Delta Air Lines on Wednesday became one of the largest American companies to warn that President Trump’s escalating trade war was weighing on its business and the global economy.
Speaking before Mr. Trump reversed many of the tariffs he had just imposed on most countries, Delta’s chief executive, Ed Bastian, said a recession was possible as companies pulled back spending. “Everyone’s being prepared for uncertainty,” he told CNBC, “if that continues, and we don’t get resolution soon, we will probably end up in a recession.”
Mr. Trump’s announcement helped send Delta stock up over 20 percent on Wednesday and prompted a broad rally in stocks. The president said he would pause the high tariffs for 90 days but kept a 10 percent tariff on most countries in place.
Still, the president’s reversal might not be enough to dispel the uncertainty that has made it hard for companies to plan ahead. The Trump administration also said on Wednesday that it would significantly raise tariffs on China. The United States might not strike trade deals with other countries within 90 days.
Airlines are highly sensitive to changes in the economy because air travel is among the first things that individuals and businesses can cut back on when they are worried about their paychecks or profits.
Mr. Bastian expressed shock at the speed at which the trade tensions had taken the wind out of the economy.
“We’re in uncharted, unprecedented uncertainty, when you look at what’s happened and the pivot so quickly to this self-inflicted situation,” he said.
Mr. Bastian’s comments are at odds with those of the Treasury secretary, Scott Bessent, who said on Wednesday that chief executives had told him the economy was solid.
On an investor call on Wednesday, Delta executives said demand for main cabin tickets on domestic flights had recently fallen. But they added that demand from frequent fliers, passengers in premium cabins and those traveling internationally had held up. One executive said there had not been a significant increase in passengers canceling flights.
In its first-quarter earnings release, Delta said a lack of clarity about the economy prevented it from telling investors how much money it expected to make this year.
Some customs data show a sharp decline in foreigners traveling to the United States. In March, the number of foreigners entering 42 major U.S. airports was down nearly 11 percent from a year earlier, according to AH Datalytics, a data analysis and consulting company. The number of Americans entering the airports was up 5 percent.
Mr. Bastian told CNBC that some 80 percent of Delta’s international bookings were made in the United States. “U.S. consumers are looking to go somewhere, particularly to try to get a reprieve from all the craziness we’re going through,” he said.
Delta said it no longer planned to increase its capacity, or the total number of seats available on flights, in the second half of the year. Wall Street analysts said such cost cutting moves helped drive Delta’s shares higher earlier on Wednesday even before Mr. Trump’s tariff reprieve. They are down over 25 percent this year.
