CEOs & Uncertainty

The Business Roundtable is a Washington, D.C.-based organization of CEOs. It claims that the companies the CEOs represent support 37 million jobs in the US, some one in four. Those firms also represent 24% of US GDP.

General Motors CEO Mary Barra is an at-large member, as are CEOs including Tim Cook of Apple and Jamie Dimon of JPMorganChase.

Clearly this is a pro-business outfit. It is in favor, for example, of the “One Big Beautiful Bill Act.” After the House passed the bill Business Roundtable President & COO Kristen Silverberg released a statement that says, in part, “Business Roundtable commends the House on taking a giant step forward to protect and boost the economic benefits that tax reform delivered for American businesses, workers and families. By maintaining a competitive corporate tax rate and enhancing essential domestic and international tax provisions, the House budget reconciliation bill will help fuel US investment, innovation and economic growth.”

But last week the organization released the results of its Q2 2025 CEO Economic Outlook Survey which seems somewhat at odds with the bullishness about the way things are going, even though the 2017 Tax Cuts and Jobs Act (TCJA), which creates “a competitive corporate tax rate” and enhances “essential domestic and international tax provisions,” is still in effect.

A problem, it seems, is the ambiguity that exists as a result of the Administration’s actions.

Or as Business Roundtable CEO Joshua Bolten said, “Extending and enhancing tax reform is critical, but it is not sufficient. American businesses also need the Administration rapidly to secure deals with our trading partners that open markets, remove harmful tariffs and provide certainty for investment.”

The auto industry is affected by various tariffs. There’s 25% on imported passenger vehicles. There’s 25% on imported parts — from engines to mirrors and lots in between. There’s 50% of steel and aluminum. While there are exemptions for USMCA-compliant vehicles and parts and things like “import adjustment offsets,” one thing that this is doing is creating a whole lot of jobs for analysts and accountants in procurement departments.

Bolten said he wants the administration to rapidly secure deals. Of the more than 190 countries that tariffs are being applied to, there has been one deal signed since “Liberation Day.” (The so-called “deal” with China is so vague that it may or may not exist.)

It is with the UK. It will allow the import of 100,000 light vehicles into the US with a 10% tariff, rather than the pre-deal 25% that had been announced.

The tariff on those vehicles in 2024?

2.5%.

But what are the cases with other countries? It seems now there will be arbitrary numbers determined and sent to those countries. But what will those numbers be? No one (publicly, at least) seems to know.

Again: uncertainty.

Then there is the budget-bill-in-becoming’s ramification on electric vehicle production and purchase. It seems that rather than continuing support in the form of tax credits for doing things like building EV batteries, those incentives will go away or otherwise be greatly diminished. And those who are going into a dealership and anticipating at $7,500 tax credit for buying an EV will have to act fast (in 180 days—though this may change, too) because that will be eliminated, it seems.

All of which means that OEMs are going to have a non-trivial amount of stranded capital on their hands.

(It should also be stressed that the country that has technological and sales leadership in electric vehicles is China. Somehow the Trump Administration’s apparent anti-EV approach will not make the US particularly competitive in this area. That is not a strategy for technological success.)

Which brings us back to the Business Roundtable CEO economic outlook as it relates to (1) capital spending, (2) employment and (3) sales for the next six months. This survey was taken between June 2 and June 13 so it is fresh.

The big number is 69.

Actually, that’s a little number.

It is the number for the overall index, predicated on those three areas.

To get to 69 it fell 15 points from 84 in the Q1 index.

The average is 83.

Higher is better.

As for the individual indices:

1. Capital investment decreased 15 points, to 65

2. Hiring plans fell 19 points to 35

3. Sales dropped 11 points to 107

Remember: this is quarter-compared-to-quarter, not Q2 2025 to Q2 2024.

Bolten: “Driving this quarter’s decline in the Index is broad-based uncertainty, arising substantially from an unpredictable trade policy environment.”

None of those declines is good.

If cap spending is down, this means that manufacturers won’t be buying the machines, equipment and systems they need to enhance their competitiveness. How good is that in the short- or long-run?

If the number of vehicles sold in the US declines by an estimated 850,000 this year and perhaps as many as a million in 2026, then there will need to be fewer people working in the auto industry — from factories to offices, at OEMs and suppliers. So who is going to be keen on hiring?

If people lose their jobs or if other necessities become more expensive (and according to the Yale Budget Lab: “Motor vehicle prices rise 13.6% in the short-run and 11.9% in the long-run, the equivalent of an additional $6,500 and $5,700 respectively to the price of an average 2024 new car”), then sales across the board are going to fall (not only will Mary Barra feel it, but so will Tim Cook, as will Jamie Dimon because if more of one’s income needs to be spent, there is less to save and invest).

This becomes an unvirtuous circle.

The CEOs evidently aren’t happy with how things are going.

Even if they get what they want in the form of taxes, there is still uncertainty — and even when it is resolved, there will be the issue of consumers being faced with higher prices.

As Milton Friedman put it in 1978:

“We call a tariff a protective measure. It does protect; it protects the consumer very well against one thing. It protects the consumer against low prices.”

Macaulay is pundit-at-large for The Hustings.