GeoLegal Weekly #62: Macro beats Micro
Businesses have been silent due to fears of retribution. But the tariff tantrum shows a macro crisis is more painful than anything that can happen directly to you.
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From Micro to Macro
A few weeks ago, I told the Wall Street Journal “There’s an overriding sense of helplessness…CEOs are feeling stunned, and they’re not used to feeling like they don’t have good moves.” This is even more true after Trump’s "Liberation Day” tariffs and partial reversal under score that the the direction of the global economy hangs on one man’s political moves.
CEOs are generally remaining silent about politics to avoid getting their heads chopped off by the White House. It took a record market plunge and the very likely prospect of a self-inflicted recession for the calculus to shift even a little. Suddenly, leaders are waking up to the fact that even painful micro retaliations are likely to be cheaper than a macro crisis. After all, a $1mn donation to the White House or even a “settlement” of tens of millions of dollars is a lot cheaper than 15% off your stock price from a tariff-induced stock market meltdown.
Which is not to say people should be paying off the White House. It is to say that businesses need to spend more time worrying about a macro crisis than staying silent to protect themselves.
Silent for Too Long
Businesses just paid the price of looking the other way as the tariffs came into focus. Some CEOs strongly support the Republican agenda of lower taxes, deregulation and smaller government, so they tried to ignore the very clear campaign promises Trump made about imposing wide ranging tariffs and the on-again off-again tariffs he clearly wanted to impose on Mexico and Canada. Others have been trying to cozy up to the president to avoid ending up in political cross-hairs. And yet more have simply been paralyzed into silence, unsure which way to maneuver.
The loss of the business community as a participant in public policy debates is a painful one. As CEOs have remained silent or flirted with becoming sycophants, the White House was allowed to believe what it wants. That means it can believe that dangerous experiments with the economy are acceptable if they can be reversed, or even beneficial if they gain foreign policy leverage.
Volatility is a killer so it is not the case that the tariff reversal moves us back to the status quo ante. Businesses cannot make long-term investments without clarity. Consumers feel poorer when they are subjected to weeks of press about how goods are going to be more expensive. Some businesses began cutting costs aggressively and shifting suppliers because the tariffs seemed here to stay. The sense that the president can flipantly crash markets and then just (mostly) reverse himself a week later with virtually no telegraphing of policy to the business community is without precedent and is unlikely to be forgotten for the remainder of Trump’s term.
And, of course, Trump has only suspended tariffs for 90 days while further increasing tariffs on the US’s key trading partner, China. So we continue to pay vastly more for everything that comes from China and live with the tariffs of Damocles hanging over our head for everything else for the next three months. In any other political era, that alone would cause a persistent panic.
From Silence to Whispers
What happened ahead of Trump’s reversal? Without claiming causation per se, over the past week, corporate America began to find a voice. A (very) few examples:
Bill Ackman, CEO of Pershing Square Capital Management, warned that the tariffs could lead to an “economic nuclear war” and called for a 90-day pause to allow for negotiations.
Jamie Dimon, the CEO of JPMorgan Chase, wrote in his annual shareholder letter that the tariffs could lead to higher inflation and risked pushing the US economy into recession.
Even Elan Musk criticized the tariffs and called for the US and Europe to create a “zero-tariff” policy.
Delta and Walmart withdrew their forward guidance due to uncertainty around tariffs.
There were a few others in finance who also expressed worry about the impact of tariffs, but the truth is that at best this remains a fairly short list. Still, it is a longer list than a month ago. Add in some GOP senators and representatives already worried about the 2026 midterms and suddenly the administration is hearing dissent from inside the house.
Fighting Back
So how do you navigate this dynamic?
I have long held that businesses should talk less and smile more, meaning that getting pulled into culture wars is not a recipe for success. However, talking less is not the same as being silent. When policies existentially threaten your business, you need to speak up.
There are constructive ways to do this. One of them is to emphasize to the White House that while you may support their direction of travel on fairer trade agreements, the transition period needs to be sufficient for your business to not crash out. It means reminding members of Congress that if they stand by while your stock collapses, you are not going to have much money to donate to them, nor would you want to.
But it also means activating your industry groups to do more and to do more–and to do it forcefully. Business groups are most comfortable lobbying on small stuff - greasing some palms with campaign support promises to get a specific tax break. But nobody cares about a tax break when their business is about to get tariff-clobbered to death.
I told as much to Fortune’s CEO daily earlier this week. “You need to force your industry groups to take a much more combative position than they want to do if you’re afraid to do it yourself,”I told Diane Brady. “Industry groups are no longer just about kind of quietly slowing down policymaking. They can be a vehicle for safety in numbers.”
Hours later, the US Chamber of Commerce threatened to sue Trump over the tariffs, which would have been the first time in half a decade that the Chamber sued Republican-controlled Washington. The message is starting to get through.
-SW & DB
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