What Is Trump’s Tariff Endgame? Recession Fears Grow.

Worst offenders

Broad new tariffs on U.S. trading partners went into effect a few hours ago, including huge penalties for those on President Trump’s “worst offenders” list. Up next: the threat of additional levies on pharmaceutical imports.

The moves have hit jittery investors in the gut yet again, with bonds, Asian and European stocks and oil sharply lower on fears for the global economy.

Business leaders and policymakers are left to wonder: Is the president serious about cutting deals — or is the endgame to usher in a new protectionist era of global trade?

Trump continues to signal that more pain is ahead. “Sometimes you have to mix it up a little bit,” the president said on Tuesday, in remarks that framed his tariff policy as an eventual boon for American manufacturing and the economy, if also “somewhat explosive” for markets.

He also appears intent on ratcheting up his conflict with China, including a 104 percent tariff on Chinese imports. (China threatened an additional 50 percent duty on U.S. imports.) The tit-for-tat measures by Washington and Beijing are threatening collateral damage for global supply chains.

Speaking of explosive market developments …

• S&P 500 futures point to another volatile day. On Tuesday left the benchmark index a whisker away from a bear market. Assessing the sharp sell-off, JPMorgan Chase’s recession indicator spiked, as did the Cboe Volatility Index, known as Wall Street’s fear gauge. Just in: Delta Air Lines reported first-quarter results, saying “growth has largely stalled” on economic uncertainty, and declined to give a full-year outlook.

• Of increasing concern for many is the sharp sell-off in Treasury bonds and notes since Friday, which is bad news for American borrowers. “I haven’t seen moves or volatility of this size since the chaos of the pandemic in 2020,” Calvin Yeoh, a portfolio manager at the hedge fund Blue Edge Advisors, told Bloomberg. Keep an eye on Wednesday’s 10-year Treasury bond auction.

• Futures tied to West Texas Intermediate, the U.S. oil benchmark, have slipped below $56 as investors worry about a worldwide economic slowdown drying up demand. That’s well below the “all-in” break-even price for domestic producers, according to the research firm Rystad Energy, and could strain relations between Trump and some of his Big Oil backers. (So far, they’re staying quiet publicly.)

• China’s offshore yuan fell to a new low overnight, leading market watchers to question whether Beijing was intentionally devaluing its currency — something Trump has complained about — to lessen the hit from tariffs.

Trump and Treasury Secretary Scott Bessent say trade talks are happening, but the timeline is unclear. Japan and South Korea appear to be first up, but scores of other countries and regions, including China and the European Union, are in limbo.

DealBook has questions:

• If you’re looking to cut a deal with Trump, what is your next move? Given the falling markets, growing signs of a potential recession, anxiety among Republican lawmakers and donors, and increasingly public infighting among Trump’s inner circle, why not let the drama play out further before negotiating?

• If you’re a business, do you hold off on investments (including in new U.S. factories), hiring, and deal-making on the hopes that pressure will force the White House to change course?

But waiting could be a huge gamble, especially as Trump’s hawkish trade advisers like Peter Navarro and Steve Miran lay out ground rules for negotiating, which some commentators have likened to “a shake-down operation.”

A speech on Monday by Miran, the chair of the White House Council of Economic Advisers, at the nonpartisan Hudson Institute has drawn significant attention. Miran offered countries a five-point “burden sharing” plan to get in the administration’s good graces. One guideline read, “Simply write checks to Treasury.”

HERE’S WHAT’S HAPPENING

The Justice Department disbands its cryptocurrency enforcement unit. Todd Blanche, the deputy attorney general, said crypto investigations would focus more narrowly on crimes like fraud, drug trafficking and terrorism. The Trump administration has rolled back regulation of the crypto industry, which heavily backed President Trump’s campaign last year, and the Trump family has also expanded its cryptocurrency businesses.

Two major law firms seek to permanently block executive orders attacking them. Jenner & Block and WilmerHale asked federal judges to immediately rule on whether Trump’s orders, which treat them as national security risks and essentially bar them from representing companies with government contracts, are unconstitutional. The filings are the latest effort by the legal industry to fight back against a retribution campaign by Trump.

The Trump administration freezes nearly $2 billion in funds for Cornell and Northwestern. The move, which largely involves grants from and contracts with several government departments, is the latest blow by the administration against higher education institutions. (Northwestern is the first non-Ivy League school to be targeted.) Both universities have faced accusations that they haven’t done enough to combat antisemitism or racial discrimination.

Andreessen Horowitz is said to pursue $20 billion for its latest fund. The giant venture capital firm is hoping to capitalize on investor interest in artificial intelligence start-ups to raise its biggest fund, according to Reuters. Andreessen Horowitz’s effort comes amid a sharp slowdown in fund-raising: Firms raised about $169.7 billion last year, down 20 percent year-on-year, according to PitchBook.

Trump upends the war on talent

Economists warn that President Trump’s assault on higher education and the sciences, including freezing or canceling billions of dollars in government-funded research and revoking student visas, could set U.S. innovation back decades.

Europe’s venture capitalists, tech entrepreneurs and research institutions are moving quickly to capitalize on the tumult, Vivienne Walt reports. Numerous initiatives are underway to woo researchers who have been defunded by the Trump administration — and they’re racking up results.

Leading European universities are in high demand. Beginning last month, “we started to be contacted by scientists and institutions in the U.S.,” said Mehran Mostafavi, vice president of research for Université Paris-Saclay, a top research center in artificial intelligence and quantum computing. The university is set to announce 20 new tenure-track professorships, according to Mostafavi, and five posts specifically for American scientists.

Ivy League résumés have begun rolling in from scientists stripped of federal funds. “It is not yet a wave, but we feel it increasing,” Mostafavi told DealBook.

Aix-Marseille University in France has been flooded with queries from researchers at Stanford, Yale, NASA and the National Institutes of Health as it dangles lucrative grants for those seeking “scientific exile.” Vrije Universiteit Brussel and the Pasteur Institute in Paris are among those luring Americans.

“This transition is happening,” Shawn Park, a computer science major at Carnegie Mellon University, told DealBook. He was offered a research post at Aalto University in Finland, after spending the past three months in a Helsinki lab. Undergraduates from Harvard, Stanford and M.I.T. are set to begin working in the same lab next month, he added.

Businesses see potential gains. Venture capital firms say that those students could bolster a badly needed pipeline of talent and innovative ideas to better compete with Silicon Valley.

Funding cuts by Trump and Elon Musk’s so-called Department of Government Efficiency have driven calls to action in Europe, said Lena Thiede, a co-founder and general partner at Planet A Ventures, a Berlin-based investor in green-tech start-ups.

“There is much more appetite now for bolder innovation, bolder solutions,” she told DealBook.

Homegrown funding remains an issue. That was true before Trump’s trade war sent global markets into free fall, and put the freeze on I.P.O.s. “Companies are founded here,” said Suvi Collin, who heads the legal and E.S.G. departments for the Finnish Venture Capital Association. “But when they grow and scale, they look to the U.S.”

Still, many on the continent hope that the uncertainty about America will begin to reverse that migration trend, she said.

Seen and heard, Capitol Hill edition

Republicans and Democrats alike grilled the U.S. trade representative, Jamieson Greer, as he spoke before the Senate Finance Committee about President’s Trump’s tariffs. It was brutal. (Greer is expected to testify before the House Ways and Means Committee on Wednesday at 10 a.m. Eastern.)

• “Whose throat do I get to choke if this proves to be wrong?” — Senator Thom Tillis, Republican of North Carolina

• “A good day in hospice.” — Senator Mark Warner, Democrat of Virginia, dismissing Tuesday’s initial rebound in stocks. The S&P 500 subsequently tumbled, closing a hair’s breadth away from a bear market.

• “The U.S. economy has gone from the envy of the world to a laughingstock, in less time than it took to finish March Madness.” — Senator Ron Wyden, Democrat of Oregon

• “There’s going to be a lot of collateral damage, and people are already feeling that pain.” — Senator Ron Johnson, Republican of Wisconsin

Betting on a new consumer products empire

The razor brand Harry’s made a name for itself soon after its founding by buying a German blade factory in 2014, as it sought to take on established rivals like Gillette and Schick. Now, its founders are rechristening the company as Mammoth Brands, with the intent of turning it into a consumer packaged goods giant, Michael de la Merced is first to report.

That involves striking acquisitions to add brands to its stable — and, perhaps, braving the I.P.O. market as well.

The backstory: Over more than a decade, Harry’s has grown to become the second-biggest brand in the U.S. men’s shaving market, according to Euromonitor, behind Procter & Gamble’s Gillette but outselling Schick and a direct-to-consumer rival, Dollar Shave Club.

But it has also added other brands, including homegrown ones, like the women’s shaving company Flamingo, and bought others, like the deodorant maker Lume.

The result: Mammoth collected some $835 million in revenue and nearly $100 million in pretax forma earnings last year, with sales having grown more than 20 percent over the past five years.

Mammoth’s founders want to deploy their playbook again, using the experience of growing e-commerce operations and striking partnerships with the likes of Target and Walmart to bolster sales. A big part of that plan is to buy promising start-ups, essentially replicating the success with Lume.

“We love the idea of having an ecosystem where a bunch of founders are running around building brands,” said Jeff Raider, one of Mammoth’s founders.

Deals factor into Mammoth’s future in other ways. The company, then known as Harry’s, agreed to sell itself to Edgewell, which owns Schick and Wilkinson Sword, in 2019 for $1.37 billion — only for that transaction to be blocked on antitrust grounds.

That appears to have left an I.P.O. as a next big move. The company has already filed confidentially to go public, according to people with knowledge of the matter, who declined to speak publicly about the company’s strategy. Andy Katz-Mayfield, Mammoth’s other founder, said that an I.P.O. was “the most likely outcome” someday, but that Mammoth was in no rush.

He added that the company had been able to finance its own growth, apart from a $155 million fund-raising round in 2021 to help finance the Lume acquisition.

Still, Mammoth will have to navigate some bumps, including President Trump’s tariffs, that could affect its international supply chain. Katz-Mayfield said that the company could ride out any shocks: “We sell staples,” he said. “The good news is that people tend to buy that stuff in good days and bad.”

THE SPEED READ

Deals

Politics, policy and regulation

• Trump signed executive orders seeking to bolster the ailing U.S. coal industry, including loosening emissions restrictions on plants. (NYT)

• Representative Andy Harris, the Maryland Republican who leads the hard-right House Freedom Caucus, said he continued to oppose a budget proposal backed by Trump and Republican leadership. (Politico)

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