In an uncertain world, keep calm and think of Vuca

Saturday, 28 February 2026

A US Supreme Court ruling has revived uncertainty about tariffs, but is such disruption really all that new?

Mike “MOD” O'Donnell is a US-based commentator with extensive experience as a director and adviser to New Zealand businesses. He is currently NZTE’s regional trade director for North America. This column represents his personal opinions.

OPINION: Exactly 35 years ago this week, leaders from Czechoslovakia, Hungary and Poland gathered in the Hungarian town of Visegrád to form a cooperative to ease their passage from Soviet alignment into the trade systems of Western Europe.

The Cold War was ending, yet what exactly was replacing it was anyone’s guess. Walls were literally crumbling. Old certainties had dissolved. Institutions were rearranging themselves like tired furniture during an over-enthusiastic spring clean.

Economic systems were being rewritten in real time. The future was less a destination than a moving target.

Military thinkers, never shy of an acronym, supplied business with a description for the conditions: Volatile, Uncertain, Complex and Ambiguous. Vuca. And business embraced it.

Vuca neatly captured the mood of the early 1990s, when the Berlin Wall came down and businesses attempted, with varying degrees of success, to make sense of what often felt like the insensible.

Fast forward to today and the description feels less historical.

Last week offered a modern illustration. The United States Supreme Court ruled that certain tariffs imposed under emergency economic powers were unlawful, finding that the statutory authority relied upon did not extend to broad-based tariff setting.

The decision did not abolish tariffs, but it did remove the legal foundation for a particular set of measures.

The policy response followed briskly. Existing settings were rescinded, while alternative mechanisms appeared under different clauses of the Trade Act of 1974.

US President Ronald Reagan meets with Soviet leader Mikhail Gorbachev during a summit in the late 1980s, as the Cold War moved into its final years culminating in the collapse of the Iron Curtain - and the onset of Vuca.

In practical terms, this produced what markets traditionally greet with a weary sigh: rapid, lightly telegraphed change layered onto legal complexity.

For exporters, the game shifted. Curiously, many ended the week not terribly far from where they began, facing a 10-15% blanket tariff alongside lingering uncertainty about refunds.

Vuca, however, offers a useful lens for New Zealand export companies navigating such waters.

Volatility shortens how far ahead one can sensibly plan. Flexibility begins to outrank theoretical optimisation. Pricing strategies require room to adjust. Contracts benefit from mechanisms that anticipate movement. Less set-and-forget, more steer-and-correct. And stay on your toes.

Uncertainty challenges the instinct to wait patiently for clarity. Perfect information, like perfect weather in Wellington, rarely arrives on demand. Businesses that think in ranges rather than single forecasts tend to remain steadier on their feet.

Complexity is where surprises lurk. Trade policy seldom behaves as a standalone variable. It ripples through exchange rates, freight costs, margins, inventory decisions and customer behaviour. The second-order effects often matter more than the announcement itself.

Ambiguity, meanwhile, is simply life in a dynamic system. Cause and effect blur. Signals conflict. Judgement and measured experimentation begin to outperform rigid devotion to yesterday’s models. It would be a mistake to think that tariffs will be gone one day.

None of this requires predicting the future, which is just as well given that this remains stubbornly impossible. Otherwise I’d be a much more successful investor than I am.

Vuca thinking is less about foresight and more about posture: clarity of purpose, adaptability of execution, and a willingness to adjust without perpetually changing direction. And to ask for help when you need it – including from New Zealand Trade and Enterprise or the Ministry of Foreign Affairs and Trade.

Meanwhile there is something faintly Kiwi in the Vuca approach to purpose and execution. New Zealand firms have long operated at the edge of distance, scale and variability.

Agility is not new muscle memory for most Kiwi exporters. The challenge is applying it deliberately rather than reactively.

History provides perspective.

The Cold War’s end did not deliver a neat, settled global order. It ushered in something more fluid, interconnected and occasionally unsettled. Stability did not disappear, but it became dynamic rather than fixed.

Significantly those fluid, interconnected and unsettled times delivered global economic growth of 45% over the next decade. Global economic output increased from roughly $23.6 trillion in 1991 to over $33.3 trillion in 2001.

Which may be the most useful reminder from 1991.

Periods of uncertainty often feel like painful aberrations while we are living through them. In hindsight, they frequently mark transitions between eras. The discomfort is not necessarily evidence of failure nor of negative growth.

More often, it is simply the sensation of systems evolving — something the world has always done, if rarely on a timetable convenient to business planning.