The executives of the main corporations, including Target, Goldman Sachs and Pepsi, have invoked the same Boogey man of a word in the recent earnings calls: “uncertainty.”
The concern among large and small companies about the unstable business environment has focused on the tariff policies of President Donald Trump, which the White House has altered numerous times since Trump assumed the position.
A couple of judicial decisions last week pushed Trump’s most steep tariffs to Limbo, adding another layer of uncertainty as the judges of the Federal Court of Appeals determine whether a large strip of policies approves the legal meeting.
In response to rates changes, many American companies have chosen to put the hiring and investment plans for fear that a new tax can regret otherwise, experts told ABC News.
This paralysis runs the risk of exhausting the impulse of the economy and bowing to the US. In a recession, they added, while recognizing that the final result remains without being clear.
“These quite significant policy changes, whether they leave the administration or courts, can have a great financial impact on companies,” Gregory Brown, a professor of finance at the University of North Carolina, told ABC. “Profit can resort to losses and vice versa.”
“It has to be stressful for people in the first line of this in terms of their businesses or jobs being highly affected,” Brown added.
The Trump administration has rebuked the criticisms of its tariff approach out again, saying that flexibility offers White House officials to the use of commercial negotiations with countries led by taxes.
In statements to “This Week” by ABC News in April, Treasury Secretary Scott Besent described the position as “strategic uncertainty.”
“You are not going to tell the person on the other side of the negotiation where you are going to finish. And no one is better to create this leverage than President Trump,” Besent said.
Meanwhile, a large number of important companies have warned that they can suffer losses due to lack of clarity.
The CEO of Target, Brian Cornell, last month warned about “mass potential costs” due to tariffs, regretting the difficulties raised by “the rates we face and uncertainty about how these rates could evolve in different categories.”
In April, the Goldman Sachs CEO, David Solomon, expressed an alarm about possible damage that could result from the murky perspective.
“This uncertainty around the way forward and fears on the potentially growing effects of the commercial war have created material risks for the United States and the global economy,” Salomon told analysts.
A CEO confidence survey fell to its lowest level since 2022, the Conference Board found last month. More than half of the CEO expect the conditions to get worse in the next six months, according to the survey.
The Secretary of the Treasury, Scott Besent and President Donald Trump observed during the White House Digital Assets Summit in the White House Dining room, on March 7, 2025, in Washington, DC.
Anna MoneyMaker/Getty images, file
Political uncertainty puts companies in a link because they cannot evaluate the costs and benefits of important long -term decisions, such as investment and hiring, ABC News, professor of professional practice at Columbia University and former attached economist of Scotiabank.
“Companies always have risks ahead of them. These risks can price in terms of the cost of loans or loans and prices of goods or services,” said House. “In a period of uncertainty, commercial activity is greatly chilling because there is almost now a way to anticipate what the price of an activity should be.”
The uncertainty faced by companies has coincided with an anxious moment for consumers. The attitudes of consumers have been grated for four consecutive months, according to tariffs, according to a survey conducted by the University of Michigan.
Consumer spending, which represents approximately two thirds of the economic activity of the United States, could weaken if buyers’ appetites decrease. In theory, a slowdown in spending could mark some companies while trying to navigate the always changing business environment, some experts said.
“If consumption begins to go down and companies are not investing, it is when you start seeing small parts of the Gross Domestic Product going down,” Jadrian Wooten, professor of economics at the University of Virginia Tech told ABC. “We are in that danger zone.”
The St. Louis Federal Reserve Bank released A study in April that found a sudden increase in economic uncertainty could establish the conditions for an economic recession.
Until now, the key measures of the economy have largely challenged the fears of a recession.
The unemployment rate is historically low level and the growth of employment remains solid, although it has slowed from the previous maximums. In recent months, inflation has cooled, reaching its lowest level since 2021.
The Organization for Economic Cooperation and Development, or OECD, predicted continuous growth for the economy of the United States in 2025 and 2026, although at a slower pace than last year. The recession forecasts on Wall Street faded in recent weeks after Trump receded some tariffs.
Brown, from the University of North Carolina, said that the uncertainty faced by companies is unmistakable, but its precise economic effect is yet to be seen.
“Uncertainty is real,” Brown said. “How much of this is really concretized and really appears in the data, that is a different question.”
