Turning red tape into red carpet

Paul Gestro

‘Survive until 25’ feels like a distant memory – from a time before tariffs changed the trajectory of the year and created fresh uncertainty.

For a small, open economy so dependent on global markets, the knock-on effect of tariffs is significant – raising compliance costs and disrupting supply chains. For businesses, this means adapting to new challenges and opportunities to navigate these turbulent waters.

This month, ASB, in partnership with the Institute of Directors, hosted an event series across New Zealand focusing on the critical interplay between boards and executive management in addressing the impact of tariffs and geopolitics.

The event followed research by ASB and Talbot Mills in May surveying around 300 businesses, to gauge how New Zealand was reacting to the universal tariff announcement in April.

Two things stood out. Almost 40% of respondents thought the proposed tariffs would have a more profound economic impact than Covid-19 or the Global Financial Crisis, yet only 10% of all businesses and 14% of exporters had taken action, such as raising prices, shifting markets or cutting costs.

A few months on, we sat down with around 300 business leaders across the regions to discuss the impact of this volatile economic environment. Here are my top five takeaways:

1. Don’t jump at every shadow

Geopolitical risk should always be on the agenda, but it’s important to keep perspective. When the tariff news was announced there was a frenzy of media, fuelling a narrative of widespread concern. It’s important not to take every piece of news as absolute gospel and react immediately.

Human nature is to overstate the immediate or near-term impact and understate the long-term impact, which is why forward planning, customer focus and adaptability are so essential. If you can look past the noise and focus on the changes that will materially affect your organisation, you are already one step ahead of your competitors.

2. Scenario and horizon planning is critical

A balance of deep dives and horizon planning is required, considering worst case scenarios so you can plan or at least understand potential impacts. Businesses should be looking up to six years out. It’s then the board’s responsibility to weigh up the various scenarios and act accordingly.

Stress testing is also useful, coupled with keeping an eye on economic indicators. Ask: what is the worst that can happen, what needs to be true for it to happen and what are the lead indicators? There are countless scenarios you could model, but those lead indicators are your canary in the coal mine – zero in on those.

3. Uncertainty is the only constant

Uncertainty is complex and the biggest challenge for many businesses is deciding which markets to focus on. As leaders, management and boards succeed when they can manage ambiguity well – tariffs are a real test of agility. We must deal with what we know today, while trying to predict the future. When there’s volatility keep a macro perspective, be clear about your strategy and stay the course.

4. Be clear on the role of the board

As IoD Chair Ross Buckley so aptly put it, your board should provide oversight, insight, foresight and a bit of hindsight. Having experience and relevant knowledge of markets is also important and should show up in your board’s skill matrix.

Ideally, a third of your board members know the industry you work in inside out, a third have technical expertise, and the other third bring a diverse range of skills. This creates a more dynamic group able to keep their finger on the pulse. Boards should continually reassess the skills you need around the table.

5. Where there is risk there is opportunity

In times of change there is always opportunity – you just have to approach it with the right mindset. Turn red tape into red carpet by thinking creatively about product mix, pricing strategy and market access.

Diversification is key. Markets shift and tariffs change, but opportunity exists when we look beyond one market or one revenue stream. While complexity is unavoidable, it need not be limiting. With the right perspective, agility and focus on customer demand, global trade can be as much about unlocking opportunity as it is about managing risk.

We need to sharpen our approach, think more clearly and develop a strategy focused on the biggest opportunities.

Through all of this, the chair-CEO relationship and trust are critical. Clear, two-way communication on risk exposure, contingency planning and emerging opportunities is now a governance imperative for long-term competitiveness in an uncertain global order.

Boards must treat geopolitical risk as a material factor in strategy, capital allocation and market prioritisation. This requires active communication between boards and management so signals surface early, responses are aligned and resilience is embedded.

Tariffs have dominated headlines over the past six months, so it was refreshing to gain some perspective at the four events, placing impacts on New Zealand in a wider economic context.

The full impact of tariffs is yet to be felt – it will not be clear until 2026 when we start to see the ripples of changing markets and supply chains. But how we continue to react and adapt is up to us.