Inside CEOs’ Trump tariff war rooms

It’s war. At least that’s how it feels to CEOs who are trying to navigate a confusing and chaotic environment where President Trump’s tariffs—if enacted—stand to dramatically impact their businesses. 

The most “front-footed” companies have set up tariff war rooms to game out scenarios, David Garfield, co-CEO of consulting firm AlixPartners, told me in a recent conversation. This involves creating financial models and “a decision-making framework and process that gets sustained,” he explained. War rooms are not a place, nor a one-and-done meeting, but a working group that comes together regularly, pulling the appropriate C-suite executives and company leaders into focused conversations. (The executive sponsors of these “rooms” are usually CFOs or COOs.)

Tariff war rooms make it possible for companies to measure any number of outcomes from imposed tariffs, looking at what happens when a new tariff is higher or lower, or lasts longer than anticipated, or how a duty could trigger currency value changes or other economic policy shifts.

Once companies have collected data for various hypothetical situations, they can begin debating their options for how—or whether—to respond. For example, Garfield said, if a company knows it makes products more cheaply than competitors who will face the same tariffs, it might choose to absorb the extra cost of the levy to guard their market share. Or, perhaps it will exploit its price advantage, pass the tariff cost to customers, and maintain its margins. “It’s a very interesting strategic choice to make,” Garfield told me.  

Leaders of multinational businesses know that the number of variables that could enter the picture in a multi-front trade war seems infinite. As Garfield noted, building a playbook means making many small but consequential decisions. His firm has found that some companies jumped in early to begin weighing their options. You can’t change your operations overnight, he said, but “you need to be as prepared, as forward-thinking, and as resilient and responsive as possible.”  

More news below.

Top news

25% tariffs on steel. President Trump will today announce 25% tariffs on all imported steel and aluminum. The taxes will affect Canada and Mexico as well as China, Brazil and South Korea.

Trump also posted, without comment, a story by CNBC headlined “Putin says Europe will ‘stand at the feet of the master’ as Trump’s tariffs alarm allies.”

Canadian prime minister Justin Trudeau apparently takes it seriously when Trump talks about making his country the 51st State of the Union. And Trump let him know he knows that by posting a story about it on his social media.

Trump on Treasuries: “There could be a problem, you’ve been reading about that, with Treasuries,” Trump told reporters on Air Force One. ““That could be an interesting problem because it could be that a lot of those things don’t count … Therefore maybe we have less debt than we thought of.” Context: As the FT points out, Trump suggesting the U.S. might be able to default on its bond commitments would be seismic.

ARM CEO Rene Haas thinks the hype around DeepSeek is overdone. “The canary in the coal mine to look at is when [tech bosses] Satya Nadella or Sundar [Pichai] or [Mark] Zuckerberg say, ‘You know that $80bn of capex I said I was going to do? I think I’m going to cut that by two-thirds.’ That’s what you need to look for.”

DOGE and national security. Some people are worrying that Elon Musk’s team of young guns may be usable as attack vectors by hostile actors. Per Axios: “Wired reported that one member has connections to a Telegram-based cyberattack-for-hire service. That same person was also fired from a cybersecurity internship for disclosing company secrets to a competitor, Bloomberg reported Friday.”

From Fortune

MicroStrategy’s market value defies logic, skeptics say.
The company’s market cap stands at just under double the value of its Bitcoin holdings’ market value, or its net asset value (NAV), and that gap is difficult to explain, Carnegie Mellon University finance professor Bryan Routledge told Fortune. “There’s no rational explanation for that difference.”

Ackman causes Uber stock jump
Uber stock jumped nearly 7% on Friday after billionaire investor Bill Ackman revealed in an X post that his firm, Pershing Square Holdings, owns about $2.3 billion worth of Uber’s shares. “We believe that Uber is one of the best managed and highest quality businesses in the world,” Ackman also wrote. Fortune

Workday lays off employees to bring in AI
Workday CEO Carl Eschenbach sent a memo to employees of the workplace management platform last week announcing that 1,750 employees would be laid off in the interest of “prioritizing innovation investments like AI.” Other large companies like Salesforce and Klarna have moved toward replacing a portion of their staffers with AI. Fortune

Trump is unhappy with neighbors’ tariff response
President Donald Trump described Mexico and Canada’s response to his tariffs as “not good enough” in an interview with Fox News on Sunday. The tariffs were paused for 30 days last Monday after both countries agreed to bolster security on their borders with America. Fortune

The markets

• The S&P 500 closed down nearly 1% on Friday at 6,025.99 but Europe and Asian markets are largely up this morning. US futures were up 0.4% this morning before the opening bell. Bitcoin was up at $97K.

From the analysts

• EY on employment: “... we expect job growth to slow below trend this year and see the unemployment rate rising towards 4.4%. To be sure, trade policy will likely be the biggest wildcard for 2025,” per Lydia Boussour.
• UBS on Trump: “US President Trump’s deportation program does not seem to expand that of US President Biden’s. The key difference is publicity, fuelling fear. If agricultural workers fear ICE agents and a Fox News crew raiding their farm, they may not show up for work. Fewer workers and disrupted work schedules push up food prices. That leads to fear of inflation for consumers, changing their behavior,” per Paul Donovan.
• Goldman Sachs on Q4 earnings calls: Three big themes emerged, per David Kostin et al. “(1) managements discussed how tariffs affect their businesses; (2) companies discussed the recent strength of the US Dollar and the impact it had on their earnings; and (3) companies continued to discuss the impact of AI on their businesses.”
• Convera on the dollar: “the Trump administration lacks a clear consensus on the direction of the US currency. The dollar has risen around 4% since the November election, similar to its trend after the 2016 election. However, DXY remains about 6% below its 20-year highs from 2022. A return to those levels may require clear trade escalation and global inflation signs; otherwise, the currency will remain within a 3% range from current levels,” per Boris Kovacevic.
• JP Morgan on Amazon: “$100B+ Capex Supports AI Ambitions … Amazon views GenAI as the largest opportunity since cloud & the biggest tech shift since the Internet, w/virtually every app likely to infuse GenAI and most companies utilizing agents over time,” per Doug Anmuth and Bryan Smilek.

Around the watercooler