As Trump's erratic tariff moves disrupt global trade, India's top B-schools see a wealth of lessons in the chaos

Bengaluru: As US President Donald Trump's erratic tariff moves disrupt global trade, destabilise economies, and spark extreme market volatility, India's top B-schools see a wealth of lessons in the chaos.

The biggest takeaway is that in today's global economy, budding managers and future business leaders can no longer rely on predictable, long-term plans, said directors and professors across Indian Institutes of Management (IIMs), XLRI and Management Development Institute, Gurgaon.

US tariff saga is a clear example of how political decisions can rattle the economy in an instant, according to Himanshu Rai, director, IIM Indore. Businesses, investors and even governments are on edge; they can't make long-term plans because everything seems so unpredictable.

"B-school students must be ready to handle uncertainty. They must learn and enhance the skills that enable them to plan for different possible scenarios and make quick, smart decisions even when things change unexpectedly," said Rai. "The situation also shows that business leaders need to manage not just markets, but also relationships with governments and public opinion."

Rai said that MBA students need to pay attention to how companies are responding.

Drawing parallels to pandemic

Some companies are lobbying the government, some are changing their suppliers and others are focusing more on automation or diversifying their businesses, he said. "These different reactions are a great way to study how businesses handle tough times and plan for risks."

The level of uncertainty is a throwback to the days of the Covid-19 pandemic, according to some. "The learning process started during Covid when many assumptions we had made came apart. A few things are relevant to the present context as well," said Rishikesha T Krishnan, director, IIM-Bangalore.

The first, he said, is scenario planning and the need to think through different eventualities as a regular process. The second is to be aware of the biases identified by psychologist Daniel Kahneman and others and to take precautions to avoid these from clouding one's judgement. "The third is to read weak signals and manage risk better," said Krishnan. "These are already part of our courses but need further underlining and strengthening."

Case Studies

The current scenario can provide fodder for multiple case studies and will be introduced in classroom discussions in courses such as macroeconomics, international business and geopolitics, according to B-schools. This could range from how companies adjust their supply chains when faced with sudden changes (operations management), trade theories on protectionism and the immediate impact of tariff shocks on global markets (global economics) and how businesses engage in cross-border negotiations (international business). Strategic management courses can use the tariff saga to teach students how companies recalibrate their competitive positioning when the rules of the game change overnight.

"Things are happening in such a disorganised manner and creating such uncertainty that it's showing signs of a brinkmanship episode gone wrong," said Rohit Prasad, professor of economics and public policy at MDI Gurgaon. "Students should understand how to conduct themselves in such episodes because brinkmanship is a reality even in business. They should try to wait things out and look for opportunities within the chaos."

The situation also lends itself to many case studies, he said, from how a particular company could pivot towards traceability solutions, how the government is dealing with the situation and how business and government are communicating.

Shifting Landscape

Santanu Gupta, professor of economics, XLRI, Xavier School of Management, Jamshedpur, said academics are taking immense interest in the current economic and political scenario. "We are asked questions every day, and the challenge is this: whatever is our advice to students today must be in sync with whatever we say tomorrow, when the situation may be diametrically opposite," he said.

When the scenario is so unpredictable, the advice to students is to be calm and not take any decisions in haste, said Gupta. He said he is starting an economics course with students for the one-year programme, and this is one of the first things he would take up. "We, in economics, prefer to bring up lessons from history, and stakeholders affected by the imposition of tariffs," he said.

The current situation lends itself to case studies for classroom discussion in multiple courses, said Prafulla Agnihotri, director, IIM Sirmaur. "In international business, for example, a case of a firm exporting its products to the US can be discussed, and students, as managers of that firm, can be asked to deal with the situation. In macroeconomics, the same scenario can be used to explain the concepts of tariffs as barriers to international trade," he said.