By Alisha Haridasani
The threat of a trade war between the U.S. and China could wipe away the recent surge in business confidence among American corporations, according to Citigroup CEO Mike Corbat.
“From U.S. business, the belief is that the biggest threat to continued growth and expansion, and their business continuing to improve, is the threat of trade wars,” said Corbat in an interview with Cheddar on Thursday.
“The confidence coming out of tax reform and some of the benefits that came to companies and the investment we’re seeing, the expansion plans, to pull back from that at this point in time is unfortunate in many ways.”
Corbat did, however, acknowledge the need for the Trump administration to address and re-imagine skewed and outdated trade policy.
“A lot of the trade agreements that are out there today are old and need to be modernized,” he said.
This week, President Trump threatened to tax an additional $200 billion worth of Chinese imports, responding to China’s promise to retaliate against the White House's initial round of tariffs announced last week. In total, the administration has suggested as much as $450 billion in goods could be subject to taxes. That's particularly notable since the U.S. bought $505 billion worth of goods from China last year.
The tit-for-tat between the world's two largest economies came despite weeks of negotiations to resolve trade disputes, a key goal of the president, who campaigned on renegotiating unfair trade pacts.
In his interview with Cheddar, Corbat also called on the president to revamp immigration policies.
“Both from a personal perspective and a company perspective, we believe strongly in the sanctity of the family,” he said, alluding to the administration’s policy to separate migrant children from their families at the U.S.-Mexico border, which drew national backlash before the president reversed course.
“But we’re also big believers around reforms. Immigration reform is one of those things that we’ve got to get to the top of the pile and we need to make progress on.”
Corbat’s comments, echoing what Goldman Sachs CEO Lloyd Blankfein said on Wednesday, come as part of a wider trend of corporate executives speaking out on politically charged issues, from immigration to gun control.
“I think that’s become a necessity in some ways,” in part because of employee expectations, he said.
“We have 220,000 employees around the world and it’s important for them to know what our company stands for.”
For the full interview, click here.