Breaking Down Trumponomics 2.0

Tariffs, taxes … and Musk

In the week when Vice President Kamala Harris started to spell out some of her economic policies, it was Donald Trump’s turn on Thursday to set out his fiscal agenda. It comes as slowdown concerns grow ahead of Friday’s jobs report.

At the center of the proposals, which he outlined at the Economic Club of New York, are higher tariffs, lower taxes and more Elon Musk. Much of these cover familiar ground and again raise as many questions as they sought to answer about how he would govern if re-elected. Still, his remarks could be a prelude to what he’ll be grilled on at next week’s debate with Harris.

Trump sought to draw a sharp contrast with Harris on who would be better for the economy. “I call it America First. This is the policy that built this country, and this is the policy that will save our country,” he told an audience that included JPMorgan Chase’s Jamie Dimon, Blackstone’s Steve Schwarzman and the hedge fund mogul John Paulson.

Trump wants to lower taxes on companies and to rescind much of President Biden’s Inflation Reduction Act, a law popular with many business chiefs. He has also tried to label Harris as a left-wing extremist.

Harris is trying to keep both progressives and her corporate backers on side. For instance, she has signaled she will largely keep Biden’s signature industrial policies but has scaled back the size of a proposed increase in the capital gains tax.

Whoever wins in November will most likely inherit a slowing economy. But experts warn that Trump’s policies could push the U.S. into a trade war that would raise inflation and weaken the economy. Goldman Sachs economists this week said a Harris presidency would be better for growth than a Trump 2.0 would be.

Here are other takeaways from Trump’s speech:

• He wants to create a commission to oversee federal spending to save “trillions,” an idea first floated by Musk. Trump also wants the tech mogul to run it, but that could create potential conflicts of interest: SpaceX, Musk’s rocket company, is a major government contractor.

• He would lower the corporate tax rate to 15 percent from 21 percent. The catch: To supercharge manufacturing, the break would only be extended to companies that make their products in the U.S. and keep jobs onshore. But in a world of global supply chains, who would qualify?

• Trump painted tariffs as the panacea to America’s economic woes. He has long threatened to impose big levies to appeal to working class voters who fear their jobs will go overseas. But Trump now asserts that tariffs could also be a revenue generator that would even somehow help families afford soaring child-care costs. He also paid homage to the “highly underrated president, William McKinley,” a 19th-century champion of tariffs (until he wasn’t).

• Trump also promised lower interest rates. That too came with no explanation, as monetary policy is the job of the Fed. But Trump has threatened to break with the longstanding principle of central bank independence, saying he would like a greater “say.” (In 2019, the last time he spoke at the prestigious club, he also vented about the Fed’s interest rate policy, part of his long-running feud with the central bank and its chair, Jay Powell.)

HERE’S WHAT’S HAPPENING

The owner of 7-Eleven rejects a big foreign takeover bid. Seven & i Holdings, the Japanese parent company of the convenience store chain, said that a $38 billion offer by Alimentation Couche-Tard of Canada was too low and could draw opposition from antitrust regulators. (That said, it didn’t completely close the door to a sale, which would be the biggest overseas takeover of a Japanese company.) Seven & i will probably face pressure to come up with a more compelling stand-alone plan.

Saudi Arabia and other oil producers extend production cuts. The kingdom and seven other members of the OPEC Plus cartel unexpectedly delayed plans, until at least December, to begin increasing production. The move came in response to a drop in oil prices tied to weaker global demand and an increase in supply from non-OPEC producers. The price of Brent crude, the international benchmark, rose slightly on the news, but remained well below its 2024 peak.

The Transportation Department opens an inquiry into frequent-flier programs. The department is examining whether the offerings from the four biggest U.S. airlines — United, Delta, American and Southwest — hurt consumers through practices including devaluation of rewards, extra fees and dynamic pricing. Across the Atlantic, Britain’s Competition and Markets Authority is investigating whether Ticketmaster adequately disclosed its use of dynamic pricing in the sale of tickets for the Oasis reunion tour.

The power behind the Paramount throne

Larry Ellison made his name, and fortune, co-founding and leading the tech giant Oracle. But the 80-year-old is adding another title, thanks to his son’s deal-making: controlling shareholder of Paramount, replacing Shari Redstone in the role.

The elder Ellison’s participation in financing the $8 billion takeover of Paramount by David Ellison’s Skydance has long been public. But the role he played in the new company’s hierarchy has only now come to light, raising big questions about who’s really in the driver’s seat at the media behemoth.

What we now know. The group led by Skydance is buying the majority of the controlling interest in Paramount currently held by Redstone. A filing with the F.C.C. applying to transfer control of Paramount’s TV stations breaks down the company’s new ownership:

• Pinnacle Media, an Ellison family investment vehicle, will own 77.5 percent of National Amusements, which owns Redstone’s controlling stake.

• An entity affiliated with RedBird Capital Partners, an investment firm backing Skydance, will control the remaining 22.5 percent

• Sayonara, a media company controlled by the Lawrence J. Ellison Revocable Trust, will attain control of Paramount’s licensed television broadcast stations. Larry Ellison is listed as the controlling shareholder of that trust.

Who’s in charge? Skydance has said that David Ellison, who is set to be Paramount’s C.E.O., would have operational control of Paramount after the deal closes. But the news raises questions about how much influence his father will exert.

“Maybe Larry Ellison will give David free rein,” Brian Quinn, a professor at Boston College Law School, told DealBook. “Perhaps, Larry will call all the shots, or maybe just the big shots.”

DealBook has another big question: What happens to Larry Ellison’s controlling stake when he dies?

Larry Ellison could face more scrutiny. The tech mogul has long been an influential figure in tech and finance circles. A prolific Republican donor, he hosted a fund-raiser for Donald Trump in 2020, but more recently backed rival candidates in the G.O.P. presidential primary.

Intel’s murky future

What will happen to Intel? The Biden administration bet big on the storied chip maker, seeing it as a key to reviving the domestic semiconductor industry.

But a run of horrid earnings and setbacks has raised questions about Intel’s future ahead of a crucial board meeting next week to figure out how to reverse a decline that’s being closely watched in Silicon Valley and Washington.

Qualcomm is said to be looking at buying pieces of its rival. The chip maker has looked at potentially acquiring parts of Intel’s design business, Reuters reports. The P.C. client unit, which makes laptop and desktop computer chips, is of particular interest.

Intel is weighing drastic changes. The company said it would cut 15,000 jobs, scrap its dividend and slash capital spending after reporting disastrous second-quarter results. Intel could also trim its stake in Mobileye, the autonomous driving tech company, or sell businesses like Altera, its programmable chip unit.

A.I. is one big reason Intel is lagging behind its peers. Pat Gelsinger, Intel’s C.E.O., is three years into a five-year turnaround plan. But last year, the board told him to ramp up the company’s A.I. efforts or the company could miss the boat, The Financial Times reports. Talks with SoftBank to produce an A.I. chip to take on Nvidia failed.

Investors have punished Intel, wiping about $70 billion off its value over the past year during an A.I. boom that added almost $1.4 trillion to Nvidia’s market value.

Will Intel split up? The company is considering various options to turn itself around, including separating its product-design and manufacturing businesses, or even selling its foundry division. Investors cheered the news, sending shares up almost 10 percent after Bloomberg reported the potential plans.

Ben Thompson, author of the influential tech newsletter Stratechery, says a split is the only solution, an idea he pushed in 2021 when Gelsinger became C.E.O. Whatever happens, the likelihood that Intel will lead an American chip-making renaissance are in doubt. “The tech world has moved on from Intel; the only chance for U.S. leading edge manufacturing is to do the same,” he wrote in a note this week.

The venture capitalists who are thinking small

The world of venture capital is dominated by mega-firms that have raised billions of dollars across scores of various funds. That has led to a tsunami of cash pouring into start-ups, often forcing them to grow fast to justify those investments.

That phenomenon has also led to disastrous results, prompting some investors to push back. Among them is Nick Chirls of Asylum Ventures, which oversees a $55 million fund dedicated to younger tech companies. He explained his approach to The Times’s Erin Griffith:

Most venture capital funds raise money from outside investors and deploy it in dozens of start-ups within two to three years. The start-ups then raise numerous rounds of funding, with the aim of selling or going public and earning a return for investors.

But Asylum plans to make only four or five investments a year over a longer period, Mr. Chirls said. It will also focus on backing start-ups that need only a small amount of money — as little as $500,000 — to get going.

“Those are rare,” Mr. Chirls said. “There are not hundreds of them.”

He said he was inspired by A24, the independent movie company known for hits like “Everything Everywhere All at Once,” which fosters small, unusual projects that the big Hollywood studios won’t touch.

That said, many venture capital firms are still eager to shower huge sums on start-ups, especially if they’re focused on artificial intelligence. But other investors are applauding the think-small approach. “We’re still a small minority,” Bryce Roberts, who runs Indie.vc, told The Times. “My hope is it starts to validate this approach.”

THE SPEED READ

Deals

• Salesforce agreed to buy Own, a start-up that provides backup applications for cloud computing applications, for $1.9 billion. (Bloomberg)

• Family offices, which have become bigger players in investing, are expected to add $2 trillion in assets by 2030, according to a new report. (CNBC)

Elections, politics and policy

• A federal judge temporarily blocked another aspect of President Biden’s student debt relief plan, siding with seven Republican state officials who opposed it. (NYT)

• Federal agents seized the phones of several top New York City officials, including the police commissioner, further destabilizing the administration of Mayor Eric Adams. (NYT)

Best of the rest

• A federal judge rejected a key part of a proposed $2.8 billion settlement for an antitrust lawsuit against the N.C.A.A., potentially endangering the landmark agreement. (NYT)

• China is combining two state-owned securities brokerages to create a bigger homegrown competitor to Wall Street giants. (Bloomberg)

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