Citigroup CEO: US Businesses Delay Investments, Hiring Amid ‘Limbo' of Tariff Uncertainty

Core Viewpoint - Most business clients of Wall Street banks believe they can manage U.S. tariffs of up to 10% on foreign countries, including China, but higher tariffs would pose significant challenges [1][2]. Group 1: Tariff Impact on Business - Companies are currently in a state of uncertainty regarding investments and hiring due to the fluctuating tariff situation [5][6]. - A 10% tariff is generally seen as manageable by clients, while a 25% tariff would be much more difficult to absorb [2]. - The Trump administration has imposed a 145% duty on imports from China, marking the beginning of a trade war, while other U.S. tariffs are currently on a 90-day pause [3]. Group 2: Economic Phases - The tariff agenda is unfolding in three phases: the first phase involves a pull-forward of spending from consumers and corporations [4]. - The second phase indicates that companies are hesitant to make investment and hiring decisions, leading to a "wait and see" approach [5]. - The third phase will occur once tariff decisions are finalized, clarifying their impact on consumer demand [5]. Group 3: Short-term Concerns - Recent weeks have seen rapid changes and announcements regarding tariffs, leading to a cautious outlook for the longer term [6]. - Some companies have paused capital investment and hiring decisions, which could negatively affect overall demand in the economy [6].