Is corporate America already souring on Trump? | Optimism at the prospect of tax cuts and lighter regulation has given way to anxiety over trade policies

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>But there are indications that large swaths of corporate America are already beginning to sour on Trump, as concerns grow about the negative economic impact of his trade and immigration policies.

>Executives worry that Trump’s import tariffs will hit their businesses, his crackdown on undocumented immigrants will worsen an already acute labour shortage and his radical overhaul of government will severely disrupt the smooth functioning of the federal bureaucracy.

>“The initial euphoria we saw in January over a pro-business president is giving way to consternation,” says Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management.

>Some business leaders say the gloom is overdone. David Solomon, chief executive of Goldman Sachs, said this week that market participants were still “excited” by some of Trump’s policies, particularly the prospect of a “more growth-oriented agenda” that will “spur investment”.

>The administration’s moves to reduce regulation would, he told a banking conference on Tuesday, “unleash . . . animal spirits”.

>But as well as praising the new administration, Goldman’s Solomon also acknowledged that the “broad policy landscape” was “still uncertain”, especially when it came to Trump’s plans for immigration, tax, trade and energy. “There’s a lot of policy that is shifting, and until we have more certainty on that policy, that’s going to create a little bit of volatility,” he said.

>In private conversations, some Wall Street executives go much further. One senior investment banker says the disorder and unpredictability of Trump’s actions — and those of Elon Musk, the billionaire Tesla chief who has become one of his most senior lieutenants — was greater than many business leaders had anticipated.

>“With hindsight we did not appreciate the nature of what the administration was going to be like,” the banker says. “I do believe they are hurting their stated objectives of peace and prosperity.”

>Indeed, animal spirits are as yet in short supply. US dealmaking suffered its worst start to a year in a decade, as Trump’s bellicose trade rhetoric sent a chill through boardrooms: the overall number of US mergers and acquisitions plunged nearly 30 per cent in January to 873 deals, compared with a year ago, the lowest level since 2015, according to data from LSEG.

>Meanwhile, the National Federation of Independent Business’s Uncertainty Index rose 14 points to 100 — the third highest recorded reading. Consumer sentiment also fell by about 5 per cent, according to the University of Michigan monthly consumer sentiment index — its lowest reading since last July. The survey also noted a “12 per cent slide in buying conditions for durables, in part due to a perception that it may be too late to avoid the negative impact of tariff policy”. Sentiment has not been helped by data released this week that showed inflation rising to 3 per cent in January, fuelling concerns among economists that the world’s largest economy was heating up again.

>Businesspeople had largely dismissed his campaign talk of tariffs as bluff and bluster: at most, they would be a negotiating ploy to win concessions on trade, they thought. That has been exposed as wishful thinking.

>“All the trade policy attacks are on our allies rather than our adversaries, and that has CEOs really worried,” says Sonnenfeld. “Trump was elected on the economy and they now see the economy to be in jeopardy.”

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