Planning around rising probabilities

Amid Tuesday’s torrent of tariff headlines, it was the Panama Canal one that got me to sit up.

It feels like an age ago that President Trump took China to task for what he said was its excessive influence over the key trade nexus. In the intervening six weeks or so, the topic rarely resurfaced—until Tuesday’s announcement that the Hong Kong-based owner of two key ports is selling a majority stake in those facilities for nearly $23 billion to a BlackRock-led consortium.

Business as usual, a company leader said—“purely commercial” and entirely the result of “a rapid, discrete but competitive process.”

You may not like the policy and/or the polemics of the president. But his process has repeatedly produced at least a portion of what he set out to achieve. Amid all the cacophony, it’s worth acknowledging—and planning around—the decent probability that significant elements of the Trump agenda will become reality.

— Geert De Lombaerde
 

A growing size advantage

To be fair, planning has become fiendishly tricky, which many executives have pointed out publicly. And that appears to be tilting the field toward large corporations that have more cash, more levers and more flexible footprints. This idea surfaced in a recent FTI Consulting survey of CFOs: 77% of finance leaders at firms with $5 billion or more in sales think they’ll grow their top lines by double digits this year. At businesses with revenues between $100 million and $1 billion, that number was about 67%—a drop of more than eight points from last year.

• TSMC will invest $100B to build U.S. fabrication plants, advanced packaging facilities and an R&D center

• Apple commits to building a server manufacturing plant in Houston

• Report: Tariffs mean the new Civic is heading to Indiana
 

"We are exploring moving manufacturing from the U.S.
to Asia to ship our products to Canada and Mexico,
due to potential retaliatory tariffs."

So wrote the president of an electronics equipment maker in responding to an IndustryWeek poll about the early days of Trump 2.0. Renewed or added cost pressures were a regular theme in readers’ comments.
 

Stocking up and speaking up

Since the fall, Corporate America’s reaction to tariff threats appears to largely have run along three tracks: Leaders have been beefing up inventories to get ahead of price increases. They’ve been telling customers to expect price hikes soon—Stanley Black & Decker CEO Don Allan said March 4 official word “will probably happen in the coming weeks.” And they’ve been lobbying hard in public and private for exemptions, which has worked for them in the past.

“We do want to influence the policy environment,” Eli Lilly CEO David Ricks said after announcing an investment spree that won’t hurt his case in D.C.

• Connecting Eli Lilly’s $27B U.S. manufacturing investment and the 2017 tax cuts

• Stellantis chair: Real tariff opportunity is in closing ‘loophole’ for cars without U.S. content

• Alcoa’s CEO says tariffs would decimate the aluminum sector, not protect it

 
Our new look

• A quick aside: You’ve no doubt noticed by now that this newsletter has a new format. We’ve been working on some ideas that go beyond simply listing headlines next to images. What are your first impressions? And what do you think is missing? Please fire feedback and ideas my way here.
 

$6 billion

General Motors’ new share buyback plan

Here’s another sign that scale means a lot—and can buy you time—in this turbulent environment. The repurchase authorization came a month after CEO Mary Barra and her team said they expect to shrink their EV losses by $2 billion this year compared to 2024.
 

What we’ll be watching—other than how long the tariffs might stay in place

Traton and Daimler, owners of the International and Freightliner truck brands, will report quarterly results and provide valuable views on a trucking sector that can do without tariffs as it works to get out of a prolonged rough patch. In addition, leaders from Honeywell, Rockwell and ITT are among those scheduled to speak at investment bank conferences; we’ll be listening/hoping for a little clarity about the industrial world’s investment and capex picture.

And who knows, maybe we’ll get another Panama Canal situation or two.