CEO North America, July-August-September 2025

Can the U.S. Stock Market Continue to Survive Trade Uncertainty in Q3?

CEO North America / July – August – September 2025

As we enter Q3, North America’s C-Suite is still recovering from the impact of shifting tariff policies amid market uncertainty. However, investors are counting on the record-breaking stock surge that shook markets in late June to continue into the third quarter.

In 2025, tariff policies have been especially challenging to navigate in Q1 and Q2. However, as more trade agreements are finalized, the average tariff rates are dropping significantly.

Updated estimates from the Commerce Department show that the U.S. economy shrank for the first time in three years, with a 0.5% decline in Q1. According to economists, the jump in imports seen in the first quarter won’t be repeated, and shouldn’t affect overall GDP.

Top executives in North America have forecast billions in tariff impacts for Q3, prompting many companies to implement drastic cuts and increase prices for consumers just to stay afloat. The retail sector, which has been most affected by trade tensions, remains optimistic about a profitable summer season, despite a slowdown in consumer spending.

Although most imports from Canada and Mexico now meet the USMCA agreement, Trump has not yet officially confirmed his final tariff deal with Canada. With a July 9 deadline approaching, Canada’s steel and auto industries are anxiously awaiting more challenges as tensions increased between Canadian PM Mark Carney and President Trump during trade negotiations at the end of Q2.

Internationally, investors are forecasting the average tariff on China to drop to around 30% in the third quarter. Meanwhile, the European Union is on track to reach a tariff of just 5% on its imports.

Despite lower tariffs this quarter, the US economy is still expected to grow more slowly than in Q3 of the past two years. As inflation decreases, investors anticipate that the Fed will be able to take a calmer approach to monetary policy, possibly cutting rates by 25 basis points.

The C-suite’s global concerns are expected to decrease as geopolitical tensions in the Middle East seem to ease. However, markets remain cautious and ready to respond to any changes that could disrupt the oil and energy sectors.

In the third quarter, Mexican President Claudia Sheinbaum will continue to address allegations linking three of the country’s financial institutions to cartel activity. Sheinbaum, who generally maintains positive relations with the U.S. President, is requesting that the Trump Administration provide sufficient evidence of any criminal conduct. Mexico’s Finance Ministry has begun an internal investigation, and investors are hopeful that the sanctions imposed on these three institutions by the U.S. Treasury Department will not hinder the strengthening of economic ties between the two countries as the quarter progresses.

Immigration policies will be a key concern in Q3 as recent ICE raids, which have severely impacted North America’s agriculture sector, have caused absenteeism and labor shortages that could significantly disrupt the U.S. food supply. This quarter, the farming industry will push for immigration reform, advocating for an expansion of the H-2B visa program in the hope that the issue will finally reach a resolution so America’s backbone industry can continue to thrive.

Although inflation concerns eased in Q1 and Q2, the outlook for Q3 remains worrying for the C-suite. Inflation is expected to rise again in Q3 and continue increasing through to the end of the year, averaging about 2.9%.

Despite global uncertainty, as we move into Q3, the S&P 500 remains robust, and many growth opportunities are ahead for North America’s C-Suite, as the region focuses on developing new technologies, including AI, and boosting the production of domestically made goods.

̶ Stuart James, Editorial Director

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