It’s the economic story that won’t go away: tariffs. In the last week alone, the Trump administration has threatened new taxes on imports from Mexico, Canada, and Russia, while still negotiating the aggressive rates announced in April with countries around the globe.

The ultimate result of these dramatic trade actions seems impossible to predict. But that doesn’t mean that leaders should sit and wait for certainty, says Kellogg’s Sunil Chopra.

Plus, should CEOs also be commercial stars?

Options, not ostriches

For many companies, the constantly shifting tariff news brings a certain sense of déjà vu. Just as global trade networks were returning to normal after the supply-chain shock of Covid, the new taxes are shaking up the system once again.

Some companies responded to Covid—and tariffs levied against China during the first Trump administration—by diversifying their supply-chain options, giving them alternatives that may keep costs from soaring.

But others are still being too cautious, says Chopra, a professor of operations at the Kellogg School.

“Most companies are going to take a wait-and-see approach,” Chopra says. “But to me, ‘wait’ doesn’t mean ‘do nothing.’ Wait means looking for optionality—which, if you didn’t build it earlier, now there is another reason to think about building optionality.”

The current situation is also different from Covid in that the effects will not be uniform across the globe, Chopra says. While U.S. tariffs are unlikely to return to pre-Trump levels any time soon, the tariffs between non-U.S. countries will keep going down, he predicts.

“Even with the tariffs, the math doesn’t change,” he says. “So don’t let tariffs be the sole driver. Think of them as an additional risk and say, ‘Given these risks, is it worth having more optionality than we currently have?’”

Read more at Kellogg Insight.

When the star is the CEO

Many companies are asking their executives to take on a new job responsibility: commercial acting. Ad Age highlighted recent advertising campaigns from Ram and Red Lobster that put their leaders in front of the camera to deliver messages directly to customers.

It’s a move that dates back to decades ago with Chrysler CEO Lee Iacocca pitching cars or Wendy’s Dave Thomas selling burgers. And with social media adding a slew of new avenues for publicity, CEO charisma can be a valuable asset.

“Putting in the CEO can add real authenticity to a brand,” says Tim Calkins, a clinical professor of marketing at the Kellogg School. “Red Lobster’s CEO is an element of surprise because he comes across as innovative and young.”

The strategy comes with risk, especially at a time when the high visibility of prominent business leaders such as Elon Musk and Mark Zuckerberg can provoke mixed responses in consumers.

“I’m not sure that all CEOs want that role,” Calkins says. “Having to balance company success and then also choosing to publicly put yourself in front of people isn’t for everyone.”

Read more in Ad Age.

See you next time,

Rob Mitchum, editor in chief
Kellogg Insight