CEOs must navigate an upside-down world, where tariffs are rampant and tobacco companies are palatable again

Take the recently announced U.S. tariffs on Chinese electric cars and computer chips. Even a decade ago, it was unthinkable that the U.S., the world’s economic superpower, would ever implement such draconian tariffs. Today, however, the Biden administration plans to slap Chinese EVs with a 102.5% import tax and hit Chinese solar cells and chips with a 50% levy.

The short-term domestic consequences for American car and chipmakers are positive, of course, as they will boost Made in America brands. But most U.S. multinationals also must consider their foreign markets. In the past, dominance in the U.S. market often led to competitiveness abroad, but long-term trade wars can dull that edge.  

Or consider which companies are considered “good” versus “bad.”

In the pre-COVID economy, tobacco, weapons, and oil and gas companies had some of the worst corporate reputations. Today, defense and energy are considered strategic assets in almost every Western society, making them “good” in the eyes of many. Suddenly, companies in these industries can move from defense to offense in their marketing and public engagement efforts. 

Even tobacco companies are no longer as universally shunned as they once were.

At a breakfast hosted by Philip Morris International that I attended in Geneva earlier this week, several business academics—one of whom was a paid PMI consultant—defended PMI and its new mission of “delivering a smoke-free future.” PMI’s IQOS electronic cigarettes create fewer negative externalities, they noted, and the company has an excellent ESG record. That gives PMI the standing to claim to be “better” than, say, a Big Tech company that peddles social media or charges high fees that reflect its monopoly, one of them said.

To be sure, not everyone is on board with this new world of business ethics. The World Health Organization, for example, continues to oppose tobacco companies for the continued harm their products cause. The World Economic Forum still shuns purely defense companies from its annual Davos confab (though it is welcoming aerospace firms, an industry on track to be worth as much as $1.8 trillion by 2035.) The World Trade Organization, meanwhile, still advocates for fewer tariffs.

But for most CEOs, now is a good time to reflect on what this revolution in business means for them. If some of what was good is now bad, and vice versa, it’s likely to alter at least some fundamental assumptions on which their businesses are based. 

More news below. 

Peter Vanham
peter.vanham@fortune.com
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TOP NEWS

Cruise settles 

GM-owned Cruise has settled with the pedestrian dragged by one of its self-driving cars last October, according to sources. The settlement is around $8 million to $12 million. The incident and resulting regulatory pressure spurred Cruise to take all its robotaxis off the road; it’s only now starting to test its self-driving cars again. Fortune

OpenAI loses its chief scientist

Ilya Sustkever, OpenAI’s chief scientist and one of the ChatGPT developer’s co-founders, is leaving the company. As a board member, Sustkever was closely involved in the brief ousting of Sam Altman as CEO last year; he quickly recanted his decision before Altman returned to lead the company. On Tuesday, Sustkever said he would now work on a “personally meaningful” project. Bloomberg

Vanguard’s new CEO

Salim Ramji, who used to lead BlackRock’s iShares and ETFs business, will be Vanguard’s new CEO, starting July 8. Ramji will be the first outsider to lead Vanguard since the money manager’s founding in 1975. Vanguard now manages about $9 trillion in assets. Financial Times

AROUND THE WATERCOOLER

Marathon Petroleum just named its first female CEO—and it’s showing a trend for the CFO as a C-suite powerplayer by Sheryl Estrada

Google unveils Project Astra chatbot tech and brings ‘AI overview’ to search for all U.S. users by Rachyl Jones

OpenAI’s marketing head shares the one big mistake CMOs are making with AI by Lila MacLellan

Amazon AWS CEO Adam Selipsky is out by Jason Del Rey

After vanquishing Trump in court, E. Jean Carroll urges women to focus on the presidential election by Ellie Austin

Tesla—which never buys ads—is buying ads to promote Elon Musk’s record $52 billion pay deal days before key shareholder vote by Christiaan Hetzner

This edition of CEO Daily was curated by Nicholas Gordon.