in buying conditions for durable goods, partly due to perceptions that counteracting the adverse effects of tariff policy may be too late.”
Recent data showing inflation climbing to 3 percent in January has also fueled concerns among economists regarding the potential overheating of the world’s largest economy.
Though Trump took office less than a month ago, he cannot be held accountable for rising inflation. Nevertheless, concerns persist that his trade policies may inevitably increase prices and exacerbate tensions with allies and partners.
Initially, business leaders largely regarded his campaign rhetoric about tariffs as mere posturing; they believed that, at worst, it would serve as a tactic to achieve favorable trade deals. That notion has now proven to be overly optimistic.
“All the tariff-related actions are directed against our allies rather than our adversaries, which has left CEOs quite apprehensive,” comments Sonnenfeld. “Trump was elected on the basis of economic improvement, and now they are apprehensive about the state of the economy.”
The dilemma for business leaders revolves around whether to remain silent or risk alienating the White House by vocalizing their concerns.
Farley from Ford was among the few to openly express discontent, asserting that a proposed tariff regime, ostensibly aimed at bolstering American industry, would effectively benefit its competitors.
“In truth, it provides unrestricted advantages to South Korean, Japanese, and European companies,” he stated. “They are importing 1.5-2 million vehicles into the U.S. that would not be affected by these tariffs. Therefore… it would be one of the greatest boons for those businesses ever.”
Skupien from Tompkins Products resonates with Farley’s concerns. Her company faces competition from manufacturers in South Korea and Spain who can acquire aluminum without tariffs, produce the same items as Tompkins, and import them into the U.S. without barriers. “The same aluminum arrives in the U.S., but as finished products—therefore, they face no tariffs,” she explains. “That places us at a disadvantage.”
She does have a single U.S. aluminum supplier who could potentially increase supply, she mentions, but switching to them completely entails “long lead-times.” Meanwhile, her customers have been notably resistant to absorbing the costs associated with the import tariffs by allowing price increases on Tompkins’ products.
“They insist: the supply issues are your responsibility, not mine,” she asserts. While they may come around to accepting higher prices eventually, “it’s bound to be a fierce struggle.”
Concerns similar to Skupien’s are echoing throughout the industry. The Coalition of American Metal Manufacturers and Users, a trade association, cautioned on Tuesday that enforcing tariffs on steel and aluminum without a feasible exclusion process “places U.S. manufacturers in direct jeopardy.”
It’s not just tariffs clouding the horizon for American businesses. The automotive industry has also been unsettled by Trump’s policy reversals regarding electric vehicles, with warnings from the White House about terminating tax incentives and federal support for the expansion of charging infrastructure.
Desmond Wheatley, CEO of Beam Global, a San Diego-based company focused on EV charging, stated that the multitude of executive orders aimed at EVs and renewables has undermined investor confidence in the sector. “The biggest concern for investors is uncertainty,” he conveyed to the Financial Times last month.
The future of Joe Biden’s Inflation Reduction Act, which has successfully attracted over $400 billion in clean energy investments and secured hundreds of thousands of jobs, is also under threat as Republican lawmakers rush to create a budget that aligns with Trump’s shifting priorities.
Trump made these priorities evident in his inaugural week by halting all offshore wind approvals and reviewing existing wind leases, while pausing hundreds of billions in loans and grants for green energy initiatives.
Several of the most ambitious renewable energy projects in the U.S. now face uncertainty, including Dominion Energy’s Coastal Virginia Offshore Wind Project, the largest of its kind in the nation.
Robert Blue, Dominion’s CEO, cautioned during an earnings call that halting the project would drive energy prices higher. “Stopping it would be the most inflationary measure that could be enacted regarding energy in Virginia,” he warned.
The planned wind turbines that Dominion intends to construct would supply power to data centers and are deemed “crucial to maintaining U.S. leadership in AI and technology.” This project also contributes to creating American jobs, he emphasized.
Skupien laments a policy aimed at revitalizing U.S. industrial production—a laudable goal, in her view—that inadvertently harms domestic manufacturers like Tompkins.
“We’re caught in the middle between Ford, General Motors, and Toyota on one side and the U.S. government on the other,” she reflects. “All we’re trying to do is keep the lights on.”
Additional reporting by Amelia Pollard, Claire Bushey, Jamie Smyth, and Will Schmitt
Data visualization by Ray Douglas
