A MARTÍNEZ, HOST:
Big businesses are even more dependent on global trade. Here's what some CEOs are saying about the effects of tariffs. BlackRock's Larry Fink thinks tariffs could be productive eventually, but he's hearing from the businesses he talks to now that the economy is weakening as we speak. And JPMorgan's Jamie Dimon said, uncertainty is not a good thing. Jeffrey Sonnenfeld is an associate dean at the Yale School of Management. He just wrapped up his CEO caucus in Washington, D.C., with about a hundred top executives. Jeffrey, I got to imagine that CEOs are probably a little bit more forthcoming in private. What'd they tell you? What can you share with us?
JEFFREY SONNENFELD: No, that's exactly right. It was an amazing contrast between the business roundtable they went to in the afternoon where they sat, like, in a church basement somewhere in rows and columns, silently pious listening to the president rant.
MARTÍNEZ: (Laughter).
SONNENFELD: Whereas the exact people, you know, a hundred of them, whether or not the CEOs of JPMorgan, Pfizer, Dell, Goodyear, Duke Energy, Stanley Black & Decker, Steelcase and others, ADP, American Airlines, they're going quite candidly with each other about what dismay they have. We also had 60 major city U.S. mayors with them to keep everybody honest.
They are very discouraged. Eighty percent of them said they find themselves apologizing to our international partners for Trump's capriciousness and 85% say the Biden economy that Trump was handed was a strong legacy. And roughly 70% say that the Trump administration is going to be bad for the economy, and they're very concerned. Just with the quote you had from Larry Fink, 92%...
MARTÍNEZ: Yeah.
SONNENFELD: ...Of them say that they are increasingly concerned that the U.S. economy is headed towards a recession.
MARTÍNEZ: But Jeffrey, are they shaking in their boots, or are they just kind of annoyed?
SONNENFELD: They're actually shaking in their boots. There's something which caught us by surprise is while they thought that the market has fallen over 10- to 12%, and that's the same with consumer confidence that the Michigan survey has fallen by that same amount, 10- to 12%, which is stunning in this short amount of time. And the M&A deal activity has dropped off, which is undeniable. It hasn't been this low in over a decade. They want the market to drop yet even more before they start to speak out because they're so concerned about Trump's vindictiveness that the couriers of bad tidings get shot by this emperor.
MARTÍNEZ: Wait. Jeffrey, let me understand something. So if the markets get worse, if things get worse, then they're in a stronger position to criticize it because then it's obvious to everyone?
SONNENFELD: Yes. Right now, they do have market fluctuations as large as 10%, which are alarming but not cause to set the place on fire. However, if it drops by another 10%, they feel that will be the time they have to speak out on the economy. What caught us by surprise is they feel it's time to speak out now on the degradation of national security. The demoralization and mass layoffs at the CIA, the FBI, the dismissal of the foreign interference task forces and the Justice Department, and the relaxation of cybersecurity, where, you know, we have a thousand hits a day on the White House alone on cyber tax. They think it's time now to speak out on the defense, national defense, national security issues. But they want to wait a little bit for things to get even worse on the economy before they collectively speak out.
MARTÍNEZ: Jeffrey, let me squeeze in really quick Commerce Secretary Howard Lutnick. This is what he told CBS News when he defended the administration's trade policy.
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HOWARD LUTNICK: The only reason there could possibly be a recession is because of the Biden nonsense that we had to live with. These policies produce revenues. They produce growth. They produce factories being built here.
MARTÍNEZ: So is that what other CEOs think as well, I mean, that tariffs will ultimately eventually produce a growing economy?
SONNENFELD: No CEOs think that. And other than the fact there's no CEO we know that thinks Howard Lutnick knows quite what he's talking about. He reverses himself at the head-spinning speed of Donald Trump himself. He was screaming and yelling just two days ago there will not be a pause. And then, literally within the hour, he said there will be a pause on tariffs with Canada. He bounces all over the place.
But the Biden economy, as these CEOs that I just shared that data with you showed that 85% of them tell us that this is the strongest economy not only in their lifetime but the Biden economy they were handed was the strongest in American history and the strongest in the world. That's what 85% of CEOs say other than - no matter what Howard Lutnick says. We haven't had unemployment this low from the Biden years since "Bonanza" was the "No. 1" show on television in 1968.
MARTÍNEZ: (Laughter).
SONNENFELD: That's just ludicrous. So...
MARTÍNEZ: Yeah.
SONNENFELD: ...They were handed, you know, an economy...
MARTÍNEZ: Yeah.
SONNENFELD: ...That had 17 market highs in a year.
MARTÍNEZ: I've only seen "Bonanza" in reruns, Jeffrey.
SONNENFELD: (Laughter).
MARTÍNEZ: Jeffrey Sonnenfeld is a senior associate dean at the Yale School of Management. Jeffrey, thanks.
SONNENFELD: Thank you.
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