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Tariffs – We Are Doomed ... Maybe Not!

<img src="https://www.leanadvisors.com/images/tariffs.jpg" vspace="16"> <p>Tariff discussions over the past few months are now materializing, with some officials referring to it as a ‘trade war’. While it may not be a war, it would drastically alter the North American business environment. Businesses need to be proactive. They need to look at this tariff crisis or threat of tariffs as an opportunity/motivation to make immediate changes to their operations.</p>

Tariff

Larry Coté
Managing Director

Tariff discussions over the past few months are now materializing, with some officials referring to it as a ‘trade war’.  While it may not be a war, it would drastically alter the North American business environment.

The reaction has been confusion and fear throughout the business community, despite the elevated threat of tariffs being telegraphed and anticipated for quite some time.

Governments are attributing responsibility to each other, making it challenging to discern what is strategic posturing and what is genuine. Politicians are proposing different strategies to address the situation — some suggest retaliatory measures, while others advocate targeting specific markets, negotiating concessions, or beginning new negotiations. While the optimal solution from a political standpoint remains uncertain, it is evident that businesses cannot afford to be passive in this scenario.

Those who will be impacted the most by the proposed tariffs are the consumer, and business owners/managers/staff.  Entrepreneurs have limited control or influence over governmental decisions, nor the pace at which these decisions are, or are not, made.  The business community needs to consider their options to mitigate any potential negative impacts due to their limited decision-making power and take action promptly.

Waiting and hoping for a resolution, is not an option!

Businesses need to be proactive. They need to look at this tariff crisis or threat of tariffs as an opportunity/motivation to make immediate changes to their operations. From experience over the last couple decades, we know that most activities within a company/organization, fall into the category of ‘waste/non-value’ – usually more than 50%.  So, let’s start with examining what internal opportunity is there to improve and drive productivity and competitiveness.

The tariffs highlighted an existing problem: our operations are not efficient, which makes us less competitive. "Good enough" is no longer acceptable. Allowing others to set the standards leaves us exposed and vulnerable.

In accepting tariffs as a part of the new global landscape, companies can use this crisis to develop a vision and strategy that enhances efficiency. By focusing beyond the tariff threats, business can demonstrate resilience and take control of their future rather than being constantly under siege by the external forces.

Many companies became comfortable relying on the low dollar, or accepting the established economic state or trying to keep up with the baseline set by the competition.  This tends to drive complacency.  In the case of tariffs, we need to acknowledge the threat, but then quickly recognize that there will always be threats to business.   What is constant throughout all of these threats is the basic role of leadership.  This role hasn’t changed even as the type of threat changes.  Leadership must repeatedly continually) take their business, be it service or manufacturing, to the next level of profitability/service – provide quality service or product at a price your client is willing to pay, and at the quality and level of service demanded.

Maximize success, realize potential, and create a promising future. Take control.

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