CFOs fear effects of US trade war - global survey

Trade uncertainty has risen to be the biggest risk for corporations, according to the latest CNBC Global CFO Council quarterly survey EDIT EDIT EDIT EDIT EDIT EDIT EDIT EDIT

Trade uncertainty is now the biggest risk for corporations and business leaders, according to the latest CNBC Global CFO Council quarterly survey.

 

CNBC reports that some 35 percent of global CFOs say US trade policy is the biggest external risk their company faces, up from 27 percent in Q1 and tripling from the 11,6 percent who cited trade policy in the fourth quarter of 2017.

 

As GDP rises and employment figures rise amid profit-friendly corporate tax cuts, nearly 65 percent of North American CFO respondents said US trade policy is likely to negatively impact their firms over the next six months; 20 percent of CFOs indicated the impact would be "very negative". Sixty-six percent of Asia-Pacific region CFOs expect a negative impact on their firms.

 

"What is interesting is business leaders as well as investors don’t like uncertainty, and I think we are being exposed to an abnormal amount of sausage-making in the process," said MongoDB CFO and CNBC Global CFO Council member Michael Gordon on CNBC's Worldwide Exchange earlier this week.

 

There may be volatility in the environment, but 60 percent of North American CFOs maintain that the full benefits of the Trump tax cuts remain, regardless of the trade risks, with 40 percent  saying that uncertainty around trade is hurting their firm's ability to take full advantage of tax reform.

 

And despite the trade uncertainty, the CFO Council's global economic outlook remains rosy. No global region was seen as worse than "stable" for the sixth straight quarter and the USA was seen as "improving" for the eighth straight quarter.

 

The CNBC Global CFO Council represents some of the largest public and private companies in the world, collectively managing more than $4,5 trillion in market capitalisation across a wide variety of sectors.