Boardrooms were right to fret about global unease, Australian Institute of Company Directors survey finds

US President Donald Trump’s tariff measures have validated mounting fears about protectionism and global uncertainty among Australian company directors.

A recent survey from the Australian Institute of Company Directors found nine out of 10 directors believed rising trade tensions under the presidents agenda threatened the economic outlook for Australia and the world.

The survey was taken about four weeks before Mr Trump dolled out sweeping tariffs to allies and foes alike last Thursday, creating huge uncertainty, from small businesses all the way up to investment banks.

Concerns about global economic uncertainty dethroned cost of living pressures, inflation and high interest rates worries that dominated boardroom conversations in the first half of 2025. Protectionism also climbed the ranks of concern.

Overall director sentiment had shown signs of recovery, with AICD’s Director Sentiment Index lifting by 9.7 points in the first half of 2025. The group said this was the strongest improvement since 2021.

This was before Trump’s tariffs upended global markets and cast doubt over business confidence.

AICD chief economist Mark Thirlwell said there were underlying issues that keep director sentiment in overall negative territory despite there being some encouraging signals from the Reserve Bank of Australia’s February rate cut.

Directors indicated to AICD they were less concerned about insolvencies now interest rate pressures on businesses were cooling. Concerns about a recession in Australia also fell, with 55 per cent of the 1127 company directors disagreeing that Australia would be in a recession in the next 12 months.

That marked a lift from 35 per cent in the previous survey.

“Double digit rebounds in the measures of economic outlook and business conditions reflect the positive impact of the RBA’s February rate cut, along with the receding recession risk,” Mr Thirlwell said.

“But directors are balancing that good news against mounting global economic uncertainty and growing concerns about protectionism.

“And persistent domestic challenges including productivity growth, the housing crisis, cost of living pressures and skills shortages continue to weigh heavily.”

More than half of directors are expecting the RBA to cut rates again in the next six months.

With a Federal election on the horizon, the AICD has called on the Government and Opposition to “commit to a comprehensive deregulation agenda within the first 100 days of the next parliament.”

The industry body claimed businesses were “struggling under the weight of poorly targeted regulation”.

“We strongly believe this needs to be a priority for the next Federal Government,” AICD managing director and chief executive Mark Rigotti said.

“And we’re calling on both major parties to announce what red tape they would repeal within the first 100 days of their government.”

About 59 per cent of directors said compliance and regulation was the biggest factor affecting their board’s risk appetite.