Will businesses grow under Trump? CEOs think so

Much of the country is divided on whether President Donald Trump's election promises will translate to stronger businesses and lower living costs. However, it looks like a majority of CEOs have managed to find common ground. 

Executive coaching company Vistage surveyed over 1,400 U.S. small and midsize business CEOs following the presidential election, revealing that 55% of executives believe the economy will improve in 2025. In fact, 65% of CEOs anticipate tax policy changes under Trump — like reducing the corporate tax rate on domestic production and extending the 2017 Tax Cuts and Jobs Act  — will positively impact their businesses. Meanwhile, 44% of CEOs believe new labor and employment laws will boost their business. With Trump promises including overtime pay being scaled back on the federal level, paid leave remaining a state issue or federal minimum wage likely remaining at or near $7.25/hour, CEOs may find themselves budgeting less in labor and compliance costs. 

"Our CEOs believe that this shift in administration will create a more positive business environment for them," says Joe Galvin, chief research officer at Vistage. "One featuring lower regulations, lower interest rates, lower inflation, and overall, a pro-business policy that will allow them to grow and expand their businesses in their respective markets. On the other hand, some think those same reasons for positivity mean we'll see higher interest, greater inflation and greater instability."

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Notably, 60% of CEOs expect Trump's tariffs and trade policies will harm their businesses, and 29% anticipate the anti-immigration policies will hurt their labor force, according to Vistage. It's important to highlight that immigrants make up 62% of farmworkers in the U.S., as estimated by the National Agricultural Workers Survey. The U.S. food supply chain will likely suffer, making certain produce used by businesses and Americans alike unaffordable. 

President Trump also reiterated that his administration will impose 25% tariffs on Mexico and Canada starting February 1. The president seems less certain about his proposed 10% tariff on China, but it's not off the table. According to the U.S. Census Bureau, Mexico, China and Canada account for 40% of imported goods, some of which businesses depend on to function.

Trump's tariff policies in 2017 and 2018 did lead to higher costs for goods overall, causing job losses and high living costs, according to a 2019 Federal Reserve report. 

"It's safe to say that we anticipate another round of potential pain for organizations, especially for businesses that rely on components from other countries," says Galvin. "Many feel those tariffs will fuel another round of inflation and drag profitability down."

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Despite these fears, businesses still plan to grow, at least in the first half of 2025, notes Galvin. Vistage found that 47% of CEOs report they will make investments in Q1, while 15% plan to make investments throughout the year. Sixty-five percent of CEOs intend to increase hiring for the year overall, and just 5% plan to reduce their workforce. 

"Inflation is more or less stable, interest rates have come down — whether they come down more or not, we won't know, but right now is the time to strike," says Galvin. "We see a firm belief that we're entering a growth cycle."

Galvin predicts that the labor market will begin to swing more in favor of workers as well, with the newfound focus on growth. And while return-to-office mandates are now required at the federal level and have become increasingly popular for large companies, Galvin is confident that smaller companies will have a different attitude towards flexibility.

"Small and mid-size companies do not have the salaries big companies have, but they can compete with flexibility and work environments where workers want to be," he says. "We anticipate greater mobility and opportunities for workers."

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CEOs' optimistic outlook extends to technology as well, with 77% perceiving generative AI tech as a "tremendous" business opportunity, and 45% planning to increase their tech budgets in the next year, according to Vistage. However, just 22% of CEOs report incorporating AI into their daily operations, hinting that businesses are struggling to make the tech an effective part of their business.  

Galvin warns employers against forgetting about the importance of cybersecurity in waves of new tech developments. He points out that 40% of small and mid-size businesses still don't have an established security plan in place, and 5% of their CEOs report that a cybersecurity attack resulted in lost or compromised data in 2024. 

"The cyber threat intensifies with the use of artificial intelligence, and it is incumbent upon CEOs to be vigilant," says Galvin. "You could lose everything in a blink of an eye."

Ultimately, Galvin is optimistic about the future of smaller businesses in the U.S., despite uncertainty about what economic policies will eventually go into full effect under Trump. He advises CEOs to take advantage of this moment of growth while they can. 

"We're now moving into the second half of the 2020s, and all the indications, both economic and our CEO sentiment [data], suggest that we are in a rising economy," says Galvin. "And we think that's a positive."