Corporate America's toughest job? Being COO during the tariff whiplash

• The Supreme Court struck down much of Trump's tariffs, but Trump could try to impose levies in other ways.
• COOs, who are responsible for overseeing where companies build and source products, are in a tough spot.
• The uncertainty and whiplash surrounding tariffs is "very frustrating," said one COO of an HVAC company.

Friday's tariff ruling has once again put America's supply-chain bosses in a bind.

By striking down much of President Donald Trump's sweeping tariff policy, the Supreme Court has created a fresh bout of uncertainty for chief operating officers and other leaders responsible for overseeing where companies build and source their products.

Many made strategic changes after the levies were announced last year, and the new ruling — plus Trump's strong reaction to it — are now clouding their path forward. With the commander in chief fighting back, COOs must decide whether to proceed as if the court's decision is impenetrable or wait to see if the White House can successfully keep the tariffs intact.

"Tariffs are written in DC, and they're felt in the COO's inbox," Jason Schloetzer, a professor at Georgetown's McDonough School of Business, told Business Insider. "It's kind of an impossible job."

Dealing with disruption

In a news conference held shortly after the ruling, Trump lashed out at the court's justices who sided against him, saying they should be "absolutely ashamed" and accusing them, without evidence, of being "swayed by foreign interests." He also said "alternatives" would be used to preserve his trade agenda and that he'd tap a separate authority to impose a 10% global tariff on top of existing tariffs.

"President Trump has been abundantly clear: Tariffs are here to stay, and the America Last era of American workers being ripped off is over," White House Spokesman Kush Desai said in a statement. "The Administration will be pursuing other legal authorities to maintain President Trump's America First trade and economic agenda while continuing to implement a pro-growth agenda of tax cuts, deregulation, and energy abundance."

Trump's alternative was announced Friday night. Trump signed a proclamation that would implement a temporary 10% import surcharge for 150 days, starting on February 24, under Section 122 of the Trade Act of 1974. The executive order also carved out exemptions for certain categories, including critical minerals and some agricultural products.

Any strategies Trump deploys will likely face legal and other hurdles that could take months to resolve, said Schloetzer. In the meantime, "COOs will just press the pause button" on decisions involving sourcing, factory locations, labor, and other expenses, he added.

Many companies are still grappling with the impact of actions they took last year to cope with Trump's tariff hikes, said Rob Lalka, who teaches entrepreneurship at Tulane University.

For example, he said that some companies responded by raising prices on consumer goods, which in turn affected people's spending habits and opinions of those businesses.

"That disruption is something you can't reverse," he said.

Now, with the fate of Trump's tariffs up in the air, COOs are experiencing the kind of whiplash that can be debilitating, said Lalka, especially for those at startups and small businesses with limited resources.

"They're the ones who are often working with the thinnest margins," he said.

Keeping things humming

Friday's ruling could also benefit companies financially through refunds. The Supreme Court ruled that the federal government illegally collected more than $133 billion in taxes from American businesses.

Yet while business groups such as the US Chamber of Commerce and the National Retail Federation hailed the court's decision, Trump administration officials have suggested that issuing refunds would be a messy process.

For now, the burden of figuring out how to keep operations humming will fall largely on COOs, said Schloetzer.

"CEOs can always focus on talking about long-term strategies, and CFOs can focus on modeling what these things might mean for margins," he said. "But COOs actually have to be the ones in the short-term that are delivering."

Those in manufacturing have it particularly bad, he added, because such companies may need to move components across multiple countries.

"It really is difficult to think through what the margin implications would be," said Schloetzer. "They've got to just be pulling their hair out."

'Back to where we were'

Brian Smith, COO of Omni Containment Systems, an Elgin, Illinois, manufacturer of HVAC cleaning systems, is feeling the heat.

"It's very frustrating … because of the journey that we just went on for one year in altering our import-export strategies," he said.

Omni, which imports goods from Spain and exports to Canada, lost sales last year due to the Trump administration's tariffs, Smith said. The company managed, however, and Smith said he thought "things had kind of stabilized" in recent months.

"This will take us right back to where we were in the first and second quarter of last year, which was complete uncertainty," he said.

Smith added that it's hard to know how this will play out with suppliers and buyers.

"We're going to have to have some conversations with our larger customers who buy multiple machines and discuss what influence this is going to have," he said.

Another unknown he's wrestling with is whether a refund is headed Omni's way for the tariffs the company has paid to date.

"What are they going to do with all the money they collected?" said Smith of the payments that the federal government illegally collected from US businesses, per the Supreme Court's decision. "If they could just answer that question, it would be helpful either way."