The line between prudence and indecisiveness is often a thin one. When CEOs first called time-out on major capital allocation and dealmaking decisions in the immediate wake of new tariff and counter-tariff announcements, it was indeed a wise move—especially for those with significant exposure to new levies. But watching and waiting won’t cut it for long, even with no tariff endgame in sight.
The longer indecision lingers, the more it risks sapping growth momentum. Inventories stockpiled in anticipation of new tariff announcements are running low. And investors are unlikely to cut much slack for CEOs who fail to keep growth on track—including those whose companies have lowered or suspended earnings guidance.
Shareholders will give no quarter to CEOs who fail to stare down uncertainty and deliver.
Our latest investor pulse survey, conducted a week after the tariffs were announced, found that 81% of investors expect companies to meet or exceed near-term guidance for this fiscal year. That’s only 4 percentage points less than our November survey, signaling that shareholders will give no quarter to CEOs who fail to stare down uncertainty and deliver.
While the path ahead may remain shrouded in uncertainty for some time, there are waypoints to help guide CEOs’ decision making in the weeks and months ahead.
First, being acutely attuned to changes in the geopolitical environment will increasingly be a source of competitive advantage. A tariff command center, staffed by in-house geopolitical and regulatory specialists armed with robust scenarios and signposts for triggering action, can give CEOs a much sharper sense of how trade and tariff developments impact their P&L. Leaders can harness those insights to mitigate risks, identify new opportunities, and ultimately make more informed decisions.
Second, remember that business has a seat at the tariff negotiating table. While the role of multilateral trade institutions and rules may be diminishing, there are already cases in which business leaders have argued for—and won—tariff exemptions for certain products.
Third, resilience matters more than ever—and investors are watching. Our latest pulse survey found that 49% of investors see preserving and growing margins as a top priority area for leaders, a 15-percentage-point increase over November. Reinforcing supply chains, which can drive up costs, gained 19 percentage points.
Fourth, tariffs are sticky. Businesses that benefit from levies have historically advocated to keep them in place. The protectionist measures in the Smoot-Hawley Tariff Act of 1930 took several decades to fully roll back, while most of the tariffs imposed by the first Trump administration were maintained under the Biden administration. CEOs should expect some form of tariffs to remain and prepare to comply with trade rules that could shift often.
This will require strategic calibrations—and recalibrations—across both the prices that companies charge their customers and how they manage supplier costs. Currently, blended tariffs imposed by the US on other countries are around 18% to 20%. Even if they stabilize at 10%, that is still five times greater than at the start of 2025—a level that will completely erode profit margins for some firms.
Fifth, no matter what happens with tariffs, the US is still the world’s largest economy, with a massive, dynamic consumer base. Simply put, many CEOs can’t walk away from the US. They need to find a way to adjust to tariffs and keep doing business there while diversifying into other markets, notably in the Global South. Companies that are serious about the US market will need one model for the US and potentially another model for all other markets.
Five Actions for Steering Through Tariff Ambiguity
A clear horizon is unlikely to manifest soon. But CEOs can successfully steer their companies through the current ambiguity by noting the waypoints and taking these five actions:
Build multiple buffers across inventory, order cycles, and delivery timeline—even while trade deals are being struck. With warehouses emptying, the time to transition to a longer-term procurement strategy is fast arriving. That strategy could include signing multiyear contracts with an array of suppliers, opting to build your own facilities, or adjusting suppliers’ country of origin.
Bear in mind that true diversification does not mean simply reducing overdependence on one nation by over-indexing on another. Standing up a tariff command center can help CEOs better identify which procurement options offer the optimal combination of cost and flexibility—not only for protecting margins, but for gaining a competitive edge.
Create a trade compliance capability. Adhering to laws and regulations governing imports and exports has become infinitely more complex. Companies that master this challenge will unlock an even greater competitive advantage. A strong trade compliance capability can help companies avoid fines, censures, delivery delays, lost revenues, and other negative consequences of trade noncompliance. It can also help companies reroute goods and adjust delivery dates when a tariff regime is suddenly thrown into question.
Calculate your own price under different scenarios—and add a tariff clause. Scenario planning is not just about finding alternative suppliers; it’s about having the information to negotiate with them effectively. Companies must use scenarios to gain their own understanding of what is a fair price ahead of discussions with their suppliers and customers. And whatever agreement is reached, a tariff clause is a must.
Understand the second-, third-, and fourth-order implications of tariff changes. A 10% tariff on a supplier does not necessarily translate into a 10% increase in costs. If your supplier’s supplier is subject to tariffs—or your supplier’s supplier’s supplier—that could result in a much higher effective tariff rate. So can retaliatory measures, such as counter tariffs or even boycotts.
Be in the conversation. While multilateral consensus may continue to characterize some old and emerging trading blocks, when it comes to trade with the US, it’s all about negotiation. CEOs need to be in the conversation as new trade regimes take shape to ensure that the best interests of their companies, shareholders, and industries are represented. If they haven’t already done so, leaders will benefit from engaging with lawmakers to educate them on what tariffs mean for their industry and working with them to reshape or postpone tariff changes—or seek exemptions.
CEOs across industries quite rightly hit pause in reaction to the tariffs announced last month. But they won’t have long to catch their breath. By following global trade waypoints and taking the right actions, they can push through the ambiguity of this moment—and whatever uncertainty lies ahead—to deliver growth and resilience for their companies.
