Losing leverage
If investors follow any adage about the markets, it’s this: Don’t fight the Fed.
But President Trump has repeatedly challenged — or outright ignored — that maxim. Markets have responded with fury, undercutting his negotiating position on tariffs as the White House seeks to reach scores of trade deals with other countries, with little progress in sight.
The latest: S&P 500 futures were rebounding on Tuesday morning. But the index is still nursing hefty losses after Trump demanded that the central bank lower rates “NOW” despite the Fed’s reticence to do so anytime soon.
He also called Jay Powell, the Fed chair whom he has repeatedly attacked, “a major loser.”
Undermining the bedrock notion of Fed independence will handcuff the central bank’s efforts to fight inflation, warned Austan Goolsbee, president of the Chicago Fed. Trump’s broadsides have also rattled investor confidence in the dollar and in long-dated Treasury notes and bonds. Gold hit another record on Tuesday morning, briefly topping $3,500 an ounce.
Analysts warn that a capital flight from U.S. financial assets isn’t over as concerns grow that Trump’s trade war could plunge America into recession.
“Dollar weakness is here to stay,” Kamakshya Trivedi, a strategist at Goldman Sachs, told Bloomberg Television on Tuesday. The dollar’s roughly 9 percent decline this year leaves U.S. consumers with less spending power — and that’s before they contend with Trump’s new import duties and a slowing economy.
Companies are also fighting on multiple fronts. Earnings are largely expected to hold up this reporting season, but some companies are refraining from issuing financial forecasts because of tariff uncertainty.
Company announcements so far suggest “that any adverse impacts from tariffs may be felt a little later in the year or even next year,” Lori Calvasina, head of U.S. equity strategy research at RBC Capital Markets, wrote in a research note Tuesday morning.
She added that “investors are rotating out of the U.S. assets into other geographies.”
Could America’s deteriorating economic outlook scramble Trump’s trade calculus? The president reiterated on Monday that talks with other nations were going well and that “everybody wants to negotiate.”
But Prime Minister Shigeru Ishiba of Japan and President Claudia Sheinbaum of Mexico suggested that they were in no rush to make concessions. That could put more pressure on the White House to score some quick wins — though perhaps at a cost — to change the gloomy narrative.
DEALBOOK WANTS TO HEAR FROM YOU
We’d like to know how the tariffs are affecting your business. Have you changed suppliers? Negotiated lower prices? Paused investments or hiring? Made plans to move manufacturing to the U.S.? Please let us know what you’re doing.
HERE’S WHAT’S HAPPENING
The Justice Department calls for Google to be broken up. The Trump administration has demanded that the company sell its Chrome web browser after a federal judge ruled against the tech giant in a landmark antitrust trial. Google could also be forced to sell off parts of its ad tech business after it lost a judgment in another antitrust case. In related news, the F.T.C. sued Uber for “deceptive billing” practices.
Harvard sues the Trump administration over funding freezes. The university accused administration officials of violating its constitutional rights by withholding billions in funding for refusing a list of onerous demands. (Trump officials are also deliberating whether to revoke Harvard’s tax-exempt status and threatening to block visas for international students.) Harvard’s lawsuit escalates a battle with President Trump, who has promised to “reclaim” elite universities.
How much longer will Elon Musk stay in the government? The weekly requirement that federal employees submit five accomplishments every week — which the billionaire announced with fanfare in February — is increasingly falling by the wayside, The Washington Post reports. Musk is planning on stepping down because of unwanted attention stemming from his government role, The Post adds; he is under pressure to resume focusing on Tesla, whose earnings report, due out on Tuesday, could be what one analyst calls a “code red situation.”
Exclusive: Chobani’s billion-dollar bet on growth
Over two decades, Chobani has become a giant in the American dairy industry, branching out beyond Greek-style yogurt to oat milk, creamers, coffee beverages and more.
To keep up with what it says is breakneck growth, the company is planning to invest at least $1.2 billion to open a plant in New York State that it says will be among the biggest dairy product factories in the U.S., Michael de la Merced is first to report.
It’s a sign that Chobani expects yet more growth, which could include another attempt at going public.
What’s happening: Chobani and New York State plan to announce on Tuesday that the company is opening a million-square-foot factory in Rome, N.Y., that will be able to make one billion pounds of dairy products a year.
The expansion is expected to create about 1,000 jobs and nearly double Chobani’s work force in the state.
Growth made the big investment necessary, according to Hamdi Ulukaya, Chobani’s founder and C.E.O. He shared some financial metrics with DealBook, including a 17 percent rise in net sales last year, to $2.96 billion, and a 26 percent jump in adjusted pretax earnings, to $509 million. (In 2023, it also bought the coffee company La Colombe for $900 million.)
“We’ve been growing, but that has accelerated dramatically over the last few years, eating up a lot of our capacity,” Ulukaya said. “These are the preparations for growth that’s coming and that we’re experiencing.”
That kind of growth made New York officials eager to fight hard for the factory, given what they said was robust competition. (Chobani already has a factory in Idaho, which it announced last month it was expanding at a cost of $500 million.) New York offered nearly $100 million in grants and tax credits — contingent on meeting performance milestones — which state leaders said was a sensible trade.
Given Chobani’s roots in New York, Gov. Kathy Hochul told DealBook, “I’ve always tried to make them feel special and significant.”
What’s next for Chobani? An I.P.O. — which the company pursued a few years ago before postponing — may again be in the future, according to Ulukaya. But he said that such a decision, which he acknowledged would benefit Chobani employees who own company stock, would have to wait while the company spends nearly $2 billion on manufacturing capacity.
Ulukaya added that the company remained committed to practices including generous employee benefits and hiring refugees and immigrants, a cause that the Chobani leader, himself an émigré from Turkey, has embraced.
“We cannot operate any other way,” he told DealBook, despite the Trump administration’s immigration crackdown. “To me, anybody is welcome.”
Beijing vs. Boeing
Companies are reeling from President Trump’s trade war with China. Few are bigger than Boeing.
The Washington-Beijing clash has clouded Boeing’s outlook for China, a key market, and could cast a shadow over its turnaround plan, Grady McGregor reports. Boeing and Beijing are tightly intertwined, and Trump’s trade policies could be another major problem for one of America’s largest exporters.
Expect tough questions from analysts and shareholders of the struggling plane maker ahead of an earnings call tomorrow and an annual shareholder meeting on Thursday.
A recap: Beijing last week ordered Chinese airlines to halt deliveries and cease new orders of Boeing jets, Bloomberg and The Wall Street Journal reported. In a sign of further escalation, a brand-new Boeing 737 Max jet earmarked for China was sent back to the United States, according to Reuters, and others reportedly could follow.
Boeing declined to comment publicly to DealBook. But in a February regulatory filing, the company said that if it was “unable to deliver aircraft to customers in China” or “obtain additional orders,” it could lose share in the world’s fastest-growing aviation market.
Tariffs are already bad news for Boeing, which builds all of its planes in the U.S. but relies on imported parts from Europe, Canada, Japan — and China. “Margins in this industry just don’t support it,” Richard Aboulafia, managing director of AeroDynamic Advisory, said of the tariffs hit.
China is critical to Boeing’s long-term growth targets. Boeing and its archrival, Airbus, see huge potential in the market. China will most likely buy more than 8,800 new planes in the next 20 years, Boeing projects.
China was hardly smooth flying to begin with. Airbus increased its market share lead over Boeing in China in recent years amid previous U.S.-China trade spats. And Boeing’s orders from China have plummeted since 2018 after the first of two deadly crashes of the problem-plagued 737 Max.
But the U.S. has some leverage. Beijing is investing heavily in its aircraft industry. The Chinese state-owned plane maker Comac, which released its first jet into commercial service in 2023, relies heavily on parts and know-how from Western plane makers, including Boeing.
If the U.S. wanted to bring China’s aircraft business to a halt, “they conceivably could,” Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, told DealBook. “That makes it quite risky for the Chinese.”
Other aviation experts note, however, that China has become more self-sufficient. A bruising trade war could be a catalyst for the nation to develop its own know-how in aviation. “China has been funding Comac in an attempt to unseat either Airbus or Boeing,” Chad J. R. Ohlandt, a senior engineer at RAND, told DealBook.
The Beijing-Boeing fight will be closely watched in the Oval Office. The Boeing jet is “the one manufactured export that the U.S. still has a huge trade surplus in,” Aboulafia said.
Another Big Law resignation
As the U.S. legal profession splits over how to handle attacks from President Trump, both the firms that have struck deals and those that are fighting back face an employee flight risk.
So far, many of the public resignations have come from associates, who often have more flexibility to move because they are earlier in their careers. At Paul Weiss, there was also the resignation of Steven Banks, the leader of the pro bono practice, who had served as special counsel for the past three years.
But at least in one case, the fallout is climbing the org chart. J.B. Howard, a counsel in the global litigation group at Cadwalader, has resigned over a deal the firm made with Trump, DealBook is first to report. (A counsel is a senior-level position but is not at the partner level.)
Lauren Hirsch obtained a copy of Howard’s resignation letter, which is excerpted below:
When I was admitted to the bar, I swore an oath not only to support the Constitution and the laws of the United States and Maryland, but also, critically, to “uphold the honor and dignity of the legal profession.” In my view, society licenses us with the privilege of practicing law, and of earning a livelihood from the practice of law, in exchange for a solemn and nonnegotiable commitment to preserve and fight for our system of laws, without which lawyers have no purpose or reason to exist.
The legal profession, the courts, and the rule of law are now under direct attack from a lawless administration determined to gut them — can any serious person argue otherwise? The individual and institutional price we lawyers will have to pay, and the sacrifices we will have to make, to hold the line against this aggression may be enormous, but I view them as commitments we made when we became lawyers. I believe we either pay the price and fight or we forfeit our license and moral right to practice law.
True, some have fiduciary duties to their law firms in the face of an arguably existential threat. But I believe we have a prior, and more fundamental, fiduciary duty to society to defend the rule of law, which itself faces an existential threat. There are no lawyers or law firms, and no duties owed to them, if an autocratic regime succeeds in stripping the legal profession of its independence. In my view, the deals now being cut are only emboldening that regime and further empowering it as, literally day by day, it gains more ground. I do not believe I can carry on at the firm knowing that I am now, in a sense, a party to one of these deals.
Howard declined to comment. A spokesperson for Cadwalader did not respond to a request for comment.
THE SPEED READ
Deals
-
The energy company Phillips 66 urged shareholders to reject a board challenge by Elliott Investment Management, accusing the activist hedge fund of a conflict of interest over its efforts to also acquire Citgo. (Reuters)
-
Nomura agreed to buy Macquarie’s U.S. and European public asset management businesses for $1.8 billion. It would be the Japanese financial giant’s biggest deal since it acquired an array of Lehman Brothers assets in 2008. (Bloomberg)
Politics, policy and regulation
-
European pension funds are dropping their reticence to invest in domestic arms manufacturers after the Trump administration signaled its reluctance to keep defending the continent. (NYT)
-
Conflicting messages by President Trump over daylight saving time has kicked off lobbying over the future of the annual time changes in the U.S. (Politico)
Best of the rest
-
The Chinese industrial giant CATL said it had leapfrogged a domestic rival, BYD, in automotive battery technology. (NYT)
-
The Oscars committee says it’s OK if filmmakers use A.I. Sort of. (NYT)
-
“Why It’s So Difficult for Robots to Make Your Nike Sneakers” (WSJ)
We’d like your feedback! Please email thoughts and suggestions to [email protected].
Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Ravi Mattu is the managing editor of DealBook, based in London. He joined The New York Times in 2022 from the Financial Times, where he held a number of senior roles in Hong Kong and London.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is an editor for the DealBook newsletter and writes features on business and how workplaces are changing.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Lauren Hirsch covers Wall Street for The Times, including M&A, executive changes, board strife and policy moves affecting business.
Edmund Lee covers the media industry as it grapples with changes from Silicon Valley. Before joining The Times he was the managing editor at Vox Media’s Recode.
The post How Trump’s Fed Fight May Undermine His Trade Negotiations appeared first on New York Times.
