Treasury
Tariff Scenario Planning: Five Strategies for CFOs
After Trump did not immediately implement tariffs in his first week in office, businesses still face policy uncertainty. KPMG expert Andrew Siciliano advises CFOs to start from the worst-case scenario, analyze rules of origin, consider advance imports and tariff recovery strategies, and continuously track policy developments to address potential tariffs on Canada and Mexico that may take effect on February 1.
Tax Foundation: Trump Tariffs to Shrink Economic Output by 0.4%
A latest report from the Tax Foundation shows that the import tariffs on Canada, Mexico, and China announced by President Trump will reduce U.S. economic output by 0.4% in the long term and result in the loss of 344,000 jobs. This estimate does not account for retaliatory measures by trading partners. The tariffs are expected to take effect as early as February 1 and could generate $1.2 trillion in federal revenue between 2024 and 2034.
Republican Bill Seeks to Strengthen Trump's Global Tax Strategy
House Ways and Means Committee Chairman Jason Smith and all Republican lawmakers introduced the Defending American Jobs and Investment Act (H.R. 591) on January 22 to strengthen President Trump's executive order signed on January 20, which revoked U.S. participation in the OECD global tax agreement. The bill aims to authorize countermeasures against discriminatory foreign taxes and directs the Treasury Secretary to investigate foreign non-compliance with U.S. tax rules. Experts believe this marks a significant shift in U.S. international tax policy, potentially having far-reaching implications for CFOs of multinational corporations.
Deloitte Survey: CFOs Expect Salary and Wage Costs to Rise 7.3% Over the Next 12 Months
Deloitte's latest survey shows that 200 CFOs surveyed after the U.S. election expect salary and wage costs to rise by 7.3% over the next 12 months, nearly doubling the previous quarter's expectation of 3.65%. The financial services sector expects the highest increase at 8.65%. CFO confidence in the economy and business environment has reached its highest level in 10 quarters.
The Conference Board: The U.S. economy will remain strong in 2025, with expected growth of 2.3%
The Conference Board forecasts 2.3% growth for the U.S. economy in 2025, citing strong momentum, but a slight decline in leading indicators suggests risks remain. The International Monetary Fund projects U.S. GDP growth of 2.7%, and a World Economic Forum survey shows that most chief economists expect Trump's policies to push inflation higher.
Trump signs memorandum, US withdraws from OECD global tax deal
On the first day of his second term, President Trump signed a presidential memorandum announcing the US withdrawal from the OECD global tax deal, directing the Treasury and Trade Representative to notify the OECD that relevant commitments are invalid, and requiring a report on investigations into other countries' tax rules within 60 days. This move means that the global minimum corporate tax agreement faces obstacles in the US and requires congressional action.
Slowing inflation eases upward pressure on borrowing costs, benchmark interest rate indicators retreat
The slowdown in U.S. core inflation growth in December led to a significant single-day drop in the 10-year Treasury yield, and market expectations for the number of rate cuts by the Federal Reserve this year have been revised upward. Although energy prices pushed up the overall CPI, the easing of core price pressures provided relief to investors. Federal Reserve officials stated that the process of fighting inflation is ongoing, but achieving the 2% target will still take time.
EY: US IPO fundraising surges 47% in 2024, expected to continue climbing in 2025
A latest report by Ernst & Young (EY) indicates that, boosted by accommodative monetary policies, total US initial public offering (IPO) fundraising in 2024 grew by 47% compared to 2023. Looking ahead to 2025, against the backdrop of the Federal Reserve potentially continuing to cut interest rates and the Trump administration's proposed pro-business policies, US IPO fundraising is expected to further rise to a range of $40 billion to $50 billion.
Strong Employment Growth Cools Expectations for Fed Rate Cut in Early 2025
According to data from the U.S. Department of Labor, nonfarm payrolls increased by 256,000 in December, far exceeding expectations, and the unemployment rate fell to 4.1%. The strong employment report prompted interest rate futures traders to raise the probability of the Fed keeping rates unchanged after its May meeting from 45% to 67%. Economists believe that with a stable labor market, the Fed may extend its pause on rate cuts, and there is even a risk of rate hikes.
Four Key Points of CFO Pricing Strategy in 2025: From Passive Response to Proactive Action
Facing easing inflation and policy uncertainty, corporate pricing strategies in 2025 will shift toward being proactive. Adam Echter proposes four recommendations: strengthening internal and external value communication, being cautious with price cuts, avoiding excessive concessions, and seeking low-cost, high-perceived-value additions.