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President Donald Trump says Wednesday will be “Liberation Day”a moment when he plans to roll out a set of tariffs that he promises will free the United States from foreign goods.The details of Trump’s next round of import taxes are still sketchy. Most economic analyses say average U.S. families would have to absorb the cost of his tariffs in the form of higher prices and lower incomes. But an undeterred Trump is inviting CEOs to the White House to say they are investing hundreds of billions of dollars in new projects to avoid the import taxes.It is also possible that the tariffs are short-lived if Trump feels he can cut a deal after imposing them.“I’m certainly open to it, if we can do something,” Trump told reporters. “We’ll get something for it.”At stake are family budgets, America’s prominence as the world’s leading financial power and the structure of the global economy.Here’s what you should know about the impending trade penalties: What exactly does Trump plan to do? He wants to announce import taxes, including “reciprocal” tariffs that would match the rates charged by other countries and account for other subsidies. Trump has talked about taxing the European Union, South Korea, Brazil, and India, among other countries.As he announced 25% auto tariffs last week, he alleged that America has been ripped off because it imports more goods than it exports.“This is the beginning of Liberation Day in America,” Trump said. “We’re going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they’ve been taking over the years. They’ve taken so much out of our country, friend and foe. And, frankly, friend has been oftentimes much worse than foe.”In an interview Saturday with NBC News, Trump said it did not bother him if tariffs caused vehicle prices to rise because autos with more U.S. content could possibly be more competitively priced.“I hope they raise their prices, because if they do, people are gonna buy American-made cars,” Trump said. “I couldn’t care less because if the prices on foreign cars go up, they’re going to buy American cars.”Trump has also suggested that he will be flexible with his tariffs, saying he will treat other nations better than they treated the United States. But he still has plenty of other taxes coming on imports.The Republican president plans to tax imported pharmaceutical drugs, copper, and lumber. He has put forth a 25% tariff on any country that imports oil from Venezuela, even though the United States also does so. Imports from China are being charged an additional 20% tax because of its role in fentanyl production. Trump has imposed separate tariffs on goods from Canada and Mexico for the stated reason of stopping drug smuggling and illegal immigration. Trump also expanded his 2018 steel and aluminum tariffs to 25% on all imports.Some aides suggest the tariffs are tools for negotiation on trade and border security; others say the revenues will help reduce the federal budget deficit. Commerce Secretary Howard Lutnick says they will force other nations to show Trump “respect.” What could tariffs do to the U.S. economy? Nothing good, according to most economists. They say the tariffs would get passed along to consumers in the form of higher prices for autos, groceries, housing, and other goods. Corporate profits could be lower and growth more sluggish. Trump maintains that more companies would open factories to avoid the taxes, though that process could take three years or more.Economist Art Laffer estimates the tariffs on autos, if fully implemented, could increase per vehicle costs by $4,711, though he said he views Trump as a smart and savvy negotiator. The investment bank Goldman Sachs estimates the economy will grow this quarter at an annual rate of just 0.6%, down from a rate of 2.4% at the end of last year.Mayor Andrew Ginther of Columbus, Ohio, said on Friday that tariffs could increase the median cost of a home by $21,000, making affordability more of an obstacle because building materials would cost more.White House trade adviser Peter Navarro told Fox News Sunday that the auto tariffs would raise $100 billion annually and the other tariffs would bring in about $600 billion per year, or about $6 trillion over 10 years. As a share of the economy, that would be the largest tax increase since World War II, according to Jessica Riedl, a senior fellow at the Manhattan Institute, a conservative think tank.Treasury Secretary Scott Bessent has suggested that tariffs would be a onetime price adjustment, rather than the start of an inflationary spiral. But Bessent’s conclusion rests on tariffs being brief or contained, rather than leading other countries to retaliate with their own tariffs or seeping into other sectors of the economy.“There is a chance tariffs on goods begin to filter through to the pricing of services,” said Samuel Rines, a strategist at WisdomTree. “Auto parts get move expensive, then auto repair gets more expensive, then auto insurance feels the pressure. While goods are the focus, tariffs could have a longer-term effect on inflation.” How are other nations thinking about the new tariffs? Most foreign leaders see the tariffs as destructive for the global economy, even if they are prepared to impose their own countermeasures.Canadian Prime Minister Mark Carney said Trump’s tariff threats had ended the partnership between his country and the United States, even as the president on Friday talked about his phone call with Carney in relatively positive terms. Canada already has announced retaliatory tariffs.French President Emmanuel Macron said the tariffs were “not coherent” and would mean “breaking value chains, creating inflation in the short term and destroying jobs. It’s not good for the American economy, nor for the European, Canadian, or Mexican economies.” Yet Macron said his nation would defend itself with the goal of dismantling the tariffs.Mexican President Claudia Sheinbaum has avoided the tit-for-tat responses on tariffs, but she sees it as critical to defend jobs in her country.The Chinese government said Trump’s tariffs would harm the global trading system and would not fix the economic challenges identified by Trump.“There are no winners in trade wars or tariff wars, and no country’s development and prosperity are achieved through imposing tariffs,” Foreign Ministry spokesperson Guo Jiakun said. How did Trump land on it being called ‘Liberation Day’? Based off Trump’s public statements, April 2 is at least the third “liberation day” that he has identified.At a rally last year in Nevada, he said the day of the presidential election, November 5, would be “Liberation Day in America.” He later gave his inauguration the same label, declaring in hisaddress: “For American citizens, January 20, 2025, is Liberation Day.”His repeated designation of the term is a sign of just how much importance Trump places on tariffs, an obsession of his since the 1980s. Dozens of other countries recognize their own form of liberation days to recognize events such as overcoming Nazi Germany or the end of a previous political regime deemed oppressive.Trump sees his tariffs as providing national redemption, but the slumping consumer confidence and stock market indicate that much of the public believes the U.S. economy will pay the price for his ambitions.“I don’t see anything positive about Liberation Day,” said Phillip Braun, a finance professor at Northwestern University’s Kellogg School of Management. “It’s going to hurt the U.S. economy. Other countries are going to retaliate.” Josh Boak, Associated Press
Category:
E-Commerce
More than a decade after Jessica Alba cofounded The Honest Company with a mission to deliver cleaner, healthier products for families, the brand faces new challenges in a shifting consumer landscape. CEO Carla Vernón joins Rapid Response to share how shes drawing on her experience at General Mills and Amazon to navigate shifting retail headwinds and reignite the brand. Vernón dives into the value of diversity as a business advantage, why patriotism takes on new meaning in todays landscape, and what it really takes to lead a mission-driven company amid uncertain times. This is an abridged transcript of an interview from Rapid Response, hosted by the former editor-in-chief of Fast Company Bob Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with todays top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. I notice a lot of uneasiness and uncertainty by business leaders about the environment that’s changing so fast. I’m curious whether you have a philosophy at all about how you approach the pace of change that’s around us right now. Well, one of the things that keeps me centered is that real classic line, “This too shall pass.” So, I’ve been in business long enough. As you know, I worked for 23 years at General Mills. I worked for two years at Amazon. And now, I’m a little over two years at The Honest Company. And I’ve seen enough business cycles to know that none of them are permanent. I’ve seen enough political cycles to know that none of them are permanent. So, that helps me because I know that even on the best days, that will change; even on the worst days, that will change. What I have to do these days is try to figure out how to lead other people through change and what things we react to quickly, what we react to slowly. And it’s a very interesting situation because I think there’s some of both that’s needed. Specifically, around the economy. We are trying to stay tuned to the principles of the change. I think if you know what you would need to do in either circumstance on either side of a change, then that’s what agility really is. We have the scenarios that help us manage when it’s time to act. I guess the challenges, or part of them at least right now, is that the Trump administration seems to go from one side to the other side on tariffs and other things. Its like almost on a daily basis. And so, it makes it harder to know what to hold on to. Preparation is the answer for that. For example at The Honest Company, we’re not new to dealing with tariffs. We’ve been dealing with tariffs for the last few administrations. There might have been tariffs of a different nature, but there was always uncertainty with whether a tariff will renew or it won’t. So, we really did work to set up a process. We’ve got this team inside that we call the tariff tacklers. And that team was already assembled in place. So, they know the levers and the strength at which you have to react. In years that are smooth and easy, maybe you don’t need as much flexibility. But the truth is, having been in as many business cycles as I have, there are always surprises in them. There are hills. The one thing that’s for sure is that you’re going to be surprised. When Jessica Alba cofounded The Honest Company, she was a pioneer in this, celebrities moving into entrepreneurship. Since then, The Honest Company has had struggles sometimes about controversy, about how clean its products are, some bumps in some of the direct-to-consumer brand. When you came on two years ago, the company had gone public, but the stock had been drifting downward from that point. Yes. That’s nice. That’s a gracious way to say it. What appealed to you about the opportunity in that moment? Well, Bob, I don’t know how many calls you’ve gotten to be a CEO of a public company, but I haven’t gotten that many, so that’ll get your attention. I knew about Honest through a few moments in my life. My kids have a godmother who’s on the younger side, and she was having a baby shower. This was about 2017. And at that baby shower, I saw the decorations for the shower included products from this brand. [Photo: The Honest Company] We are famous for these diaper cakes, which you take little diapers and you roll them up into little tubes and make layers of them so that they stack and look like a cake. And I’d never seen somebody believe the diaper was stylish enough to be part of the party decorations. And I’m a long-time brand builder. I have built many brands. I have tried to help resuscitate some brands. I was like, “Oh, this generation, they’re going somewhere different. They are picking a new brand.” I was a Pampers household, and that struck me. Then I forgot all about that. Eventually, I worked at Amazon where I ran what I like to call the center store categories, the everyday essentials. So, food, candy, beauty, baby products, household paper products, all of the cold medicines, all that health and wellness stuff. And I joined Amazon in the pandemic. We weren’t having meetings. But when we decided to get back to returning to meetings in person, The Honest Company was the first vendor we met with, and they left these free samples. At the time, I used to get free samples. Remember I was running the entire beauty collection for Amazon. And so, when I did eventually get that knock on the door and someone asked me if I would consider interviewing for CEO, here’s what I did know: I knew this was a brand for the next generation. I knew the products were amazing. And I could also see with my own eyes that the brand was not available. It was under distributed. A lot of people my age hadn’t heard of it. Those are the kinds of things that let me see, this is a gem that no one has just put the right magic dust on. There are things about The Honest Company brand that could be associated with progressiveness that might bring negative attention from some of the more aggressive MAGA community. I mean, I was talking about this with another CEO yesterday who isn’t trying to be political about anything, but finds himself drawn into these issues and debates that he doesn’t want to be a part of. How much do you worry about that? Does thathappen at all? The word honest means a lot of things to a lot of people these days. I feel that the word honest is still universally appreciated. There’s nothing that’s in question about a brand that is as transparent as possible and doing the best thing it can for any family that says, “I want products that are cleaner and that work for me and my kids or my household or my pet,” that’s not political, that’s not cultural. And that’s what Honest is focused on. The voice I have is a business voice, and I have a responsibility to shareholders. And I don’t run my business by fairytale. I don’t run it by what I wish was true. I run it by what the market shows is true. And the market shows that if we focus on solving that need better than any other brand, for those families that are trying to avoid chemicals that are concerning to them or products that irritate sensitive skin, then that allows us to be in the conversation at the table showing that leaders like us, teams like us, boards like us, deliver great results. If you are in the consumer space and you want to win with consumers, you should want to win with everybody. I don’t think progress is something that can be avoided. So, if progress is at the root of progressive, then sign me up, because I’m going forward. The consumer is going forward. And whether you like it or not, the world is going forward. One of the questions that comes up to me sometimes in this current climate is whether business can or should be part of the checks and balances that are in the American political and cultural system. I wonder if you have any thoughts about that because obviously as a CEO, your job is to deliver for shareholders and whatever will work at the marketplace to make your quarter and all those numbers. That doesn’t necessarily connect to higher, longer-term values that might be part of what these checks and balances are. And I don’t know if you’ve thought about this at all? Bob, you won’t find a more patriotic person than me. My children, when they used to get in trouble, one of the things I would do as a “punishment” is say, “Well, I have this little portable version of the Constitution. We’re going to have to sit outside and we’re going to read a portion together, and we’re going to discuss what it means.” That’s how nerdy I am about patriotism. And so, I will say, I believe the answer now, as in all times where great change was called for, is in community. And so, whether you ask me, “Do business leaders need to show up and be voicing the change, advocating their shareholder or their employee base?” Most certainly. A lot of times our employee base is just a makeup of the community we’re in, the region we’re in. But I also believe it’s not anyone. It’s not just our politicians. It’s not just our business leaders. Hey, man, the power is with the people. This is the United States of America. My mom took me to Washington, D.C., to march on the mall for the Equal Rights Amendment when I was seven. We drove from Buffalo, New York, in a station wagon because we thought we’re going to put our feet where our values are. Now, as a leader, I get a chance to put my voice where my values are. I get to create an employee climate. At The Honest Company, we made every single full-time employee a shareholder. That’s what I can do. That puts people in the economy. That puts people who never would get in the system like that in the system. But that’s also good for shareholders because you better believe that they’re more committed to making a great company because now they’re part owner of it. And I believe that is also patriotic: Enable the people, give them an opportunity to support their families and their communities. Let’s be together, in every corner of life. It takes all of us because this is the United States.
Category:
E-Commerce
Hello and welcome to Modern CEO! Im Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning. Uncertainty is at an all-time high. Business leadersmany of whom thought President Donald Trumps reelection would usher in tax cuts and deregulationare navigating on-again off-again tariffs, skittish investors, and growing risk of a recession. An index created by professors at Northwestern, Stanford, and the University of Chicago, shows global economic policy uncertaintynot knowing how policy decisions will affect business and marketsreached its highest level ever in January, surpassing the previous peak in May 2020, at the height of the COVID pandemic. Some CEOs and their teams privately have told Modern CEO that theyre pretty shaken by the degree and magnitude of chaos theyre experiencing, and an early March Chief Executive poll found CEO confidence has fallen to its lowest level since November 2012. Publicly, though, top executives insist that uncertainty is nothing newand indeed, surveys going back more than a decade consistently show that CEOs live with constant disruption. Modern CEO connected with 14 chief executives to get their best advice on how to manage in these unpredictable times. Heres what they had to say: Control what you can control, and communicate Chasing every emerging trend or reacting to external turmoil can make it more difficult to execute on your mission, says Christina Smolke, cofounder and CEO of pharmaceutical ingredient maker Antheia. In contrast, maintaining a clear vision, doubling down on core strengths, and resisting the pull of distraction enables long-term success. Ole Rosgaard, president and CEO of packaging company Greif, concurs: Our role is not to try and predict whats going to happen, but its to anchor our teams firmly in our purpose and our strategy. He adds: At times like these, when we have a lot of uncertainty, thats when clarity and connection with your employees, customers, and suppliers matter the most. Its important that you dont let people make up their own narrative. For leaders in the financial services space, communicating with customers is especially important when markets are rocky. As CEO, my focus has been on providing clarity and reassurance to both our team and ultimately, our customers, says Sarah Levy, CEO of digital investing company Betterment. At the end of the day, providing folks with access to strong financial toolswhether its helping them get invested early, save for retirement, or having trusted advisers to help set them up for strong financial futuresis my biggest priority. Success in any market environment starts with putting your customers first, says Darrel Hackett, president and CEO of BMO Bank. At BMO, we continually assess the market and deliver expert insights, helping our clients make sound decisions. Our commitment is rooted in ensuring our clients are prepared for whatever challenges lie ahead, with the clarity and resources to succeed. Marcin Kleczynski, CEO at internet security firm Malwarebytes, says leaders neednt hide nor sugarcoat potential problems when communicating with stakeholders. In cybersecurity, we often face rapidly evolving threats with unknown consequences, he says. When weve experienced a crisis situation in the past, I try to put myself into the shoes of my various stakeholderscustomers, employees, the general publicand communicate what I can, when I can. Instead of staying silent or downplaying challenges, I choose to be transparent and bring audiences along on the journey so that the broader community feels informed. Take care ofand engage your people Dave Guilmette, CEO of employee benefits administrator Alight, reminds leaders that it isnt enough to just communicate with employees. In times of uncertainty, we often talk about resiliency, but we also often overlook the human cost of what were asking employees to endure, he says. Leaders have a responsibility to create a culture of psychological safety and well-being through open dialogue, manager training, and real-time mental health support. During the 2008 financial crisis, architecture giant Gensler turned to employees to help chart a course when the firms business nearly dried up, says co-CEO Jordan Goldstein. Instead of closed-door meetings and putting together a recovery plan in a vacuum, we decided to convene everyone to do a large-format brainstorm on ways to rebound our business in a town hall setting, he says. The result? The organization learned the power of group problem-solving, and employees were motivated to implement the plans. In the months that followed, everyone leaned in because they felt invested and that they contributed to the strategies, Goldstein says. Lead with certaintyand play the long game Brian Melka, president and CEO of energy solutions company Rehlko, urges decisiveness. True leadership isnt tested when things are going wellits forged under the pressure of uncertainty, he says. The best leaders dont get lost in endless what-ifs; they focus on the present, solving problems in real time while relentlessly pursuing excellence.” Cameron Fowler, CEO of Early Warning Services, parent of digital payment service Zelle, says uncertainty can bring opportunities if companies are prepared to act quickly. Success comes from having a leadership team with unique experiences and varying strengths that complement each other. Fowler says. You also need to have people on your team that excel in steady times and those who can navigate uncertainty with confidence. Rick Smith, the cofounder and CEO of Taser maker Axon Enterprise, is embracing the built to last ethos that helped him grow the company. There have been a lot of learnings over the years, including playing the long game to achieve significant scale, moving fast without breaking things, using a culture of moonshots and mission focus to drive success, knowing when to pivot vs. push ahead when it comes to customer feedback, and building trust with stakeholders along the way, he says. Lean into data While leaders need to project an aura of confidence, they increasingly need to be backed by verified information and data. The CEOs were speaking with around the world are telling us that they need urgent support going further, faster, to address risk and people issues, says Greg Case, president and CEO of Aon, a professional services firm that provides risk-mitigation products. In this environment, data and analytics are key to surfacing actionable insights that leaders can use to create clarity amidst uncertainty and make better decisions for thir businesses, their people, and society. Don’t waste a crisis Leaders today also need perspective in order to see how the challenges we face can often be opportunities to grow, says Kristin Peck, CEO of animal health company Zoetis. That starts with listeningnot just internally, but to the world around us. I stay curious and seek out different viewpoints and external signals, especially from our customers and partners. She cites the avian flu outbreak as a moment for her company to rise to the challenge by pursuing innovation in vaccines and therapeutics. Susan Howe, CEO of the Weber Shandwick Collective, says she views uncertainty as an opportunity to build organizational resilience. She says the communications company is encouraging teams to anticipate their clients needs. Its fulfillingand productiveto be pointed in the direction of doing, while remaining grounded. She adds: “Today, I try to show up as I always do, fully present. Two rules: Never lose your sense of purpose. Or your sense of humor. Take a page from small businesses John Caplan, CEO of global payment platform Payoneer, exhorts leaders to channel their inner entrepreneur. The best leaders dont wait for clarity; they move forward with discipline and adaptability, he says. The small business owners and entrepreneurs we serve know this better than anyone. They wake up every day facing challenges, and they dont sit stillthey innovate, adjust, and push ahead. How are you leading now? What are your tips for leading amid uncertainty? Send your wisdom to me at stephaniemehta@mansueto.com. Id love to share your advice in a future newsletter. Read and watch more: Navigating uncertainty How to stop assuming the worst in a state of uncertainty Founders can leverage uncertainty for growth How I grew my business despite uncertainty Leading through uncertainty
Category:
E-Commerce
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