Trump, tariffs, and turbulence: Navigating geopolitical uncertainty in business

Mark Hallander
17. maj
3 min læsning

2025 has been marked by macroeconomic volatility and geopolitical unpredictability. The return of Donald Trump to the global stage - along with his signature tariff-driven approach to trade - raises critical questions for businesses worldwide. With broad-based tariffs reintroduced in 2025, supply chains once optimized for efficiency are now vulnerable to disruption, cost structures are shifting, and the rules of engagement in global markets are being rewritten. For global leaders, this is not just a political moment. It’s a business inflection point.

What we learned from Trump’s first term

When President Trump first introduced sweeping tariffs between 2018 and 2020 - most notably targeting China - it was part of a broader “America First” economic agenda. The idea was to stimulate domestic manufacturing, protect key industries, and reduce reliance on foreign imports.

The results were mixed:

Some U.S.-based producers benefited from reduced foreign competition.
But many others - particularly in agriculture, manufacturing, and retail - saw rising input costs and retaliatory measures from trading partners.
According to a 2020 report by the Peterson Institute, U.S. companies paid over $80 billion in tariffs between 2018–2020, with limited impact on reshoring or trade deficits.

One key takeaway here is that protectionist policies can change the rules of the game - but the outcomes are often unpredictable and not always beneficial.

The tariff landscape in 2025

In his second term, President Trump has expanded this approach:

A general 10% tariff on most imported goods.
Targeted tariffs up to 60% on countries like China, including key sectors such as electric vehicles, steel, and consumer electronics.
A renewed push for domestic sourcing, including potential tax incentives for “patriotic production.”

Impacts so far:

Companies are raising prices to offset rising import costs (Business Insider)

Supply chains are under pressure, especially in tech and consumer goods

Small and mid-sized businesses are feeling squeezed, with many lacking the negotiating power or capital to absorb new costs (CNBC)

Four strategic responses for business leaders

To navigate the uncertainty and maintain competitiveness, here are four strategies worth considering:

1. Supply chain diversification

This isn’t new advice - but it’s never been more urgent.

Companies that rely heavily on one region (e.g., China or Southeast Asia) are exposed to significant tariff risk. The move toward “China +1” or “China +2” is gaining momentum, with firms expanding into India, Mexico, Eastern Europe, and nearshoring in the U.S. or EU.

Practical move: Map your critical suppliers and categorize them by geopolitical exposure. Prioritize redundancy for high-risk nodes.

It’s not just about cost anymore - it’s about resilience.

2. Cost Management through smart efficiency

Instead of cutting headcount or raising prices, leading firms are using this moment to optimize operations, not just react to external shocks.

This could involve:

Investing in automation or AI to reduce unit labor costs
Re-negotiating supplier contracts with multi-year volume guarantees
Simplifying product lines by cutting down on SKUs (stock keeping units), which are the unique identifiers for each product variant, to improve sourcing efficiency.

A key question: Where can you achieve 5–10% efficiency gains without compromising value delivery?

Short-term pain can become long-term operational strength - if tackled deliberately.

3. Strategic market adaptation

Tariff environments often shift customer behavior - especially in price-sensitive categories. Smart companies are adapting product offerings, pricing models, or even regional strategies in response.

Consider:

Launching regional variants of products optimized for local supply chains
Adjusting product mix toward higher-margin offerings in tariff-heavy markets
Delaying or accelerating go-to-market plans depending on political signals

A lesson from 2018–2020 is that the winners were those who stayed agile - not those who waited for clarity.

4. Proactive engagement with policymakers

Trade isn’t just a backdrop - it’s increasingly a strategic battlefield where industry voices matter.

Leading companies and industry coalitions are now:

Participating in public consultations and trade policy forums
Lobbying for tariff exemptions or incentives
Sharing data-driven insights on how policies affect jobs, inflation, and innovation

Actionable step: Appoint a public affairs lead (or team) focused specifically on trade and geopolitical risk management.

Silence, in this climate, is a strategy with its own cost.

Conclusion: A new kind of readiness

We’re entering a business climate where volatility isn’t an exception - it’s the operating system. And Trump’s renewed trade policy is just one example of how geopolitics and economics are converging more tightly than ever.

The winners won’t be the most reactive - but the most prepared.

Prepared to rethink where and how value is created.

Prepared to move when the rules change.

Prepared to lead amid the noise.