US tariffs: pick the wrong KPI and others will define success for you

Over 30 years of leading companies through change, I have learned that a strategy, project or initiative needs a clear definition of success: what should improve, by how much, by when and at what cost. Without it, supporters point to the number that improves, detractors to the one that doesn't, and the debate never ends.

Today, I was reading a New York Times article on US tariffs and thought it was a great illustration.

In April 2025, on "Liberation Day", the White House set out several goals, including:

1. Balancing the goods trade deficit.

2. Bringing production back to the US.

What was missing was a clear timetable and a way to weigh progress on one goal against setbacks on another.

The Times, like many others, focuses on the trade deficit as a measure of success of Liberation Day. It is an obvious scorecard: reducing it was a stated goal, the figure is published every month, and it is easy to follow.

The latest figures look bad. In August, the goods deficit reached $137 billion, its highest in 17 months. The irony is that part of this reflects strong US demand and investment. Semiconductor imports almost doubled in the first eight months of the year, helped by demand from the AI buildout. Consumers keep spending and businesses are restocking. A growing economy often imports more. The deficit alone tells us little about whether manufacturing is returning. It's a bad KPI, but it is the one that is used the most often.

A better KPI is probably manufacturing jobs. It is what the policy promised, and the number people actually care about.

On that measure, the picture is mixed. Factories employ 14,000 fewer people than in March 2025, just before the April announcement. Essentially flat.

What is better:

- Factory jobs have recovered by 72,000 since December.

- Factory output is up 1.8% since March 2025.

What is not (for US manufacturing jobs):

- Factories are producing more with about the same number of people. That may mean better productivity, which is welcome, but more production does not automatically mean more jobs.

- Factory construction spending is down 25% since March 2025. It is only part of the investment picture, but it gives little reason to expect a rapid rise in factory jobs.

So far, the promised revival in factory jobs remains hard to see. Tariffs are not the only force at play: AI, interest rates and automation matter too.

But it shows a much more nuanced outcome than the inadequate trade deficit KPI would show.

The lesson for anyone leading a transformation: own the narrative. Think hard about the KPI that reflects what you want to achieve. Set a target and a date. Then keep reporting progress against it, more often than feels necessary.

Otherwise, others will define success for you.

Analysis: NeuronVentures