Tariffs: The Great Hesitation, the Long Nights

It was another marathon week for the leadership team. As the courts argued over the legality of tariffs, supply-chain teams were pulling all-nighters updating scenario plans based on the legal rulings. Finance teams were monitoring wild swings in the company’s stock based on a new tariff philosophy taking hold among traders and closely watching the first meeting between the president and the Treasury secretary to adjust financial models. Even now, legal and HR teams are still underwater trying to catch up with new regulations and compliance.

The headaches tariffs are causing for leaders are turning out to go far beyond finance; they’re creating an unprecedented hesitancy in decision-making that, in turn, is further taxing managers and functional leaders—and firms overall—in way that worries experts. To be sure, not unlike many traders and analysts, many leaders have come to believe that tariffs are at best a negotiating tool that will get walked back and at worst a mounting distraction, says Justin Ripley, a senior client partner and member of the Global Industrial practice at Korn Ferry. “But industrials still have to plan and prepare like they will come to fruition,” he says. Boards and CEOs, aware of the heightened pressure they are under, are demanding action plans on commercial and operational strategies that account for a full range of scenarios around tariffs.

All of which creates some huge challenges: Do firms restart manufacturing plants in key supply-chain areas now that the court blocked tariffs? Do they believe the appeals court ruling to stay that decision will hold up? It’s that kind of uncertainty that is still keeping most firms on the sidelines when it comes to large-scale investments or big strategic moves, says Meredith Moot, a senior client partner in the logistics, distribution, and transportation sectors of the Global Industrial practice at Korn Ferry. “The mantra is the bigger the investment, the longer the pause,” she says.

Experts say smart leaders are trying not to focus too much on the daily headlines, concentrating instead on the top two or three strategic priorities for the year and deciphering which challenges to address against those. For some firms, it may be preserving liquidity. For others, it may be protecting supply-chain vendors. Experts also caution not to look at tariffs in isolation, but rather in terms of how they intersect with other issues a firm is facing. Leaders must also recognize that clarity around tariffs may never come, or it may take a long time to arrive. Most agile firms can overcome a bad decision; it’s the firms that standstill that suffer the most.

Still, in today’s environment, it’s not surprising many leaders are cautious about moving forward with major capital allocations outside of AI. Mergers and acquisitions in the US, for example, fell 13% in the first quarter, belying expectations that 2025 would be a rebound year for deals. Some firms have cancelled or suspended construction of new manufacturing plants or data centers citing tariff uncertainty. Layoffs are again taking place across industries as well. The goal is to preserve liquidity and contain costs as part of a “hope for the best, prepare for the worst” strategy around tariffs, says Ripley.

Most worrisome, tariffs seem to create distractions that companies find hard to ignore. Managers and people in functional areas like supply chain or corporate development are being tasked with running all kinds of scenarios to analyze the impact of tariffs, which takes them away from their core roles. “The uncertainty is taking team concentration away from things they should otherwise be focusing on,” says Moot. That’s a major enterprise risk as well, as firms could fall behind with their core strategic objectives, or they could become obsolete by the time there is clarity on tariffs. Or, as Ripley puts it, “To many, [tariffs] are a frustrating and time-consuming issue to navigate, especially because there are significant gray areas that appear to be open to some interpretation.”

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