President Donald Trump‘s tariffs sparked widespread economic concern, but at least one CEO believes the policy may boost his company’s profits.
Why It Matters
Trump announced, and then paused, tariffs on dozens of countries around the globe earlier in April. The announcement sparked concerns about a recession as the stock market took a hit after his announcement. Trump, however, has said the tariffs are necessary to restore U.S. manufacturing jobs and close trade deficits.
While most of the tariffs were given 90-day pauses to allow more time to work out new trade deals, the U.S. remains locked in a trade fight with China. Tariffs on Chinese imports remain at 145 percent, fueling concerns about whether American consumers will pay higher prices on those goods.
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What To Know
ServiceNow CEO Bill McDermott told Fortune magazine on Thursday he believes the economic concerns caused by the tariffs may benefit his own company. ServiceNow is a company that uses AI and automation to simplify workflows for IT.
McDermott told Fortune he believes companies will turn to his product to cut costs as they face tariffs.
“Companies have uncertainty in the global economy, which is why they’re looking at their [operating expenses], they’re looking at their margin profile, and they’re very focused on efficiency and effectiveness,” he said. “They can consolidate so much cost and take so much cost out with ServiceNow and implement so quickly and get a [return on investment] so quickly, they love that.”
Like other companies, ServiceNow saw its stock drop about 6 percent after Trump’s tariff announcement in early April, but it has since rebounded 21 percent.
Other CEOs have been less optimistic about the tariffs. A poll of 329 CEOs found that 67 percent do not support Trump’s policy, compared to 33 percent who do. Only 12 percent said they would positively affect businesses.
On the other hand, some union leaders have supported tariffs.
Kara Deniz, assistant director of communications for the Teamsters labor union, told Newsweek this month that the policy will bring union jobs back to the United States.
Polls suggest that the tariffs remain unpopular with most Americans.
A YouGov/The Economist poll, conducted among 1,625 adults from April 19 to 22, found that 50 percent of respondents believe tariffs would be “harmful” to the economy and would bring no major long-term benefits. Meanwhile, 39 percent said tariffs may cause short-term pain but would lead to long-term growth. It had a margin of error of plus or minus 3.3 percentage points.
An AP/NORC poll, conducted among 1,260 adults from April 17 to 21 found that 27 percent of Americans support tariffs while 52 do not. It had a margin of error of plus or minus 3.9 percentage points.
What People Are Saying
President Donald Trump, in a Truth Social post on April 7: “We have massive Financial Deficits with China, the European Union, and many others. The only way this problem can be cured is with TARIFFS, which are now bringing Tens of Billions of Dollars into the U.S.A. They are already in effect, and a beautiful thing to behold.”
Oregon Attorney General Dan Rayfield, a Democrat leading a lawsuit against the Trump administration over the tariffs, in a statement: “When a president pushes an unlawful policy that drives up prices at the grocery store and spikes utility bills, we don’t have the luxury of standing by – especially when so many Oregonians live on fixed incomes. These tariffs hit every corner of our lives – from the checkout line to the doctor’s office – and we have a responsibility to push back.”
JPMorgan Chase CEO Jamie Dimon, in his annual letter released after the tariff announcement: “The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession. And even with the recent decline in market values, prices remain relatively high. These significant and somewhat unprecedented forces cause us to remain very cautious.”
What Happens Next
Trump’s tariffs have been placed on a 90-day pause starting on April 9, but he has indicated they could go back into effect sooner. More than 90 countries have expressed interest in negotiating deals to avoid tariffs, Trump said.