President, Global Industrial Market
This Week in Leadership (Nov 22 - Nov 28)
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As the fallout settles from the White House’s order to levy tariffs on steel and aluminum imports, it’s left to corporate—not just government leaders—to do some fast maneuvering.
The order, signed Thursday, has already shifted from its original announcement, with President Trump now saying some countries are exempt, or the tariffs changed otherwise, should talks over the North American Free Trade Agreement change. But in the meantime, the European Union has threatened to hit back with taxes on blue jeans and bourbon, both quintessentially American products, prompting the US president to up the ante with promises of possible taxes on European automobiles.
Experts say the C-suite can only leave trade wars up to the politicians, and to focus on fine-tuning a key leadership skill: agility, all too commonly needed in this age of such fast change. “This is not the first time in which Europe finds itself in this situation or that another country has tried to impose tariffs,” says Yannick Binvel, president for Global Industrial Markets for Korn Ferry. “It happened with aviation and it hasn’t impacted Airbus at all.” When Airbus, the EU’s dominant commercial aircraft manufacturer, ran into a trade spat with the US over EU subsidies, executives decided to relocate part of the plane-making process to the US to integrate Airbus with the American economy. The Mobile, Alabama, plant officially opened in 2015, tying employment in the state to the success of the company.
What’s more, context matters too in any industry. “Politicians are going to react because they have to react,” he says. “I would be a leader of a steel company and smile.” After all, the EU only accounts for 10% of the $29 billion of steel that the US imports, or around $3 billion. All leaders have to be prepared to react when necessary, but that doesn’t mean they have to fight every battle, says Binvel. The short takeaway is that many unfair acts are not material to the bottom line and should probably be put aside.
Patience and focus are something to learn also, says Peter Duffy, Korn Ferry’s principal in London for the Global Industrial and Natural Resources sectors. “The leaders in the metals industry are thinking fifty years ahead,” he says. “I think they’ll look at this tariff situation and say that at worst there are only another seven years left” for the current administration. It isn’t that changes in trade rules don’t affect metals producers, but the executives usually have little impact on how the policies are made. “They focus on the things that they control,” says Duffy.