What a weekend of headlines, from tariffs on Canada, China and Mexico to Elon Musk getting inside the Treasury Department’s payment system. We have all of the details below — a cheat sheet of the whirlwind of changes that will probably affect the global economy and society. We also have lots of questions about what’s happening.
If the tariffs are a negotiating tool, how long will negotiations take — and how is President Trump measuring success? Moreover, how long will the American public be willing to suffer the “pain” that Trump acknowledged his tariffs will inflict? The Venn diagram of those is how much time and leverage Washington will, or won’t, have.
We also want to know whether Musk’s access to the Treasury payment system means that he is able to unilaterally end certain payments. And what kind of legal — and practical — recourse will individuals or organizations have to adjudicate these decisions?
“Will there be some pain? Yes, maybe (and maybe not!)”
One of Wall Street’s worst fears about the return of Donald Trump to the White House is poised to become reality: U.S. stock futures are down sharply on Monday, as are global markets, as huge tariffs against Canada, China and Mexico are set to take effect just after midnight Eastern.
Some still hope that the levies, which are expected to cover a third of American imports, or $1 trillion in goods a year, either won’t come to pass or won’t last long. But business leaders, economists and investors are wary that Trump’s open-ended goals mean they’ll be in force for a while, leading to a trade war that could have devastating effects on the American economy.
The latest: The three countries pledged retaliation, in what would be a quick escalation of a trade battle against three of America’s biggest trade partners. (Trump’s executive order authorizing the tariffs allows for Washington to ratchet up its levies if the targeted countries impose counter-tariffs.)
Prime Minister Justin Trudeau of Canada warned Americans that the battle would “have real consequences for you,” as he discussed imposing tariffs on products from politically important U.S. states including Kentucky bourbon, Florida oranges and Pennsylvania-made Harley-Davidson motorcycles.
Trump defended his plan over the weekend: “THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!)” he wrote on Truth Social.
Business groups expressed concern about the consequences of a trade war. American carmakers “should not have their competitiveness undermined” by the tariffs, Matt Blunt of the American Automotive Policy Council told Business Insider.
The Fed must figure out how to respond, including whether tariffs pose a long-term threat to inflation. The central bank has already paused reductions in interest rates, and isn’t expected to resume them for at least a few months.
Criticism of Trump’s plans came in from across the political spectrum. “The Dumbest Trade War in History” was the headline of an opinion piece by The Wall Street Journal’s editorial board, which has generally backed the president. And Senator Rand Paul, Republican of Kentucky, argued that “taxing trade will mean less trade and higher prices.”
On the Democratic side, Larry Summers wrote in a lengthy thread on X that the Canada and Mexico tariffs were “inexplicable and dangerous.”
The big question is how long all this lasts. The common wisdom was that Trump’s threats were a negotiating tactic. But the lack of clear guidelines suggest that this is more the kind of asymmetric deal-making Trump is known for, leading to confusion for executives and world leaders.
One concern on global leaders’ minds is whether Trump’s plan permanently scrambles the global financial order — and perhaps leaves the United States in the cold.
HERE’S WHAT’S HAPPENING
The Trump administration appears to ratchet up pressure on Panama. Secretary of State Marco Rubio told the country’s leader that President Trump had determined that China exercised “influence and control” over the Panama Canal and demanded “immediate changes.” Trump said that “we’re going to take” the canal back, or “something very powerful is going to happen.” The messaging casts further uncertainty over the fate of the waterway, a key channel for global commerce.
OPEC Plus reportedly plans to reject pressure to sharply increase crude production. The group of oil-producing countries is likely to stick with planned gradual increases in output, despite calls by Trump to move fast to lower prices, according to Reuters. Analysts said the group would probably embark on diplomatic efforts to avoid its members facing retaliation from Washington.
The head of the C.F.P.B. is fired. Rohit Chopra, who was set to lead the Consumer Financial Protection Bureau until late next year, managed to hang on for nearly two weeks despite expectations that Trump would dismiss him. The administration is expected to roll back the agency’s oversight, though Chopra urged Trump to use the bureau as a partner for consumer protection initiatives including capping credit card interest rates.
DOGE takes a bigger bite
Despite its lofty title, Elon Musk’s so-called Department of Government Efficiency had faced a big question about the range of its powers. How much authority could an advisory panel have in actually cutting government spending?
Over the weekend, the answer turned out to be a lot, proving how much influence the tech mogul is wielding inside the Trump administration so far.
Musk claimed credit for the seemingly imminent demise of U.S.A.I.D. “We’re shutting it down,” he said at an X Spaces event early on Monday, saying that he had spoken with President Trump about dismantling the U.S. Agency for International Development, which Musk has repeatedly attacked, often citing conspiracy theories. It came after two top officials at the aid agency were put on administrative leave for denying Musk representatives access to a secure area of the agency to get classified information, The Times reports.
Agency employees based in Washington were told to work from home on Monday and to attend a meeting Tuesday where they’re expected to be informed of sweeping work force reductions, The Times reports.
And his team now has access to the Treasury Department’s payments system, which sends money to federal contractors, Social Security and Medicare recipients, those who are owed tax refunds and more.
The move gives his panel extraordinary insight into government spending — and comes after a career Treasury official was put on leave for refusing to give access to Musk’s representatives. (That official has since retired.)
The news solidifies Musk’s status as a power to be reckoned with. He has boasted that the panel’s employees, full of young engineering types, were working “120 hours a week.” More important, he still has the backing of President Trump, who on Sunday praised the billionaire as “very smart.”
Musk’s critics say that he risks getting a leg up on competitors with his growing power, but corporate America appears not to be taking any chances. A growing number of companies, including Amazon, Boeing and United Airlines, have announced plans to work with Musk-owned businesses, though some have been in the works for months.
Meta, Dropbox and Ackman consider leaving Delaware
When a Delaware judge ruled against Elon Musk in a shareholder lawsuit that cost him a $50 billion pay package, he pledged to reincorporate elsewhere.
Now, count Meta, Dropbox and even Bill Ackman among those who are at least weighing plans to move elsewhere. Nevada and Texas are the new favorite destinations. (While Musk wasn’t the first to complain, he was the loudest.)
Delaware has been known for decades as a state with business-friendly tax laws and a speedy and sophisticated court system, but it may have lost its charm, DealBook’s Lauren Hirsch reports.
A recap: Musk set the tone early on. The world’s richest man has gone up several times against Kathaleen McCormick, the Delaware Chancery Court’s chief judge. McCormick effectively forced him to follow through with his acquisition of Twitter in 2022, and she twice overturned his lofty Tesla pay package.
Musk soon reincorporated Tesla in Texas. McCormick’s decision prompted other founder-managed companies to consider doing the same.
The tension has rattled Delaware. A move last year by the state’s General Assembly to remain attractive to business by allowing board members to give important shareholders key governance power — like vetoing a merger — caused an uproar. Such contracts are common practice among venture-backed firms, but not in public companies. Delaware stalwarts argued that the legislature had given into big money, while the law’s defenders argued that it would help avoid costly litigation.
A former Delaware judge, William Chandler, gave a fiery speech on the House floor attacking Judge McCormick and another Delaware judge, Travis Laster.
“Right now, the corporate market is not feeling good about Delaware,” Chandler said, pinning that sentiment on “the uncertainty and unpredictability of a few decisions by just two judges.”
The Delaware exodus isn’t stopping anytime soon. There are still exits to come, DealBook hears — though, for now, it’s more likely to be a dribble than a flood. The business world has been anticipating a looser regulatory environment under President Trump, and moving into even friendlier business states now seems to be part of the playbook.
A tale of two chatbot diplomats
Silicon Valley has been abuzz trying to figure out how well DeepSeek, the Chinese artificial intelligence phenomenon, stacks up to well-funded American rivals like ChatGPT.
DealBook decided to give it a shot.
We asked both to come up with a solution to another topic on our minds: President Trump’s apparent focus on taking control of Greenland from Denmark. It was remarkable to see how each program (one from China, the other from the United States) thought through the issues and came up with fairly similar approaches.
The prompt:
Help me think about the best way for President Trump and Denmark to resolve their standoff over the future of Greenland, since Trump wants to own the island — and isn’t willing to rule out military or economic force to take it — and Denmark would likely call on the EU to help defend it if it’s attacked. The goal is to avoid international conflict.
Both chatbots offered multistep diplomatic strategies for working out peaceful resolutions:
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DeepSeek R1 offered steps such as “de-escalation and clarification,” including public commitments to peaceful solutions; coming up with a U.S.-Greenland-Denmark investment partnership; relying on NATO; and signing a resource-sharing treaty.
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ChatGPT o1’s ideas included ensuring the presence of a Greenlandic voice at the negotiating table; shifting the discussion to partnership from ownership, including economic ventures for rare earth minerals and other resources; coordinating with NATO and the European Union; and ruling out military and economic force.
DeepSeek R1 concluded that its approach provided wins for the United States, Denmark and Greenland, as well as for the rule-based international order. “This approach balances realism with diplomacy, transforming a contentious issue into a model for cooperative problem-solving in the Arctic,” it wrote.
ChatGPT o1 said that the key to solving the standoff was “a shift away from a transactional ‘purchase’ concept that disregards local sovereignty and international alliances.” In general, the chatbot advanced more of an argument, with a consistent thesis.
THE SPEED READ
Deals
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A federal judge cleared Tempur Sealy’s $4 billion takeover of Mattress Firm, rejecting a bid by the Federal Trade Commission to block the deal. (Bloomberg)
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The activist investor Starboard is said to have taken a stake in Becton Dickinson and called on the medical device maker to spin off its life sciences division. (FT)
Politics, policy and regulation
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