Trump keeps on course
Even President Trump has acknowledged that his pure economic agenda is increasingly at risk. I asked Fox News this weekend if he was expecting a recession this year, he only allowed it, “I hate predicting such things.”
That evasion occurs when his trade war continues to escalate and businesses warn him that his sudden government cuts and immigration crackdowns will be financially costly. The question is, will the president stick to his plan?
Latest: Beijing has begun to impose tariffs on US agricultural products, including blocking or restricting access to some US companies to the Chinese market, including major exports of chicken, wheat, soybeans, and pork.
Inventory futures point to another rough market open. Last week, the S&P 500 experienced a worst weekly decline in six months.
While Chinese tariffs may actually take some time to kick in, they represent the latest outcomes of the fight Trump has been actively sought. Meanwhile, the new Canadian leader has pledged to fight back, including supporting retaliation fees. (More details below.) For now, Mexico has held back a similar counter punch, but its president, Claudia Sinbaum, said on Sunday that he will act if necessary.
The tariff outlook looks cloudy. Trump suddenly gave Canada and Mexico a respite late last week, but he plans to impose a 25% tariff on steel and aluminum imports starting Wednesday, with more taxes than next month.
Other Trump policies are also stricken by corporate America. The CEO began complaining about the impact of widespread Elon Musk-led cuts on federal officials, including losses in government contracts and delays in drug approval. “There's a lot of uncertainty right now. I don't know when that's going to be a chip,” said Carl Eschenbach, CEO of HR service provider Workday, last week.
Other executives are worried that businesses, including the homebuilding, hospitality and agriculture sectors, could face the threat of Trump's “massive deportation.”
It appears Trump has yet to be deterred, despite economists worrying about the unintended consequences of the trade war. “They always say we want to be clear,” he said of business executives, adding that his policy will ultimately bring about results. “It's going to take a little while, but I think it should be great for us.”
Wall Street wonders if the stock or bond market will be like that if the approval rating is not yet sufficient to curb Trump's policy overload. For now, that's an unresolved question.
This is what's going on
Key inflation data and possible government closures are focused this week. On Wednesday, investors repeat their latest consumer price index report as concerns about tariff fuel fuel inflation grow. Washington could be shut down Friday unless Congress approves the suspension funding measures. Voting is expected to be tough.
President Trump says that a Tiktok deal could soon come. Trump said four groups are fighting to buy the video platform's US business from Chinese parent Bytedance, but they have provided little new details. The future of the popular video app is in Limbo, along with the ban required by federal law set to come into effect next month.
Google will not be forced to invest in AI, but it is still facing a breakup call. The Justice Department said the tech giant would be able to maintain interests in artificial intelligence companies, including humanity. But that could be a cold comfort for Google. Because the divisions that maintain the position of the Biden administration are demanding that the company be split up.
Musk Starlink takes heat in Europe
Elon Musk's growing political power and his atypical shift to politically fierce rights sparked protests in the US that are stricken at his company, including Tesla.
The same thing happens in Europe, where anti-spiritation against masks is stopped selling Tesla. Perhaps his Starlink satellite internet business. It raises questions about whether the tech mogul's politics are damaging his global business empire.
Summary: Musk rang the alarm bell this weekend when the Ukrainian frontline wrote to X that “collapse” against the Russian troops if Starlink is closed. European officials have long feared that the world's wealthiest man appears to have extraordinary powers over technology essential to national security.
Polish Foreign Minister Radslo Sikorsky called the post of Musk as a provocation on Sunday, suggesting that if Starlink proves “unreliable,” his country would be “forced to look for other suppliers.” Secretary of State Marco Rubio demanded that Sikorsky apologize. Musk later told the Ukrainian terminal “Starlink will never turn off the terminal,” but told Sikorsky “a quiet little guy.”
Keystarlink agreements are now displayed on Limbo. Italy is reportedly rethinking about awarding the company a $1.6 billion contract. Musk said he wanted to meet with the country's president, Sergio Matarera last weekend.
In particular, Musk did not mention Prime Minister Giorgia Meloni, Musk's best friend, who fired fire from opposition lawmakers for a potential Starlink deal.
Can European rivals win the ground? Eutelsat's shares rose more than 20% on Monday, more than tripled last week amid the statement that Starlink's French rival was running for an Italian deal.
Beyond Sikorsky, other European officials spoke about replacing Starlink. European Union commissioner Andrius Kubilius oversees defense and space, and last week told Bloomberg TV that he “could trade” and would do so quickly if necessary.
Other European aerospace companies are also exploring potential partnerships to create Starlink rivals, and are likely betting on allowing EU leaders to relax and allow Bloc merger rules.
Carney takes on trade with Trump
Canada has a new leader in the form of Mark Kearney, a former central banker who sailed through his country through the 2008 financial crisis and Brexit.
But the unelected prime minister faces a critical new challenge, fighting for Canada's economy, and perhaps its sovereignty, against President Trump.
Voters seem to believe that Carney is better off fighting Trump. He surged to victory with nearly 86% of votes cast by liberals, far surpassing former Canadian finance minister Christia Freeland.
As Carney's star has risen, so is the Liberal Party's outlook in the polls. Canada must hold a federal election by October. Recent polls suggest that the Liberals largely erased a 20-point deficit against the Conservatives.
Kearney is eligible for gold plated, including a Goldman Sachs banker, head of the Bank of Canada and the Bank of England, and an international advocate for green investment. “Kearney has no election experience in dealing with economic issues, but he has undeniable gravity,” said Dimitry Anastakis, a professor at the Rottman School of Management at the University of Toronto.
That said, many major banks have left Carney's Green Finance Alliance amid a wider repulsion towards environmentally emotional investment. And some political opponents have questioned whether his role in managing Canada's response to the 2008 financial crisis is being exaggerated.
But taking on Trump is a big test. Carney hits apocalypically patriotic tone with his victory speech, saying, “America is not Canada, and Canada will never, in any way become part of America in any way or form.”
Carney accused her of saying it was Trump's efforts to bully Canada. They abandoned major natural resources such as oil, gas, coal, cala and uranium.
But the Canadian economy is deeply entangled with the US economy in many regions, including automobile manufacturing, and the escalating trade war with tariffs and anti-government could cause pain to Canadians, making Kearney's job even more difficult.
Trump chases big laws
President Trump issued a notice to an elite American law firm, telling Fox News' Maria Bartilomo:
The declaration came after Trump issued an executive order seeking to punish companies that punished strong democratic ties, such as Perkins Coy and Covington & Burling, who represented former special adviser Jack Smith.
In summary, the movement has shaken up the big world of legal, the Wall Street Journal reports:
In private conversations, partners from some of the nation's leading companies have expressed anger at the president's actions. What they aren't trying to do is say so publicly. Back-channel efforts to convince major law firms to sign official statements so far criticising Trump's actions have been said by people familiar with the issue, because of fear of retaliation. …
Legal observers say some of the industry's attention is not concerned about losing many corporate clients, including attending the inauguration and rolling back diversity initiatives. The lawyer also said he was concerned about taking public measures that could undermine the ability to provide effective legal representation.
In line with these policies, Dealbook hears that other law firms are beginning to work with several companies, including Covington, to gauge whether they could hurt their clients with issues before government regulators.
Speed is read
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Bane and advertising giant WPP reportedly plan to disband Kantal, a research firm that it owns, and sell the business instead of publishing it. (ft)
Panama has requested documents behind CK Hutchison's plan to sell control of the domestic port business from a group led by BlackRock in a Trump-backed deal. (Reuters)
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