Update on Strategic Futures in a World of Tariffs: What Executives Must Prepare For…

BY: GIDEON MALHERBE
FOUNDING PARTNER & CHIEF STRATEGIST

In May, we initiated a Trump Tariff Scenario project, which resulted in many impactful executive meetings and discussions. We are tracking economic developments using two axes: the Trump Administration retaining the initiative in reprioritizing global trade (to reduce U.S. trade deficits) and the extent to which international trade rules hold or disintegrate.

The potential outcomes of any of the four scenarios have wide-ranging implications for business. In this June update, you will find a top-line executive update. We chose not to include the more operational implications as they vary from industry to industry, but they are available for those interested.

What Shifted this Month?

• Policy Roulette → ∆ Stable, but noisy. Executive sourcing mandates raise compliance flags.

• Empowered Blocs ↑ Rising confidence. BRICS+ expansion and RCEP alignment deepen quietly. Many trade arrangements work to reduce internal trade friction and seek to find expanded markets for their products.

• Titans Clash → ∆ Sustained standoff, semiconductor and rare earth escalation in motion with many additional levers on both sides in play. This includes using the Chinese RMB in cross-border settlements and selling U.S. TikTok.

• Age of Chaos ↓ Muted. No major shocks this cycle, but risk floor remains elevated. U.S. involvement in Iran may escalate this scenario.

Scenario Signal Pulse Tracker

1. Insight:
“While U.S. Volatility dominates headlines, quiet momentum is building across non-Western trade alliances. Look east for predictability.”

2. Risk to Watch:
ESG divergence between U.S. and E.U. frameworks may split compliance regimes, driving cost duplication.

3. Leadership Question:
How fast can our supply chain and financing models pivot if our core markets fracture into opposing blocs?