Uncertainty was the word of the day at the May 15 Power Breakfast at the Heritage Center in downtown Des Moines. The focus of the forum was recent federal policy changes, ranging from tariffs to DEI. Several experts shared their perspective on those changes and how local business leaders can respond.

Panelists included Joel Anderson, partner, government services at RSM US; Mike McCoy, CEO of NCMIC Group; Matthew Mitchell, CEO of Bâton Global; Dave Stone, advocacy officer at United Way of Central Iowa; Anne Villamil, professor and Henry B. Tippie research fellow in economics at the University of Iowa; and Jo Ellen Whitney, shareholder and chair, employment law and labor relations department at Dentons Davis Brown.

Since President Donald Trump began his second term in January, he has signed 152 executive orders, 39 memoranda and 57 proclamations. Tariffs have been implemented, changed and paused multiple times since the start of the year. Markets have soared and declined. These changes have made it challenging for businesses to know what to expect in coming weeks, months and years. 

The overarching message of the day was, “don’t panic.” Each panelist emphasized staying calm and making thoughtful decisions in the face of uncertainty. Anderson said it’s easy to get caught up in the 24-hour news cycle. 

“If I do read the headlines, I try to go to the source material right away,” Anderson said. “Let’s go read the executive order, breathe and figure out what is actually going on.” 

Mitchell offered a similar sentiment saying, “I think it’s not only uncertainty, it’s the cumulative effect of this uncertainty. Sometimes a recipe or a prescription for uncertainty is just be calm, stay calm.”

Tariffs and economic policy

Villamil, who provided a detailed look at the economy and tariffs, said the business community should adopt a “wait-and-see” perspective. 

“In terms of where we are right now, if you only let me use one word, it would be uncertainty and I think everyone feels that,” she said. 

While there have been market fluctuations and many unknowns, the economy is healthy overall, she said. GDP, unemployment and interest rates are the three indicators she’s tracking to determine the health of the economy. 

• GDP: While the GDP declined by 0.3% in the first quarter of the year, the economy grew by 2.9% in 2024 and 2.8% in 2023, rates that signal a healthy economy, she said. According to the U.S. Bureau of Economic Analysis, the decrease in GDP in the first quarter reflected an increase in imports, which are a subtraction in the calculation of GDP and a decrease in government spending.
   “We want to be growing, but it is actually not as concerning as one might think, because a lot of that decline was people being rational and saying, we have these tariffs coming down the pike, so we’re going to import more,” she said. “If you are a big, well developed country like the United States, you would expect to be growing at a rate between 2% and 3%, so we have been in good shape going into this.”
• Unemployment: Meanwhile, unemployment is up slightly at 4.2% compared to 4% in 2024 and 3.6% in 2023, all numbers that are historically low. 
• Inflation: The inflation rate was 2.3% in April, compared to the post-COVID high of 9.1%, indicating improvement, she added. “We’re going in the right direction,” she said. 

Tariffs have been characterized by stop-go changes, Villamil said. 

“On Feb. 2, the U.S. imposed tariffs on Mexico and Canada, and then, pretty quickly, paused them and [we were left wondering] are we going to have a 25% tariff? It completely makes sense to leave time to negotiate agreements, but we’ve had announcements, and then 30-day pauses,” she said. “Next, the tariffs came more broadly on pretty much all countries. They were much higher on China than we expected, and eventually went up to about 145%. They were 20% on the EU. They were 46% on Vietnam.”

Villamil shared her perspective on tariffs on China and Vietnam. 

“One of the reasons they were so high is that China, you can see this very clearly in the data, China was backdooring through Vietnam and some other countries to try and evade tariffs,” she said. “This is a standard thing. Tariffs are a tax. We know everybody all around the world attempts to evade taxes, if they can do so, particularly legally.”

Reciprocal tariffs were then put in place by the U.S. on other countries, which led to the stock markets crashing 8% and a subsequent pause. 

“When tariffs were significantly higher and broader, markets said, ‘This is going to decrease profitability and ultimately decrease GDP.’ Tariffs do, and trade wars in particular, shrink GDP.” 

Since then, reciprocal tariffs on other countries have been, for the most part, delayed until July 2. Reciprocal tariffs on China have been paused until Aug. 12, creating time for negotiations.

“That is a good thing,” she said. 

Villamil’s first job was working for the Office of the U.S. Trade Representative, which coordinates and negotiates bilateral trade agreements. She noted that trade agreements are “tremendously complex.”

“Particularly with regard to [trade relations with] China, there are real problems, and they need to be negotiated,” she said. “Canada was a bit of a head scratcher, particularly because the law that was used to justify putting tariffs on Canada was national security.”

Typically, trade negotiations happen among working-level groups representing different countries, and those talks last for months. 

“They negotiate for months, which is why these 30-day suspensions were never designed to solve these very real problems, and then only at the very end of the process, would these treaties or these agreements end up on presidents and corresponding people’s desks,” she said. “The 90-day suspension with China is good news, in terms of things that I am paying attention to. Even better news is that the U.S. delegation and a Chinese delegation are meeting in Geneva, which is a place where this would standardly occur, and are talking about these issues. I hope that we will see some progress, but it absolutely has been these sudden starts and stops, and when things like the market correct by 8%, that gets policymakers’ attention, and I think will ultimately lead to solutions.”

DEI

Many local businesses and organizations have had questions about federal changes to DEI policy. An executive order issued on Jan. 20 ended DEI mandates, policies, programs, preferences and activities in the federal government, which created uncertainty around what effects private businesses could face. Many in the legal community have advised to focus DEI programs on inclusivity. Company programs designed to bolster or help specific groups should now be open to everyone, for example. 

At the Power Breakfast, Whitney said something businesses have control over in this time of uncertainty is treating everyone fairly.

 “One thing I know for sure is, please don’t discriminate against people,” Whitney said. “I understand there is a whole lot of complexity tied to [DEI changes] but just don’t discriminate. I don’t care if they’re named as a category or not a category, or what the Iowa state Legislature does, or what anybody else does; don’t discriminate against people. It’s not good for business.”

Coupled with Supreme Court decisions in recent years and the ambiguity of new DEI rules, businesses should tread carefully, she said. Now is a good time for businesses to review their DEI policies and ensure that those programs are meeting company goals. 

“At the end of the day, most of my employers want to recruit good quality employees, and they want to retain them,” Whitney said. “It’s about recruitment and retention. What are we doing there, and do all of these programs, whether they’re DEI or not, do they serve those purposes?”

Nonprofits

While federal funding for many arts and cultural grants has been cut in recent months, options remain for these organizations, Anderson said. 

“A lot of grant funding is being withheld or going through multiple processes,” he said. “There still are policies and procedures in place to allow for someone to challenge if they have their grant funding revoked. There’s closeout periods. I think still, if the grant is fully canceled, there are still ways to get partial payments.”

On May 13, a Congressional tax bill called for the revocation of 501(c)(3) status from nonprofits without due process. The proposed bill, along with numerous funding cuts, have put nonprofits in a precarious position when demand for nonprofit services is increasing in Central Iowa, Stone said. In Central Iowa, health and human services agencies are reporting an 82% increase in demand for services, while 32% of agencies can meet that demand, he said. 

“We’re in the days of uncertainty,” Stone said, “But one of the things we can be certain of is the nonprofit community, this sector, is very fragile, but very committed to continuing [to meet] the needs of Iowans and Central Iowans in particular.”

Business strategies

Transparency from leadership and prioritization can help businesses stay focused during long periods of uncertainty, Mitchell and McCoy said.

 An important first step in uncertain times is ruthless prioritization, Mitchell said. 

“Ruthless prioritization. That may not necessarily be a strength for this particular leadership culture. We tend to be a little bit more peanut butter. We’re going to say ‘yes’ to everything in our very Midwest nice voice and then quietly go, ‘I can’t deliver that.’ And so how do we ruthlessly prioritize things that really align with our purpose, with the realities of the external environment?”

At NCMIC, leaders work to be transparent and to engage in conversation to determine how they can help employees during these uncertain times. McCoy said the company addressed employees’ concerns about the economy by holding webinars on how economic changes are affecting employees’ retirement savings. 

“We’ve been communicating more frequently than we were before this uncertainty with our employees and we’ve been trying to do a better job of listening,” McCoy said. “How we lead through uncertainty sends a message to our team. This is a really wonderful opportunity to lead and build engagement as you do it.”