- In today’s CEO Daily: Diane Brady talks to CEOs about Trump’s upending of U.S. trade policy.
- The big story: Trump’s global trade war is tanking markets worldwide.
- The markets: It's a bloodbath out there.
- Analyst notes from Claudia Sahm, JP Morgan, Goldman Sachs.
- Plus: All the news and watercooler chat from Fortune.
Good morning. I am thinking about the pain that is about to be imposed on our neighbors and ourselves because of the steep tariffs that will come into effect tomorrow. Trump signed executive orders this weekend, imposing a 10% tariff on China and a 25% tariff on all imports from Canada and Mexico, with levies of 10% on Canada’s energy resources.
Over the past month, I’ve been asking C-suite leaders what they think of the new Trump administration’s stance on key issues. There’s a largely positive reaction to regulation and taxes, differing views on immigration and geopolitics, and a uniformly negative stance on tariffs. China is a complicated case, given accusations of dumping, IP infringement and other issues. But I could not find a single leader who supports imposing high tariffs on Canada and Mexico. Not one.
It’s easy to understand why. Tariffs are taxes that will be paid by American consumers and businesses. They will disrupt finely calibrated supply chains honed through two generations of free trade. The auto pact goes back even further; about 40% of the GM’s North American production is outside the U.S. Every country will see lower GDP and higher inflation as a result. They’re cruel and destructive to our largest trading partners. They also punish people who have nothing to do with the flow of immigrants and drugs across the border. The only drug trade I associate with Canada is the flow of Americans heading north to buy cheap prescription drugs.
Jay Timmons, CEO of the National Association of Manufacturers, points out that one-third of critical U.S. manufacturing inputs now come from Canada or Mexico, “rather than from competitors that often engage in unfair trade practices.” Even UAW President Shawn Fain said the auto union does “not support using factory workers as pawns in a fight over immigration or drug policy.” And partners are already retaliating as Ontario and other provinces have started pulling U.S. alcohol from store shelves. Expect more moves to follow.
Nobody wins in this trade war. But, as one Canadian CEO told me last week, “short of moving production south of the border, there’s nothing we can do about it.”
More news below.
Contact CEO Daily via Diane Brady, diane.brady@fortune.com, LinkedIn.
