USA factory isolated
Project 2025’s Mandate for Leadership is the roadmap for this administration and signals that corporate leaders must act to safeguard their companies and employees from dangerous policy shifts. Protectionist tariffs, promoted as a path to American prosperity in the Heritage Foundation’s plan, have historically led to destabilization, job losses, and deep economic pain. Without careful planning, today’s executives may find themselves presiding over a slow-motion corporate collapse.
Project 2025’s Tariff Agenda: Economic Nationalism Rebranded
The Mandate for Leadership explicitly advocates for a sweeping repatriation of American production and heavy tariffs on foreign goods. This philosophy is rooted in economic nationalism — the belief that domestic self-sufficiency is paramount, even at the expense of global integration and efficiency.
However, history warns against this path. Pursuing self-sufficiency has led to economic collapse in nations like Venezuela, North Korea, and Argentina. These economies, once vibrant, deteriorated under the weight of protectionist policies and authoritarian rule. Ironically, many of these leaders have been publicly admired by former President Trump, who has expressed praise for autocrats embracing nationalist economic models. If the United States mirrors their strategies under centralized, dictatorial leadership, it risks replicating their failures: declining productivity, inflation, scarcity, and widespread hardship.
Lessons from Smoot-Hawley: History Repeats Itself
The dangers of protectionism are not theoretical. In 1930, the Smoot-Hawley Tariff Act raised U.S. tariffs to historic highs (approx. 59%) in a misguided attempt to protect domestic jobs during an economic downturn. Instead, it provoked international retaliation by more than 25 countries, collapsed global trade by more than 60% between 1929 and 1934, and deepened the Great Depression. Rather than shielding American workers, it triggered massive layoffs and prolonged suffering.
Project 2025’s tariff proposals mirror the mistakes of Smoot-Hawley. They impose sudden, sweeping barriers without building the necessary domestic infrastructure to absorb production shifts. American companies will not have time to retool supply chains, retrain workers, or scale manufacturing. Imposing tariffs without strategic planning or transition periods forces businesses into chaos, not orderly reshoring — a reckless approach that risks mass disruption across industries.
The Triple Threat: Governance, Finance, and Human Capital at Risk
The effects of these tariffs will cascade across the corporate ecosystem:
- Corporate Governance: Board members will face heightened legal risks as shareholders question leadership’s failure to anticipate supply chain shocks or profit declines. Lawsuits tied to failure of fiduciary duty — already on the rise during past trade wars — could surge again.
- Finance: Companies will confront shrinking profit margins as tariff-induced costs hit bottom lines. Past examples, like U.S. agriculture during the 2018-2019 trade wars, show that retaliatory tariffs abroad can wipe out entire revenue streams almost overnight. Access to global capital markets may also tighten if instability persists.
- Human Capital: HR leaders will grapple with layoffs, retention crises, and surging demands for reskilling. Industries like manufacturing, retail, and agriculture — heavily exposed to global supply chains — are especially vulnerable. In addition, immigration restrictions proposed under Project 2025 will limit access to critical talent pools just as domestic labor shortages worsen.
Tariffs don't just impact employees at work — they also harm them as consumers. Inflation driven by higher import costs will erode purchasing power. Employees losing jobs because companies will lay off workers to off-set the expense of tariffs will also mean fewer customers buying goods and services, creating a vicious cycle that depresses both corporate revenues and economic growth.
The False Promise: No Evidence Tariffs Will Remake America
Despite political rhetoric, there is no credible economic evidence that broad-based tariffs will successfully reindustrialize the U.S. economy. According to Goldman Sachs, protectionism primarily leads to higher prices, cronyism, and inefficiency — not competitive manufacturing. Recent studies show that previous tariffs under the Trump administration led to net job losses in key industries and raised costs for American businesses and consumers.
Rather than revitalizing American production, tariffs without adequate industrial policy and infrastructure investment risk isolating the U.S. economy, reducing innovation, and stifling growth. Tariffs are a blunt instrument, not a strategy.
What Companies Must Do to Protect Sustainability and Their Employees
In this climate of uncertainty, corporate leaders must act decisively:
- Champion Employee Stability: Retaining and protecting employees now is critical to maintaining organizational strength and future recovery potential.
- Invest in Workforce Resilience: Upskilling and cross-training employees can help organizations pivot faster.
- Diversify Supply Chains: Reducing reliance on any one country or region will help buffer shocks.
- Strengthen Financial Buffers: Companies should prepare for inflationary pressure and revenue volatility.
- Reinforce Governance and Risk Management: Boards must incorporate tariff and geopolitical risks into enterprise risk oversight.
As I have discussed previously in my columns on Project 2025, the blueprint systematically dismantles the pillars of a stable economy. Tariffs are simply the next wave in a broader project that prioritizes political goals over economic realities.
Conclusion: Leadership in an Era of Manufactured Chaos
Protectionism cloaked in patriotism is still protectionism — and history has shown its dangers time and again. Corporate leaders must not be lulled into complacency. The risks to governance, finance, and human capital are real and mounting.