Bank of America CEO: Trump Tariffs De-Escalating to 15%

Bank of America CEO Brian Moynihan has indicated that the Trump administration's trade policy is moving toward de-escalation. After a year of significant disruption, Moynihan believes the tariff landscape is stabilizing, offering businesses the clarity they need to plan effectively.

Speaking on CBS News' Face the Nation, he highlighted that while initial shocks affected small and medium-sized enterprises, the current trajectory suggests a more predictable environment. The focus is now shifting from uncertainty to operational execution.

According to Moynihan, the business community was "shocked" by the initial trade disruptions seen earlier in the year. He noted that in April, there was a "lot of lack of understanding about where this would end up," which directly impacted small and medium-sized businesses. This uncertainty made it difficult for companies to make purchasing decisions or plan for future growth.

However, the situation has evolved. Moynihan pointed out that as negotiations have progressed, the outlook has become clearer. Bank of America's internal analysis now suggests a broad tariff floor is emerging, allowing businesses to adjust their strategies accordingly. The initial disruption is giving way to a more structured approach to trade policy.

Moynihan provided specific details on where tariff rates are heading. He observed that rates are clustering around 15% for many countries, a shift from the previously discussed 10% baseline. This 15% level appears to be becoming the new standard for the "broad base of countries."

Moynihan characterized this shift as a positive development for stability. He stated, "To go from a 10% across the board, to 15% for the broad base of countries, not a huge impact." He added that this is where the Bank of America team sees the situation "starting to de-escalate." The higher rates are reserved for countries that decline to buy US goods or ease non-tariff barriers.

Despite the general de-escalation, Moynihan identified China as a significant exception. He described China as a "different question" due to complex factors including national security interests, rare earth minerals, magnets, batteries, and AI technology. These elements make the US-China trade relationship a "very different case" compared to other nations.

Additionally, Moynihan flagged North American trade as another distinct track. He referenced the USMCA, noting that the agreement "has to be redone" and is also a "different case." This refers to the agreement's scheduled review next year, which will likely introduce its own set of policy dynamics separate from the general tariff framework.

For smaller firms, Moynihan suggested that the current primary challenge is not the tariff rate itself, but labor availability. He explained, "So they're more their issue right now is, can I get the labor I need to do, to bid the contracts, to do the work I'm doing?"

Moynihan pointed to immigration policies as a major source of concern for these businesses. He emphasized that companies are not necessarily taking political stances on these policies but are pragmatically seeking answers. "It's not that they agree with them or are disagreeing. They just need to have the answer, and that's what they're looking for," he concluded.