What a Second Donald Trump Presidency Means for CEOs

Nearly 80% of businesses see a second Donald Trump presidency as more dangerous than China invading Taiwan, or even a clash between Russia and NATO.

That’s according to Oxford Economics’ latest quarterly survey of businesses, which had 42% of businesses seeing Trump as a “significant” political risk and 34% as a “very significant” risk.

So, why are CEOs so spooked by the prospect of President Trump 2.0?

Additional tariffs

If elected, President Trump says he would impose a 10% tariff on all imports coming into America, and a 60% tariff on anything stamped “Made in China”. 

This would, he believes, give American manufacturing a boost and make the country less reliant on overseas imports.

However, there has been a chorus of disapproval from Nobel Prize-winning economists over Trump’s protectionism, which, they argue, would only spike inflation and hurt the poorest in US society.

"An across-the-board tariff policy would take us not to a prosperous future but to a reactionary past that stopped working in the 19th century, where it nearly bankrupted the government, aggravated class conflict, provoked instability and favoured the wealthy over everyone else," Steven R Weisman, vice-president with the Peterson Institute for International Economics, wrote in the New York Times.

And 16 Nobel Prize-winning economists, led by Joseph Stiglitz, wrote an open letter that Trump's plans would reignite inflation and cause lasting damage to the world economy if he wins in November.

“Many Americans are concerned about inflation, which has come down remarkably fast. There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets,” they wrote.

Scrapping income tax

Trump also believes that the amount raised in tariffs from swingeing foreign imports means he could abolish income tax.

However, the US government raised $2.2 trillion in income tax during the latest financial year, while annual imports are around $3.8 trillion. The implication is that you’d have to impose a 58% tax on imports to raise the missing £2.2 billion.

Another Nobel Prize-winning economist, Paul Krugman, poured cold water on this piece of President Trump’s plan to scrap federal income tax in another New York Times op-ed piece: 

“The net effect would be negative for 80% of the population, especially for the bottom 60%, while extremely positive for the top 1%," he wrote.

President Trump shrugged off such concerns, telling TIME magazine, “I don't believe it will have much of an effect because they're making so much money off of us … I also don't believe that the costs will go up that much.”

Corporation tax

One thing CEOs can get behind though is Trump’s plan to lower corporation tax again from 21% to 20%. 

Trump apparently told CEOs including Apple’s Tim Cook, JP Morgan Chase’s Jamie Dimon and Walmart’s Doug McMillon of his intention to cut tax at a recent meeting of the Business Roundtable, the lobbying group for US CEOs.

Back in 2017, Trump reduced corporation tax from 35% to 21%, which cost the country $1.3 trillion.

Climate change reporting

Meanwhile, the Securities and Exchange Commission (SEC) was recently given the power to force public companies to disclose the risks which climate change poses to their businesses. 

This was watered down from what the SEC originally wanted, which was for companies to track and report on the climate-change impact of their supply chains. 

Even so, the US Chamber of Commerce then sued the SEC, arguing that even such watered-down regulations are harmful for corporate governance.

Project 2025, a 900-page document set out by a Trump-supporting think tank which some say is the blueprint for a Trump administration, goes even further – suggesting that the SEC be prohibited from requiring any type of climate-change disclosure in the first place.

CEO salary reporting

Project 2025 also suggests scrapping the requirement that public companies disclose the rate of CEO compensation compared to median worker pay. In 2023, the median head of an S&P 500 company earned more than $16m, an increase of nearly 13% from the previous year.

Immigration clampdown

The Republican Party has vowed to clamp down on migrants and carry out “the largest deportation operation in American history”. From a CEO’s point of view, many of those migrants have gone on to pay taxes in America - and become consumers - as well as fill menial jobs which many Americans do not want to do, so they are generally in favour of controlled migration. 

Green federal subsidy

Elon Musk’s support for Donald Trump is odd considering that the Trump administration plans to scrap any federal investment in green initiatives such as solar panels, batteries and electric vehicle facilities, sectors which directly affect Tesla. Trump’s spokesperson has called President Biden’s $1 trillion Inflation Reduction Act, which aims to pump prime climate-change technologies, the “New Green Scam”. 

What do US CEOs really think of Trump?

Until recently, the mood music around Trump was that CEOs were softening towards him, despite their public disavowal of him in the wake of the January 2016 Capitol riots, and his dog-whistle support for white supremacists.

In January 2024, JP Morgan CEO Jamie Dimon commented, “Take a step back, be honest. He was kind of right about NATO, kind of right on immigration. He grew the economy quite well. Trade tax reform worked. He was right about some of China.”

However, it is telling that not a single Fortune 500 CEO has come out in support of Trump apart from Elon Musk – and even he has rubbished reports that he was contributing $45m a month to the Trump campaign. “Simply not true,” he said.

Jeffrey Sonnenfeld, a Yale School of Management professor, said that Trump support had plummeted to virtually zero and “they want nothing to do with him now”.

Even the US CEOs who did join White House business think tanks as policy advisors quickly became disillusioned by what Sonnenfeld calls Trump’s “dysfunctional antics”.

Perhaps the truth is more prosaic. 

It doesn’t really matter who wins the race for the White House in November. According to Indiana University economist Phillip Powell, the US is set for an economic upswing regardless.

As a rule, US CEOs are against everything which Trump represents, from xenophobia to protectionism, and they believe in a global economy.

Or, as Cisco Systems CEO Chuck Robbins and chair of Business Roundtable put it, “The reality is … we as CEOs and we as a Business Roundtable, we’re going to work with whoever is in the White House.”