Gaming Out Trump’s Next Tariff Moves

“A little disturbance”

For months, the debate gripping board rooms, Wall Street and world capitals was whether to take President Trump at his word on tariffs. For a while, the markets rallied as if he were just bluffing.

He wasn’t. In an address before Congress last night, Trump said that tariffs would protect American jobs and enrich the nation. He also acknowledged that “there will be a little disturbance. But we’re OK with that.”

What might a “a little disturbance” look like? DealBook has taken on the task of gaming out what could happen next. (A warning to free-trade advocates: this could be tough reading.)

More tariffs are coming, trade experts say. Few countries, or companies, will be spared. For example, if the tariffs on Canada, Mexico and China stick, then Europe will be next. Such a scenario is “unavoidable,” George Saravelos, the global head of FX Research at Deutsche Bank, said in a research note on Tuesday. European companies are already bracing for the next wave.

“Trump has appeared to be less amenable to carve-outs in this second term,” David Seif, chief economist for developed markets at Nomura, told DealBook. That could bode poorly, he added, for Britain, whose prime minister, Keir Starmer, met with Trump at the White House last week where a trade deal was discussed. “I don’t think Keir Starmer should just feel safe right now,” Seif said.

Expect more market turmoil. “These tariffs would represent a major negative global growth shock, sufficient to push many economies into recession,” Saravelos wrote, adding that it’s time to stop thinking of them as a negotiating tactic. (The recessionary risk for the United States may be remote, but concerns are growing about the tariffs’ potential stagflationary effects.)

Surrounded by tariff hawks like Peter Navarro and Jamieson Greer, two top trade advisers, Trump appears less interested in cutting deals. He has dangled a potential lifeline to foreign companies looking to set up operations in the U.S., but again last night he emphasized that tariffs were a tool to trim the trade deficit and generate revenue.

S&P futures were rebounding on Wednesday, as were markets in Europe helped in part by a huge “whatever it takes” stimulus package plan out of Berlin. That comes after a major global markets plunge on Tuesday.

Worth watching: Howard Lutnick, the commerce secretary, told Fox Business that Trump could offer relief to Mexico and Canada. He described it as a “meet you in the middle” deal — “it’s not going to be a pause.”

These levies have little precedent. If all of Trump’s tariffs “fully take effect, their size will dwarf the entirety of the tariffs Trump imposed during his first term in office,” Seif said. The speed and size of the measures — affecting roughly $1.5 trillion in U.S. imports — caught many off guard, adding further unpredictability. Already, targeted countries have vowed countermeasures and businesses are warning of supply chain disruptions and consumers pulling back on purchases.

Bottom line: “Trump believes that tariffs are good for the economy,” Seif said. “Trump believes that tariffs can be used to get a deal. But the main thing is that they are the policy. I don’t see any strong reason for him to pull back on them.”

HERE’S WHAT’S HAPPENING

President Trump addresses Congress. In a lengthy speech that was high on self-adulation and thin on details, Trump said that among his “highest priorities is to rescue our economy.” He also saluted the work of Elon Musk to trim the federal government, and gave shout-outs to companies like BlackRock (more on that below) as well as SoftBank, Apple and TSMC for pledging new U.S. investments. He announced a domestic shipbuilding initiative and said that Japan and South Korea planned to partner with the U.S. on a new natural gas pipeline across Alaska. But he also urged Congress to “get rid” of the CHIPS and Science Act, the Biden administration policy aimed at bolstering domestic semiconductor production, while pushing two long-shot targets: planting a flag on Mars and balancing the federal budget.

Trump hails a potential olive branch from Volodymyr Zelensky. “I appreciate that he sent this letter,” Trump told Congress, speaking of a message from the Ukrainian president signaling that Kyiv was open to signing a minerals deal. The letter came a day after Trump halted more than $1 billion in military aid to Ukraine after an Oval Office blowup. Earlier in the day, Zelensky posted on X that he was prepared to release Russian prisoners, pause drone and missile strikes, and declare a truce at sea, but only if Russia also pulled back.

Goldman Sachs goes down the org chart for job cuts. Leaders at the investment bank want to thin out the ranks of vice presidents, as it looks to cut as much as 5 percent of its work force, The Wall Street Journal reports. Goldman and other investment banks have sought to make their businesses more efficient, though these cuts are coming earlier in the year than usual.

Target says tariffs hurt business. In one of the first signs of the potential effects of Trump’s tariffs, Target said it saw a drop in February sales in part because of consumer fears about tariffs. Best Buy also acknowledged that shoppers would have to pay more because of the new import duties. The electronics retailer said the tariff hikes were hitting its vendors through the supply chain and that those added costs would probably be passed along to shoppers.

Some DOGE staffers are said to make six-figure paychecks. Members of the Elon Musk-led group known as the Department of Government Efficiency, including Silicon Valley coders, are drawing high government salaries, according to Wired. (One worker the magazine identified makes as much as $195,200; Musk previously said no one would be paid.) In other Musk news, the Commerce Department adjusted a government program to make it easier for states and municipalities to use government subsidies to buy Musk’s Starlink internet service.

Talking deals and Delaware in the Big Easy

It’s that time of year, when many of the M&A world’s top lawyers gather in New Orleans for what Andrew once called “the equivalent of Davos for the rainmaker crowd.”

While the conference, at Tulane University’s Corporate Law Institute, is taking place just after Mardi Gras in the Big Easy, there’s a lot weighing on the lawyers, bankers, P.R. advisers and others attending. Here’s a preview. (DealBook’s Michael de la Merced is on the ground to get the inside dish.)

M&A isn’t coming back as robustly as some had hoped. About 61 percent of deal makers surveyed by the P.R. firm Gladstone Place Partners said they expected transactions to be up modestly in 2025. The muted assessment follows the quietest January in several years.

Deal makers are still reckoning with Trump. About 63 percent of respondents to the Gladstone survey said the Trump administration would be the biggest factor affecting deal making this year.

Of keen interest to the lawyers and bankers assembled at Tulane is what to make of President Trump’s antitrust approach. While corporate leaders had expected him to adopt a lighter touch to regulating M.&A., his top competition officials have instead kept tougher Biden-era rules, potentially scrambling the calculus for takeovers.

What will happen to Delaware? The First State, home to much of corporate America, has been wracked by worries that it’s losing business to rivals like Texas. That’s in part because of the fulminations of Elon Musk over a judgment denying him a huge payout at Tesla, and in part because of concerns that the state has gotten too shareholder friendly.

Delaware state lawmakers have proposed legislation that would further protect controlling shareholders of companies and potentially limit shareholder lawsuits. The bill has drawn a polarized response from legal experts; expect plenty of discussion at Tulane — including from several Delaware judges.

Fink’s Panama play

Just over a year ago, BlackRock pushed into infrastructure investing in a big way when it bought General Infrastructure Partners for $12.5 billion, its biggest takeover in 15 years.

That deal helped unlock another major transaction for the money management giant, the $22.8 billion acquisition of ports in Panama and elsewhere owned by Hong Kong’s CK Hutchison Holdings. It may have also done something more important: help BlackRock and its chief, Larry Fink, score a point with President Trump.

The deal also looks to be a boon for Li Ka-shing, the Hong Kong billionaire who controls CK Hutchison. Its shares surged more than 20 percent on Wednesday.

The context: Baselessly claiming that China operated the waterway, Trump has repeatedly expressed interest in retaking control of the Panama Canal, which the United States ceded to Panama during the Bill Clinton administration. Trump’s assertion led him to put pressure on the Panamanian government, which withdrew from the Chinese Belt and Road infrastructure initiative.

At the same time, BlackRock has been a target for conservative critics for years because of its embrace of climate-minded investing and diversity, equity and inclusion principles. The firm has publicly played down both focuses recently.

Will the deal help both sides out? For Trump, it will put the ports on either side of the canal in American-led hands.

And for BlackRock, it’s a way to show it’s on board with Trump’s agenda. The Times reports that a consortium led by the firm began talks with CK Hutchison’s controlling family a few weeks ago. BlackRock officials including Fink and Adebayo Ogunlesi, who founded G.I.P. and now sits on BlackRock board, briefed Trump and other administration officials on the talks — and got their support.

The benefits for BlackRock are more than political. Fink bought G.I.P. to vastly expand his firm’s access to infrastructure investing opportunities, an increasingly popular strategy that tends to yield steady long-term returns.

Owning the business is what made the ports transaction possible: “BlackRock couldn’t have done it without G.I.P., and G.I.P. without BlackRock,” Ralph Schlosstein, chairman emeritus of the investment bank Evercore and a co-founder of BlackRock, told The Times.

THE SPEED READ

Deals

• ByteDance, TikTok’s Chinese parent company, is said to plan to buy back employee shares at a $312 billion valuation, up sharply from previous appraisals. (Bloomberg)

• The activist hedge fund Elliott Investment Management has reportedly nominated seven directors for the board of Phillips 66, escalating its fight against the oil refiner. (Reuters)

• Saudi Aramco is said to be mulling a bid for BP’s Castrol lubricants unit to merge it with the Saudi energy giant’s Valvoline business, which it acquired in 2023. (Bloomberg)

Politics, policy and regulation

Best of the rest

• “Why HR experts say Musk’s ‘5 things’ emails won’t work” (The Washington Post)

• All you need to get a one-on-one meeting with President Trump is $5 million. (Wired)

• Tesla sales plunged 76 percent last month in Germany, part of a wider Pan-European slump. Shares in the electric vehicle maker were higher on Wednesday in premarket trading, but initially dipped on the news. (NYT)

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