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Mohamed A. El-Erian

Why CEOs are Split on Trumponomics

Executives like the results better than the methods. It’s up to them to help improve outcomes. 

Companies have embraced less red tape and taxes. 

Companies have embraced less red tape and taxes. 

Photographer: Scott Olson/Getty Images

When asked about President Donald Trump’s economic policies, most U.S. business leaders are likely to offer a polite but nuanced response. They welcome measures that have improved the operating environment for their businesses and sustained America’s economic outperformance. But they also wonder whether more could have been accomplished by working across party lines and with international allies. That distinction is increasingly critical now that the U.S. is threatened by a rapidly slowing global economy and rising risks of financial market volatility.

While views do — and should — differ on whether the Trump administration should have slashed taxes and regulations in a more efficient and equitable manner, the majority of CEOs will tell you that their businesses received a boost from those measures. Their tax burdens were reduced, which, along with incentives to bring back cash held abroad, increased the scope for investments in plant and equipment, not to mention profits and share buybacks. Red tape was cut, reducing costs. Robust household confidence, underpinned by a solid labor market sustaining an above-trend pace of job creation, buoyed domestic demand for their products.