Dealing with reliable uncertainty

If you thought the situation with global tariffs had stabilised, think again. The headaches and bouts of uncertainty returned this week, courtesy of US president Donald Trump. This is, of course, particularly worrying if you are a UK firm that exports to the States. But the ramifications go much further.

President Trump suffered humiliation when the Supreme Court struck down his import tariffs on Friday. But he immediately doubled down the following day. He announced a new executive order for 15 per cent global tariffs. Despite this threat, a level of 10 per cent officially kicked in from Tuesday but uncertainty lingers.

“The 40,000 UK companies exporting goods to the US will be dismayed at this latest turn of events,” said William Bain, head of trade policy at the British Chambers of Commerce. “We had feared that the president’s ‘Plan B’ response could be worse for British businesses and so it is proving.”

Tariff policy chaos is damaging because it disrupts export strategies and supply chain planning. The turmoil over US tariffs has already affected the strategies of many UK-based businesses.

Specialist bike-maker Brompton folded its shops in New York and Washington last year, for example, while opening a store in Shenzhen, China. It cited US tariff uncertainty as the reason.

Brompton makes its bikes in west London. But other companies manufacture whole product lines and export into the US. In response to Trump’s first tariff announcements, many had started to diversify their established production lines to other Asian territories like Vietnam, Thailand or India, which takes time and money.

I know from speaking to Business Leader members at our regular events that global tariff instability is an issue of great concern to those affected.

I had a chat with our member Richard North of WOW! Stuff, who is a highly respected voice in the toy industry, when the 15 per cent tariff rate was originally announced.

“We are left with huge uncertainty!” he says. “Does the toy industry lower prices, assuming the tariff charges will be lowered after 150 days and thus for the trading year ahead, with the hope of gaining back business we lost from many retail customers who delisted last year?

“Or does the toy industry hold newly increased prices, believing the Administration will succeed and high tariffs will remain in the long term? This level of uncertainty is bad for business. It’s bad for companies that need to set budgets at least 12 months in advance and are in a quandary of what to charge for their toys.”

His toys are in the premium range so his company has managed to increase revenues during the uncertainty, he says, but he fears for the “bread and butter toy makers”, which account for so much of sales.

Trump’s tariff tactics on the global stage are making pricing a nightmare for businesses and pricing in the long run has a direct effect on consumers too...

Closer to home, Ben Askins was our guest on the Business Leader Podcast this week. He is the co-founder of Gaia, a green technology company that builds online tools for companies within the environmental space. He cut his teeth as an entrepreneur by creating a digital marketing business for luxury brands, which he scaled and successfully exited.

Askins shares practical advice on interview techniques to hire the best candidates, building an engaged and happy workforce and how to scale a start-up with a future exit in mind.

The part of this interview that particularly stood out comes about halfway in. Askins outlines his thoughts on hiring and shares some specific tips for running the interview process. I’m especially interested in this because at Business Leader we are hiring at the moment and I’ve had some involvement in the process.

Hiring is, of course, fundamental to the success of any business. It’s the DNA of your company. Askins advises, for example, not to surprise candidates with fancy questions designed to make you think on the spot. ‘How many windows do you estimate there are in Japan?’, you know the kind of thing.

Yes, they can show the way you approach problem-solving but they are not a realistic scenario in business. Far better to give people time to prepare.

Once you’ve whittled down your main candidates, pay them to come in and do a detailed exercise. This might involve looking at your P&L, interviewing colleagues or working on a real-life case report. That’s how you test people’s mettle in a realistic way (with a realistic deadline) and find the kind of people you want to work with.

🎧 Watch and listen to the full interview below or wherever you get your podcasts.

Guess the year

• One in 10 companies set up this year went into liquidation
• The mobile network BT Cellnet changes its name to O2
• TDR Capital, Loungers and Skyscanner were founded in this year
• BBC 6 Music, the first new BBC Radio station in decades, is launched
• Euro banknotes and coins become legal tender in twelve of the European Union's member states

You'll find the answer at the bottom of this page

What happened this week?

1. British household bills are set to fall after the government recategorised certain subsidy charges and axed an energy efficiency scheme, bringing the energy price cap lower. Ofgem, the energy regulator, has lowered the cap by 7 per cent for the April to June period.

2. UK-based self-driving start-up Wayve has raised $1.2bn (£886m) in new funding from investors, as it gears up to launch its first robotaxi service in London later this year. The deal values London-based Wayve at $8.6bn (£6.3bn). The news comes in the same week that challenger Allica Bank has become Europe’s newest dollar unicorn after raising a $155m (£84.9m) Series D funding round, which gave Allica a $1.2bn (£886m) price tag.

3. The UK’s human resources sector is twice the size of the EU’s and has led to firms misallocating as much as £10bn in capital, new research from Policy Exchange has suggested. A paper on the cost of diversity and equality agendas on businesses has argued that HR departments have grown at a disproportionate rate, with the UK having one of the highest shares of people employed in HR anywhere in the world.

4. Chip giant Nvidia has reported record annual revenue of £159.1bn. The firm also beat analysts' forecasts as sales for the last three months of its financial year jumped by 73% compared to 12 months earlier. Nvidia is the world's most valuable publicly-traded company, with a stock market value of around $4.8tn (£3.5tn).

5. The NHS in England will be set targets on getting people back to work, as ministers plan to link patient data to employment status and benefits claims to assess how much the health service boosts the economy. Ministers hope to use the NHS to reduce Britain’s rising sickness benefit bill and deal with a post-pandemic high of 2.8 million people out of work through long-term illness.

Weekend reading

🫧 ‘People are doing dumb things’, says Jamie Dimon amid fears of AI bubble

Investors around the world have been scrambling to diversify their portfolios with AI antithetical stocks amid a feared bubble around the game-changing tech. JP Morgan Chase chief Jamie Dimon has warned that lenders are doing “dumb things”, akin to a pre-2008 financial crisis environment.

💰 Inside Miami’s Billionaire Bunker, a manmade island for the .01 per cent

Where do billionaires go to avoid the riff-raff that makes up the 99.99 per cent of the world's population? Fortune has profiled Miami’s most coveted waterfront neighborhood aka Billionaire Bunker, the 300-acre, manmade strip of land north of Miami Beach that has attracted residents that include Jeff Bezos, Mark Zuckerberg and former NFL quarterback Tom Brady.

And finally

What is your favourite way to travel? I love the romance of overnight trains. My favourite journeys that I’ve taken are London to Fort William in Scotland and Paris to Briançon in the southern French Alps.

But what if instead of falling asleep to the clackety-clack of the railway line, you fell into a slumber with the hum of the motorway and occasional glare of passing headlights? Twiliner has just launched a luxury night bus service, with aeroplane-style fold-flat beds. It connects cities in the Netherlands, Spain and Switzerland.

It’s £143 to travel one way from Amsterdam to Zurich, for example, an overnight trip with two stops. The coach has 21 seats and bathrooms that look much better than the ones you usually see on coaches! It also has vending machines, free Wi-Fi and changing rooms, so you can get into your pyjamas.

You don’t have the privacy of a separate compartment. Interestingly, the seats are designed so you can lie down while also keeping on your safety belt.

The economic logic is that you save on one night’s accommodation and you skip the faff of airport transfers.

Could this take off in the UK? I’d give it a try.

The answer to our question is 2002.