Tariff pain spreads
After weeks of volatile trading and a blizzard of tariff threats and countermeasures, businesses and investors face one big question: Will a brewing trade war sink global growth?
Consider that the S&P 500 has cratered from a record last month into correction territory as President Trump’s protectionist policies continue to stoke uncertainty. The 10.1 percent fall since Feb. 19 is the seventh-fastest collapse into a correction since 1929, Bloomberg notes, and comes as voters begin to sour on Trump’s handling of the economy and C.E.O.s express alarm.
That puts added attention on Friday’s consumer sentiment survey, due from the University of Michigan at 10 a.m. Eastern.
Investors got a reprieve last night, with enough Senate Democrats appearing ready to back a government funding bill to avoid a federal shutdown. Stock futures were up on Friday.
But gold, a classic haven, rose above $3,000 an ounce, a record.
For now, the administration isn’t backing down. Treasury Secretary Scott Bessent said on Thursday that Trump’s trade policies would yield long-term growth gains: “I’m not concerned about a little bit of volatility over three weeks,” he told CNBC.
Steven Mnuchin, who was Treasury secretary during Trump’s first term, also played down recession concerns and urged investors not to “overreact.”
But even Tesla is bracing for pain. Elon Musk’s carmaker — whose shares have fallen roughly 40 percent this year — sent an unsigned letter to Jamieson Greer, the U.S. trade representative and a noted tariff hawk, warning that a trade war could have “disproportionate impacts” on its business, The Financial Times reported.
The company’s big concern: Retaliatory tariffs by U.S. trading partners could push up prices and hurt both its competitiveness and that of other major American manufacturers. Canada, China and the European Union have introduced countermeasures against Trump’s levies.
It signals how even companies that are close to Trump may speak out, too. Musk, who wields nearly unprecedented power as a top Trump ally, has effusively praised the president.
But he has notably stayed mum on tariffs, even though levies could hurt Tesla’s rivals more than his own company.
Others on the front lines of the trade fight are feeling more squeezed. Trump on Thursday threatened to put 200 percent tariffs on European alcohol imports — bad news for fans of Spanish Rioja wine and Aperol spritzes — if the European Union imposed counter-levies on U.S. whiskey and other American alcoholic products.
Shares in Campari, the Italian maker of Aperol, have sunk more than 9 percent this week.
HERE’S WHAT’S HAPPENING
The Senate is poised to approve a government funding bill, averting a shutdown. Senator Chuck Schumer of New York, the minority leader, reversed course and said he had gathered enough support to help the Republican-written legislation pass. Other prominent Democrats, including those from battleground states, said they favored blocking the bill as one of the few ways to oppose Trump’s agenda — but Schumer argued that a shutdown would only help President Trump and Elon Musk to further dismantle federal agencies.
Speaking of cuts: Judges order thousands of fired government workers to be rehired. Two federal court judges ruled that agencies had to reinstate tens of thousands of probationary employees who had been laid off unlawfully, in one of the most significant signs yet of judicial pushback to Trump’s government-gutting efforts. Separately, another judge ordered Musk and his cost-cutting team to turn over documents and answer questions in response to a lawsuit by 14 Democratic state attorneys general.
The Trump family is said to be in talks to invest in Binance. The discussions revolve around the family taking a stake in the U.S. arm of the crypto exchange, which had pleaded guilty to violating anti-money-laundering laws and whose founder, Changpeng Zhao, served time in prison, according to The Wall Street Journal. (It’s unclear whether a deal would require pardoning Zhao.) The talks further underscore the ties between the Trump family and the crypto industry, which spent millions to back Trump, a connection that critics have said represents a conflict of interest.
Goldman’s chief wants more clarity, too
Goldman Sachs’s annual letter to shareholders is out, and DealBook has highlighted key quotes from the bank’s C.E.O., David Solomon.
Solomon didn’t specifically call out Trump or his head-spinning tariff moves, but did acknowledge the recent market volatility:
Financial market participants continue to recognize the competitiveness of the U.S. economy and the opportunities for sustained growth. But as we have seen in recent weeks, the environment can shift quickly.
Global growth has been hampered by inflation, an escalation in potential tariffs, and the toll of geopolitical tensions and prolonged conflicts across multiple regions.
He wants more clarity from the Trump administration, something many C.E.O.s have been asking for:
While policy uncertainty is to be expected within the first few months of any administration, it’s important that policy positions become clearer so that businesses are able to make the decisions they need for longer term planning and investment. Many CEOs I engage with are evaluating the potential impact on their top and bottom lines, and as a result, we are seeing some of our corporate clients acting more cautiously until they have more clarity.
Solomon still thinks there’s an appetite for deal-making, despite a slow start to the year and indications from Trump’s regulatory enforcers that they’ll continue to crack down on deals:
Over the past year, when I would talk with CEOs, almost all of them felt burdened by the regulatory impact on their business. Following the results of the U.S. election last year, however, there was a meaningful shift in CEO sentiment, particularly in America. Given the expected change in the regulatory environment, the appetite for deal-making has increased, and that could spur further capital markets activity in 2025.
He suggested that Europe ease up on regulation, noting that growth there continued to lag behind that in the United States (a point that European Union leaders have also been grappling with):
When we speak with leaders from the region, we hear a renewed sense of urgency to unlock the forces of dynamism and innovation. My hope is that Europe’s leaders have the public support and political will to make the necessary structural reforms to increase growth.
Solomon also touted Goldman’s own strengths, citing the bank’s performance and discipline. He writes that Goldman has put itself on a “path to generating mid-teens returns through the cycle” and celebrated the return of 380 employees as “boomerang hires.”
CrossFit is for sale
CrossFit, the fitness brand owned by Berkshire Partners, is fielding bids on a possible acquisition.
The company announced its plans to “review a wide range of buyers,” according to an email sent to CrossFit gym owners this week, Calum Marsh is first to report for DealBook. CrossFit declined to comment on suitors, but confirmed it was being advised by Moelis & Company. Moelis declined to comment. CrossFit published the email just hours after DealBook inquired about the potential sale.
BeSport, a Swiss holding company, is the front-runner, according to people familiar with the matter. BeSport already owns several sports and fitness brands that have partnered with CrossFit, including the sports apparel brand Northern Spirit and the gym membership app Hustle Up. The president of BeSport, Florian Jullien, said it was “too early to talk about this,” but didn’t deny the potential merger.
A deal hasn’t been signed and talks could still fall apart. A transaction price couldn’t be learned.
CrossFit’s business has been shrinking. Founded in the 1990s by Greg Glassman, a former gymnast, as a training program focused on constantly varied, high intensity movements, CrossFit exploded in popularity in the 2000s, growing to more than 14,000 gyms.
But it has declined after a series of scandals and as other fitness fads gained ground. There are currently 10,000 affiliated gyms worldwide.
The fitness space has gotten more crowded. Several competitors in the marketplace have drawn athletes and gyms away from CrossFit. Hyrox had more than 150,000 people participate in its race events last year; the World Fitness Project, a functional fitness tour, has signed many top CrossFit athletes to its roster.
CrossFit has thin margins. In 2018, the company booked around $100 million in sales and around $15 million in pretax profit, according to financial documents viewed by DealBook. The company licenses its name to gym owners for an annual fee. While Berkshire raised those fees from $3,000 to $4,500 in 2024, revenues were down thanks to a steep decline in affiliated gyms.
Berkshire Partners, a Boston-based investment firm, along with the technology entrepreneur and CrossFit gym owner Eric Roza, acquired CrossFit in 2020 after Glassman faced a deluge of criticism in the face of accusations of racism and sexual misconduct. A profile of Roza in Men’s Journal in 2021 pegged its purchase price at $200 million.
Daniel Chaffey, who leads CrossFit’s international business, is closely involved in the deal and could take over as C.E.O. if BeSport buys the company, according to one of the people familiar with the matter. Chaffey declined to comment.
Griffin finally unveils specifics of his big N.Y.C. gift
You may remember that more than a year ago the billionaires Ken Griffin and David Geffen pledged $400 million to Memorial Sloan Kettering Cancer Center in what was the largest gift ever made in the prominent medical research hospital’s 150-year history.
The donation raised eyebrows in the world of philanthropy, not only because of its size but also because of who was giving it — two of the biggest donors to their respective political parties. Now we know what the two are paying for.
A reminder: Griffin announced the gift in December 2023 on ABC’s “Good Morning America,” joining Selwyn Vickers, M.S.K.’s chief executive, and Robin Roberts, the anchor and a cancer survivor. “All of us here dream of the day we end cancer,” Griffin said on air, adding, “I’m certain M.S.K. will play an important role in ending cancer in our lifetime.”
But neither Griffin nor Geffen would say what specifically the donation would fund, beyond it going toward cutting-edge research and treatments.
The pledge was also surprising, given Griffin’s move to Miami from Chicago — though he owned an apartment in New York — and his hope that the Florida city would overtake New York as a financial hub.
What’s being announced on Friday: The gift will help build a huge cancer facility, named after Griffin, in New York City. At a planned 31 stories and encompassing 900,000 square feet, it’s expected to tower over the hospital’s campus.
It will include more than 200 patient rooms, including 40 beds in an intensive care wing.
Griffin has become a prolific philanthropist, after making his fortune as the founder of the financial giant Citadel. He has given more than $2 billion to causes, including more than $500 million in gifts to Harvard, his alma mater; $125 million for what’s now known as the Kenneth C. Griffin Museum of Science and Industry in Chicago; and $50 million for a cancer research center tied to the University of Miami’s School of Medicine.
THE SPEED READ
Deals
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ByteDance and President Trump are said to favor having Oracle help run TikTok as part of any deal for the video app. (The Information)
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The real estate brokerage Compass is reportedly in talks to buy Berkshire Hathaway’s rival offering, in what would be the rare sale of a business owned by Warren Buffett. (WSJ)
Politics, policy and regulation
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The White House abruptly withdrew Dr. Dave Weldon, an ally of Health Secretary Robert F. Kennedy Jr. and a fellow vaccine skeptic, from consideration as head of the C.D.C. (NYT)
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“The case for a U.S. sovereign wealth fund” (Fortune)
Best of the rest
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Meta’s efforts to stop a former executive from promoting her tell-all memoir about the tech giant don’t seem to be hurting the book’s sales. (Fast Company)
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“Tesla Cybertruck deliveries are on hold as trims are flying off the ‘bulletproof’ truck” (Electrek)
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