By Kristin Broughton, Mark Maurer and Jennifer Williams

Finance executives are stressing the importance of a steady hand in the C-suite and a clear-eyed view of business risks as their companies confront a thicket of unknowns on tariffs and other policy changes under the Trump administration.

Chief financial officers discussed the need to provide stability in steering a company's finances through periods of uncertainty during the Wall Street Journal CFO Network Summit on Thursday. Throughout the event, CFOs said questions on the impact of tariffs and government funding cuts have made core aspects of their roles -- forecasting, supply-chain management and enterprise risk-planning -- far more difficult.

Trade policy turned into an exercise in brinkmanship in recent weeks, rattling markets. President Trump's 25% tariffs on Mexico and Canada took effect this week following a one-month postponement, sending stocks down sharply. On Thursday, however, the administration delayed tariffs on Canadian and Mexican goods that comply with the North American free trade pact until April 2, and a day earlier provided a one-month exemption to automakers. Last week, the president also announced an additional 10% tariff on goods from China.

What the new administration most needs to do is communicate to investors that they have trade and economic policies under control, said Jim Zelter, president of Apollo Global Management, noting that the White House "leads by headlines, leads by provocation."

"That's their biggest challenge, to keep calm in the markets," he said, pointing to economic risks including inflation, and potentially stagflation, a combination of weak growth and higher prices.

Finance chiefs said they were wrestling with whether to take action now to offset tariffs -- for instance, diversifying supply chains, working with suppliers to trim costs or passing through higher prices to consumers -- or wait and see which levies stick. In response to tariffs in Trump's first term, many companies diversified suppliers, and continued to do so during the pandemic. But those playbooks don't necessarily apply now, particularly with consumers stretched and perhaps unwilling to accept higher prices, CFOs said.

CFOs in recent years have addressed crosscurrents on various fronts, ranging from the shock of the pandemic followed by a sharp escalation in prices. Throughout the day, executives underscored that their companies have managed crises before, and that CFOs can lean on what they learned from other tumultuous periods.

"We've been here before," said Seun Salami, CFO of the investment firm Nuveen, describing finance chiefs as guardians. "We're not going to stay distracted. We're going to focus on what exactly it is that's going to drive the business forward, and let's do that in a way that has some science."

Joseph Wolk, finance chief at Johnson & Johnson, recalled the early days of the pandemic, when he and the company's chief executive at the time, Alex Gorsky, questioned whether to issue financial guidance, as other companies pulled theirs. J&J ultimately decided to make financial projections, viewing it as their responsibility as a healthcare company to tell investors their view on the future and the factors outside of their control.

"In times when there's uncertainty, knowing who you are, as an individual, as a company, really can lead to better leadership and get through times like these," Wolk said.

At the summit, finance chiefs discussed topics ranging from the outlook for corporate tax change; the backlash against diversity and inclusion policies; the outlook for mergers and acquisitions; and uses for generative artificial intelligence.

Attendees also heard from Mark Uyeda, acting chair of the Securities and Exchange Commission. The SEC is expected to ease overall regulation, with less enforcement against cryptocurrency companies and a sidelining of climate-disclosure requirements. "You want to be very methodical, very thoughtful in how you change direction," he said.

Uyeda described the SEC's agenda under former Chair Gary Gensler as "overly ambitious," featuring excessive rule-making.

Speaking on volatility in the stock market, Lynn Martin, president of NYSE Group, said investors have been expressing their views on the administration's policies -- through trading. On Thursday, major stock indexes fell, with the S&P 500 sliding 1.8%.

"It's our belief that the market is very much a daily report card for this administration," Martin said.

Write to Kristin Broughton at Kristin.Broughton@wsj.com, Mark Maurer at mark.maurer@wsj.com and Jennifer Williams at jennifer.williams@wsj.com

(END) Dow Jones Newswires

March 06, 2025 20:00 ET (01:00 GMT)

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