The Fallout from Trump’s Reign of Tariffs

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President Trump on Wednesday described his sweeping barrage of tariffs on about 60 countries, unveiled with great pomp in the Rose Garden, as “kind.”

The global response to the reciprocal tariffs — including an additional 34 percent levy on goods from China and 20 percent on those from the European Union — has been anything but.

Policymakers reacted with fury as corporate bosses brace for the biggest disruption to global trade in decades. The new trade duties are dismaying investors, too, as they appear far worse than expected. Even some Senate Republicans are pushing back.

The latest: The S&P 500 looks set to open deep in the red, as shares in Asia and Europe plunged on Thursday. Trump said the tariffs would usher in “a golden age” and generate “trillions and trillions of dollars.”

Thursday’s global stock sell-off could be in the trillions, too, with U.S. equities the hardest hit. Deutsche Bank strategists in London warned that the S&P 500 could tumble into correction territory on Thursday.

Among the big losers on Thursday: retailers and tech stocks with sprawling global chains such as Apple, Nike, Ralph Lauren and Walmart in pre-market trading. The prices of the dollar, oil, and Bitcoin are down, too, and there’s been a sell-off in Treasury bonds.

What’s spooking markets: With the stroke of a pen, the president raised the effective U.S. tariff rate to its highest level in more than a century. Trump spoke nostalgically about tariffs’ ability to generate wealth in a previous era and “reduce our taxes and pay down our national debt.” (That said, Karl Rove, the longtime Republican strategist and author of a book on the last hugely pro-tariff president, William McKinley, thinks Trump is drawing the wrong lessons from that epoch.)

Economists warn the new levies may set off a tit-for-tat trade war that could ignite inflation, and clobber global growth and corporate profits. The tariffs “equal more anxiety and uncertainty for American businesses and consumers,” the National Retail Federation said in a statement.

The fine print: Some commentators were dumbstruck by how the administration calculated the levies. (Here’s how the administration did it.) A remote, sub-Antarctic territory made the list, as did Ukraine, but Russia was spared.

The big questions: For countries on Trump’s reciprocal tariff list, is there time to negotiate a deal? Given the breadth of the levies, the litany of grievances that Trump voiced on Wednesday and his belief in tariffs as a revenue-driver, how willing is he to change his mind? Will that uncertainty force companies to pause investment plans, and could they face an anti-American consumer backlash?

Treasury Secretary Scott Bessent suggested that while the White House was open to talks, Trump was in no rush to do so. “I would advise none of the countries to panic,” he told Bloomberg Television. “I wouldn’t try to retaliate, because as long you don’t retaliate, this is the high end of the number.”

That message largely fell on deaf ears:

Could public opinion sway Trump? Look to Canada and Mexico, two of Washington’s biggest trading partners, which won a temporary reprieve from reciprocal tariffs. Lori Calvasina, the head of U.S. equity strategy research at RBC Capital Markets, wrote in a research note that “tariffs on these two countries have been far less popular in public opinion polls,” citing a recent Fox News poll.

Amazon makes a bid for TikTok, The Times reports. The offer comes ahead of a Saturday deadline for the video app to be cleaved off from its Chinese owner or face a ban in the U.S. Various parties who have been involved in the talks do not appear to be taking Amazon’s last-minute bid seriously, but discussions continue on a possible consortium deal that would bring Chinese investment in TikTok to less than 20 percent. A big question: whether such a structure would satisfy the conditions of the federal law.

Mark Zuckerberg lobbies President Trump over an antitrust lawsuit against Meta. The tech giant’s C.E.O. visited the White House several times, most recently on Wednesday, to persuade the administration to resolve a federal case brought by the F.T.C. that’s set to go to trial this month, The Times reports. It’s unclear what will happen, but the move comes as Zuckerberg has sought to win favor with Trump.

Another law firm strikes a deal with Trump. Milbank agreed to provide $100 million in pro bono services to causes supported by his administration, becoming the latest firm to make such pledges to avoid potentially existential threats by the president. But such agreements have drawn criticism from some associates of those firms as a betrayal of those practices’ principles. Then again, few of the nation’s top firms are willing to publicly back efforts by Perkins Coie to fight back against an executive order by Trump pursuing retribution against the firm.

The Supreme Court ruled against flavored vape makers. The court discarded an appeals court decision that found that the Food and Drug Administration had unlawfully rejected applications from makers of the tobacco products. That leaves in place the agency’s rule prohibiting the marketing of flavored vape products. The ruling comes as the agency grapples with deep cuts to its tobacco division staff, as well as at its counterpart at the Centers for Disease Control and Prevention, which gathers data on youth tobacco use.

One of the most riveting tales of apparent corporate espionage in recent memory is heating up.

A former executive at the human resources services provider Rippling, who was accused of funneling corporate secrets to Deel, a rival company, said in an Irish court filing released Wednesday, admitting that he had served as a spy — and reported to Deel’s co-founder and C.E.O., Alex Bouaziz.

The affidavit by the executive, Keith O’Brien, came after Rippling sued Deel last month over the accusations. A Deel spokeswoman did not return requests for comment.

The affidavit is littered with details right out of a spy movie:

  • O’Brien, who had been working at Rippling since 2023 but applied to join Deel last year, said Bouaziz had approached him about becoming a “spy” for Deel at his employer. “I recall him specifically mentioning James Bond,” O’Brien said.

  • Bouzaziz and his father, Philippe Bouaziz, who is Deel’s C.F.O., proposed paying O’Brien about 5,000 euros per month. O’Brien communicated with Alex Bouaziz over messaging apps including WhatsApp and Telegram, using code phrases like “send that watch to London” when he wanted payment.

  • O’Brien confirmed Rippling’s accusations that he had searched through company resources, including Slack and Google Drive, and had taken screenshots from his phone and passed the information to Bouaziz. The information included Rippling’s upcoming products and its instructions for how to persuade potential clients not to go with Deel’s products.

  • When Rippling laid out a trap last month to catch the person suspected of being a spy — a Slack channel created solely to trip up the mole — Bouaziz told O’Brien to check out the channel, according to the affidavit. Minutes later, Bouaziz asked O’Brien not to do so, believing it could be a trap. But by then it was too late.

  • O’Brien admitted to erasing his phone after a court-appointed lawyer told him to preserve evidence, later destroying the device. He added that Deel lawyers told him to tell the Irish court that he was being harassed for reporting “Russian payments” involving Rippling, in violation of sanctions, and that he had never shared data with Deel.

  • O’Brien also said that a Deel lawyer recommended that he and his family fly to Dubai, suggesting that “we all need a holiday.” Alex Spiro, Rippling’s outside lawyer, told DealBook in a statement, “Vacation in Dubai now does have a whole new meaning.”

“I was getting sick concealing this lie,” O’Brien said in his affidavit, adding, “I realized that I was harming myself and my family to protect Deel.”

Elon Musk’s time in Washington could be coming to an end. President Trump told his cabinet the billionaire entrepreneur would step back from his government cost-cutting efforts in the coming weeks to return to his companies, including the ailing Tesla.

Does it spell the end of the Musk-Trump alliance? Unlikely.

The news, reported by Politico, came hours after Tesla reported weaker-than-expected car sales for the first quarter. Global sales fell 13 percent from last year, the biggest drop in the company’s history, amid a backlash to Musk’s work in Washington. It also came a day after the billionaire was humiliated in his efforts to sway a Wisconsin Supreme Court race.

The Musk-Trump union has always been an unusual one. Musk’s manic public displays and dressed-down attire seemed to clash at times with Trump’s dark suits and showmanship, but their similarly brusque approach and attacks on the federal work force have made them easy allies.

Observers have wondered how long the relationship would last given how both men crave the spotlight. And lately, Musk has become more of a liability for the president:

Don’t expect Musk to go away completely. The president plans to keep close ties to the world’s richest man, The Times reports. The entrepreneur has arguably been Trump’s most effective advocate, deploying his personal fortune to further Trump’s goals and using his X social network to punish anyone opposing the president, including members of his own party.

More important, the entrepreneur has become the Republican Party’s main money man, despite the Wisconsin loss.

Musk’s own empire needs attention. Tesla’s stock has fallen nearly 30 percent this year, and protests at dealerships have continued to mount.

Tesla’s weak car sales have Tesla bulls worried. “This delivery number was a disaster,” Dan Ives, a Wedbush Securities analyst, wrote in a research note on Wednesday. “They were a disaster on every metric.” He added: “The more political he gets with DOGE, the more the brand suffers — there is no debate.”

Deals

  • President Trump’s media company filed to re-register shares for a possible sale worth more than $2 billion. (NYT)

  • Norway’s Conservative Party is pressuring the government to let the country’s $1.8 trillion sovereign wealth fund, the largest in the world, invest in defense companies, especially as European defense stocks have been on the uptick. (CNBC, NYT)

  • Wall Street banks are urging companies filing for I.P.O.s to temper their valuation targets as the markets continue to tumble. (Bloomberg)

Politics, policy and regulation

  • Senate Republicans are trying to bypass the chamber’s parliamentarian, breaking norms in an effort to cram more tax cuts into their budget bill. (NYT)

  • Mayor Eric Adams of New York City is now running for re-election as an independent, bypassing the crowded Democratic primary as he faces daunting odds for victory in November. (Politico)

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