CEO North America, April-May-June 2025

Will Trump’s Tariffs Stall Economic Growth in Q2, 2025?

CEO North America / April – May – June 2025

In the second quarter of 2025, North America’s C-Suite is preparing for economic uncertainty concerning trade.

Since Trump’s inauguration, the President has pressured the nation’s businesses to increase their domestic production or face consequences. Trump’s tariffs have particularly punished the auto industry, as well as steel and aluminum importers, and are projected to affect a growing number of markets following “Liberation Day. “

Trump’s inconsistent decision-making regarding tariffs has led industry experts to question their long-term impact, as some of the President’s retaliatory levies seem to be an exaggerated response rather than a well-considered long-term economic strategy.

This quarter, an internal focus on American-made production is encouraging industries to assess their options for expanding U.S. operations. A.I. investments in the U.S. increased in the first quarter and are expected to grow this quarter. Throughout the following months, the auto industry is also expected to make further moves to domesticate production to avoid tariffs.

Global markets also anticipate supply chain disruptions and resource shortages on the horizon. Since Trump’s announcement of steel and aluminum tariffs, other industries, such as copper, have rushed to stockpile resources out of fear of impending tariffs.

Uncertainty also lingers in the C-Suite regarding whether tariffs could fuel inflation. The Bureau of Labor Statistics reports that national inflation stands at 2.8%, significantly above the Federal Reserve’s inflation target of 2%.

Cross-border tensions have remained intense as Trump continues to threaten the sanctity of the USMCA. The President began 2025 with heightened tensions with Canada, and despite Justin Trudeau stepping down as leader, relations have not improved as Trump continues to impose strict levies on America’s largest trading partner.

Canada’s upcoming election is expected to further impact North American markets. Trudeau’s successor, Mark Carney, who competes against Conservative Leader Pierre Poilievre, has voiced strong opposition to Trump’s tariffs on Canada and has promised to respond accordingly if he is elected on April 28th. Carney is favored to win the election despite his lack of political experience, thanks to his strong economic background.

As we move into Q2, political relations have improved south of the border, and a mutual respect is beginning to grow between President Trump and Mexico’s President, Claudia Sheinbaum. Trump and Sheinbaum have recently been working on strengthening security between the two nations, and this quarter, they will work together on building a solid border with Mexico’s southern neighbor, Guatemala.

Despite the challenges ahead, the S&P 500 remains strong, and consumer spending has stayed steady. Although Q2 is a quarter filled with uncertainty, many growth opportunities lie ahead for North America’s C-Suite.

̶ Stuart James, Editorial Director

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