Zogby Analytics conducted a nationwide survey in the U.S. of 501 Chief Financial Officers (CFOs) and senior financial officials 4/13/18 - 4/22/18 with a margin of error of +/- 4.4 percentage points. In addition to the U.S. sample, Zogby also surveyed 207 CFOs in Europe (U.K., Germany, Spain, France and Italy) 4/14/18 -4/21/18 with a margin of error of +/-6.8 percentage points.
The CFOs surveyed were from medium to large size companies with annual revenues of $51 million or greater, and consisted of 100 employees or more. We posed the question to the senior financial executives, "Do you believe the Trump administration's decision to levy tariffs on certain Chinese made products such as steel, aluminum, washing machines, and solar panels will be helpful or harmful to the global economy in the long run?"
A majority (62%) of CFOs in America said the tariffs targeting specific products such as steel, aluminum, washing machines and solar panels would be harmful (very and somewhat harmful combined) to the world economy in the long run. On the contrary, a third of CFOs thought this would be helpful to the global economy (very and somewhat helpful combined), and 5% were not sure.
When it came to the region of financial executives, sentiment that the "Trump tariffs" would be harmful was strongest in the central great lakes (65% harmful/30% helpful) and west (66% harmful/32% helpful) regions. The east (58% harmful/38%helpful) and south (57% harmful/35% helpful) regions were more likely to think tariffs would help the economy in the long run. As far as industry was concerned, CFOs in the manufacturing space felt the tariffs would be more helpful (52% harmful/44% helpful), while CFOs in the banking/finance sector (63% helpful/33% harmful) were more likely to think the tariffs would be harmful.
A similar viewpoint was expressed by European CFOs; 61% (very and somewhat harmful combined) said the tariffs on Chinese products would be harmful to global economy in the long term, while slightly more than a third said they would be helpful (very and somewhat helpful combined).
As President Trump hosts French President Emmanuel Macron today for a state dinner, you can bet the "Trump Tariffs" will come up in their conversations. European leaders have expressed their dislike of the tariffs, which could start a trade war with China. President Macron will seek "full and permanent" exemptions from the new tariffs. U.S. leaders and other world leaders have argued the tariffs will hurt consumers and businesses with increased prices, and could lead to other retaliatory measures from China. President Trump will most likely not be swayed and brush off criticism as he is convinced the U.S. must erase its trade deficit with China, and stand up to some of their mischievous practices. One thing is certain, Trump is alone on this one as many U.S. and European financial executives do not favor what they call "nationalistic" trade policies, and are warning of their destabilizing impact on the global economy.