BREAKINGVIEWS-Trumpian stubbornness puts the onus back on CEOs

By Stephen Gandel

NEW YORK, April 8 (Reuters Breakingviews) - There’s nothing like trillions in losses to embolden America’s C-suite. CEOs and Wall Street heavy hitters have begun warning about President Donald Trump's “Liberation Day” tariff scheme, which sent the S&P 500 Index .SPX plummeting toward the 20% bear market decline threshold. As White House advisers signal indifference to investor pain, the latest victim of the trade war could be attempts to craft high-minded personas that elide their sharper business concerns.

JPMorgan JPM.N boss Jamie Dimon used his annual shareholder letter, released on Monday, to voice his concern. After throat-clearing about building an “inclusive economy” while acknowledging Republican concerns like undocumented immigration, his assessment of tariffs was clear: they will increase prices and recession risks. BlackRock's BLK.N Larry Fink, in a speech on Monday, was also blunt, saying stocks could drop another 20%, even if he posed it as a “buying opportunity.”

Hedge fund manager Bill Ackman, who predicted an “economic nuclear winter,” has joined the chorus, too. It’s easy to see why: market turmoil of this magnitude might usually merit a policy response. With Treasury Secretary Scott Bessent dismissing the selloff and the president describing the lurch as harsh “medicine,” that feedback loop has snapped. It falls to elite consensus to push back.

If this continues, it poses something of an awkward turn after CEOs, especially Dimon and Fink, tried to establish themselves as even-handed oracles of “stakeholder capitalism,” divorced from short-term stock movements. It’s a prudent political position, especially given Trump’s propensity for retribution: in January, Dimon told those worried about tariffs to “get over it.” Fink has said that Trump’s policies, including tariffs, would be good for the United States in the long run.

Eventually, though, the pain will be too much. Jeff Sonnenfeld, a professor of management at Yale, found in a poll of CEOs that, while 90% said they thought Trump’s tariff policies would backfire, almost none planned to speak out against them. When asked how far stock markets would have to fall to make them reconsider, nearly half said 20%, around where things stand now. Another 10% pushed the threshold to a 30% drop. Only a quarter said market movements would not change their behavior.

CEOs are of course already tethered to the stock market. Dimon, like his peers, gets most of his pay in options and restricted stock grants that pay out based on how his employer's shares perform over time. Republicans, long critical of social concerns in management, might ordinarily be happy to see their rhetoric match the reality. But the reason corporate chiefs could try to be above it all in the first place was the assumption that Washington would keep things on an even keel without their pressure. That notion might now be dispelled.

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CONTEXT NEWS

JPMorgan published CEO Jamie Dimon’s annual shareholder letter on April 7, in which he said tariffs “will likely increase inflation and are causing many to consider a greater probability of a recession.” Dimon added, “America First is fine, as long as it doesn’t end up being America alone.”

Larry Fink, CEO of asset management firm BlackRock, also on April 7 said that executives already believe the United States may be in a recession and that stock prices could fall another 20%. Hedge fund investor Bill Ackman, who had been a vocal supporter of U.S. President Donald Trump, posted on X that the tariffs will cause a “nuclear economic winter” and called for them to be paused.