Tariff concerns weigh on US firms despite optimism bounceback

A quarterly survey of US-based financial decision-makers has indicated a slight bounceback in economic optimism, despite the impact of tariffs on consumer prices and businesses still weighing heavily.

The CFO Survey, the product of a collaboration between Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta, found that the score on US economic outlook optimism rose by two points from 60.9 in the second quarter.

However, this comes as trade policy and tariffs retained their spot for the third consecutive quarter as the top concern for CFOs (30.3), followed by monetary policy (22.2) and inflation (16.5) in second and third place, respectively.

“Likely, it is the fall in uncertainty that helped boost optimism in the third quarter,” Sonya Ravindranath Waddell, Vice President and Economist at the Federal Reserve Bank of Richmond, said.

“The return of optimism and GDP expectations to levels more in line with the beginning of 2024 is reassuring. But concern about tariffs is real and impactful for many CFOs in the survey.”

The data also indicated that the firms that were most concerned with the impact of tariffs were:

• Less optimistic about the US economic outlook (59.9);
• Expecting reduced real GDP growth for the next 12 months (1.6);
• Expecting reduced revenue and employment growth for the remainder of the year;
• Expecting input costs to significantly increase in 2025 and 2026; and
• Expecting higher price growth in 2026 and 2026.

The survey found chief financial officers believe their capital spending will likely decrease in 2025 due to tariffs, and that price growth is believed to trend 30 per cent lower in 2026 and 25 per cent lower in 2026 if the additional ‘Liberation Day’ tariffs were never imposed.