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TOPSHOT - US President Donald Trump holds a chart as he delivers remarks on reciprocal tariffs ... More during an event in the Rose Garden entitled "Make America Wealthy Again" at the White House in Washington, DC, on April 2, 2025. Trump geared up to unveil sweeping new "Liberation Day" tariffs in a move that threatens to ignite a devastating global trade war. Key US trading partners including the European Union and Britain said they were preparing their responses to Trump's escalation, as nervous markets fell in Europe and America. (Photo by Brendan SMIALOWSKI / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
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The early verdict is in: President Trump’s “Liberation Day” tariffs sent stocks tumbling last week, with the NASDAQ reaching bear market territory.
China said it was going to retaliate with its own 34% tariffs on American goods. The impact could be swift, sending prices surging.
For instance, the cost to manufacture an iPhone is expected to go up 54% for Apple, according to The Wall Street Journal. The BBC says shoes from companies like Nike and Adidas will likely go up 10-12% in price. Even coffee shops will be affected, with the price of a cup of joe going up as much as $2. No industry is protected from the impact, and the risks are acute. Raising prices could drive away customers, but failing to raise prices will cut into profitability.
Executives at companies big and small are now faced with a series of choices:
Raise prices on U.S. consumers to account for the new taxes.
Eat the cost of tariffs—sacrificing margins or even operating at a loss—and try and wait it out.
Begin the complicated and hard process of building domestic manufacturing capacity.
The right course of action will differ between industries and companies. Here are three examples:
The publishing company with narrow margins that relies on paper imported from Canada may not be able to hold the line on prices for very long.
A carmaker with a lot of inventory already in the U.S. may be able to wait a while before making the same decision.
A shoe company executive decides to start building a new factory.
From coffee chains to cell phones companies, everyone will face a version of these decisions.
There are very different paths for very different companies, and there’s no one size fits all solution, especially when we’re in a period of major uncertainty and volatility. It’s entirely plausible that President Trump may change his mind in a few days and roll back some of the tariffs. Or he won’t. But the CEOs of all these companies face the same challenge: They need to make decisions and lead their teams through this uncertainty, and the playbook remains the same in every case.
Be Prepared
If there are any CEOs out there who weren’t already thinking about tariffs, then they weren’t doing their jobs. As soon as Trump was elected, leadership teams needed to get to work on game plans for how they were going to handle tariffs. This should not have come as a surprise — Trump had been talking about it the entire campaign. This is the equivalent of watching the tape in football; you’ve got to always be on the lookout for what the other team is going to do. No one should be setting up a meeting right now—or even last week—to try and figure out how they’re going to handle tariffs. It should have already been decided.
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