• Bank of America CEO Brian Moynihan highlights tariff clarity as a top client concern amid trade policy volatility.
  • Businesses delay investments and reshoring efforts due to unpredictability, with automation accelerating as a response.
  • Economists project subdued U.S. growth (1.5% in 2024) and prolonged inflation above the Fed’s 2% target until 2026-2027.

Tariff Uncertainty Weighs on Corporate Planning

Bank of America CEO Brian Moynihan reiterated that clients across industries are urgently seeking clarity on trade tariffs to finalize business plans, underscoring how policy unpredictability continues to disrupt supply chains and investment timelines. "The first question we get is, 'What are the tariffs going to be?'" Moynihan noted, reflecting widespread corporate anxiety as the Trump administration weighs additional trade measures.

With inflation stubbornly elevated and U.S. GDP growth projected at just 1.5% this year, businesses face a dual challenge: navigating higher costs from existing tariffs while bracing for potential new ones. BofA economists now expect inflation to remain above the Federal Reserve’s target until late 2026, delaying anticipated rate cuts until mid-2026. "Until firms have visibility, you’ll see this hesitancy in capex," said one corporate banking executive, who asked not to be named discussing client sentiment.

Reshoring Meets Automation Push

While tariffs have spurred some reshoring initiatives, labor shortages and high domestic costs are driving companies toward automation rather than large-scale job creation. A manufacturing client recently told BofA advisors they’re "replacing three overseas facilities with one automated U.S. plant," a trend that may limit the employment impact of returning production.

Bankers note that trade uncertainty has particularly affected retail and industrial sectors, where supply chain adjustments are most acute. Meanwhile, investment banking revenues show resilience—up 7% industry-wide year-over-year—though dealmakers emphasize that cross-border transactions now require "contingency clauses for tariff changes" that didn’t exist two years ago.

Editor’s Note: This article has been updated to clarify BofA’s inflation forecast timeline.