Why Are CEOs Warning President Trump Of Tariff Disruptions?

With President Trump back in the headlines over his proposed tariffs, US’ top executives are preparing for significant operational and financial headwinds as the changes begin to take shape.

According to KPMG’s 2025 US CEO Outlook survey, 86% say they plan to raise prices on goods and services to manage tariff-related costs.

The survey gathered insights from 400 CEOs of companies generating at least US$500min annual revenue.

Tim Walsh, KPMG CEO said to Yahoo Finance’s Opening Bid: “CEOs are needing to react as it relates to their tariffs (and) their supply chains.

“They’re doing cost takeout to react to that additional cost.”

Tim added that the pricing decisions execs are making are now closely aligned with customer tolerance: “Companies are taking pricing decisions depending on what their consumers can absorb.”

On Monday, President Trump announced a 25% tariff on all medium- and heavy-duty truck imports, effective November 1, via a Truth Social post – Trump’s social media platform.

The move, which aligned with survey findings, underscores Trump's renewed commitment to bolstering domestic manufacturing.

Tariffs affecting business operations

KPMG’s report warns that tariffs could compress margins, destabilise supply chains, and increase consumer prices. 

A striking 89% of CEOs said tariffs will significantly affect their business operations over the next three years.

In response, 85% of executives are adjusting sourcing strategies, with a heavy emphasis on reshoring – bringing production and materials back to the US. 

This shift is visible across sectors, including automotive, retail, manufacturing and tech.

Trump’s "Liberation Day" tariffs, enacted in April, introduced a 10% baseline duty on most imports. 

Among targets of the tariffs, China faces rates over 30%, Brazil and India 50% and the EU 15% under a recent agreement.

Other targeted measures include 50% tariffs on steel and aluminium and 25% on automobiles and parts.

Ford CEO expresses concern

Jim Farley, Ford CEO, warned this week that Trump’s tariff policies are damaging for US carmakers.

With 80% of its vehicles being made in America, Jim said at Ford’s Pro Accelerate Conference in Detroit: “I mean, it’s frustrating because we’re the most American auto company, and we export the most, and yet, we have this US$2bn headwind, which prevents me from investing even more in the US.”

Tariffs vary by product and the country of origin, but the car manufacturer pays anywhere between 25% and 70% on the imported items, which the CEO says “adds up to US$2bn”.

They particularly affect the Ford’s F-150 trucks as Jim said they have to “import literally thousands of dollars for the parts”.

In an interview at the start of October on The Verge’s Decoder podcast, he said that the tariffs are “not a fair fight”, addressing that the company will be heavily affected by the new duty on steel and aluminium.

However, at the Ford conference, Jim added that the automaker has had “some really good conversations with the Trump administration” and is seeking support from the White House over making the tariffs more reasonable.

Broader CEO outlook

Despite these challenges, the report by KPMG shows that CEOs are widely remaining optimistic.

It shows that while global economic confidence has fallen to pandemic levels at 68%, 79% of CEOs are optimistic about their firm’s prospects.

To support future growth, there is a large focus on AI, with 71% of execs using a combination of investment in AI and maintaining high-potential talent within their business strategy.