Investors Prefer the ‘Nice’ Trump, but Want Results

Trump’s sustainability problem

Business leaders and investors have warned for weeks that President Trump’s trade war is unsustainable, and that his recent attacks on the Fed risk market chaos.

Trump appears to be getting the message, to markets’ delight. But what does that mean for the president’s agenda, and for the economy?

Global stocks are rebounding on Wednesday after Trump retreated on two major points:

• He said he did not plan to fire Jay Powell, despite repeatedly threatening the Fed chair over his outlook for interest rate cuts. (Powell has said he can’t legally be fired.) Trump still weighed in on borrowing costs Tuesday — “it’s a perfect time to lower the rate,” he said.

• Trump said he was ready to play “very nice” in negotiations with China, which is high on his tariffs hit list.

Is Trump seeking an off-ramp from his trade fight? He admitted that his 145 percent levy on Chinese imports was steep. “It will come down substantially but it won’t be zero,” he said.

Perhaps he’s listening to moderate voices in his camp, including Scott Bessent. The Treasury secretary told investors at a JPMorgan Chase conference on Tuesday that the trade war with Beijing was unsustainable, and that both sides would need to de-escalate, according to Bloomberg.

That seems to be driven by a consistent message from the markets. U.S. financial assets have sold off recently, wiping out trillions of dollars in market value, whenever he threatens tariffs or lashes out at the Fed. The selling tends to ease whenever the administration eases off.

Even supporters want results from Trump’s hard-nosed approach. The president came into office promising quick wins — including peace in Ukraine, defeating inflation and wiping out the trade deficit — but has little to show for it. His yo-yoing tariffs moves have paralyzed businesses, and the I.M.F. now forecasts that it will wipe out a chunk of global growth this year.

Industry groups, including some representing the same sectors that Trump says would be bolstered by his protectionist policies, are pleading with the administration to ease up on import levies. Separately, the billionaire investor Dan Loeb and the Goldman Sachs C.E.O. David Solomon urged the president to, in Loeb’s words, “get some points on the board.”

But what would that look like? Agreements with Japan or India are looking the most promising, but could take months to hammer out. China is far more complicated: Bessent acknowledged that while levies on Chinese goods could come down, a comprehensive trade deal could take two to three years.

With patience wearing thin with business leaders and investors, that puts the administration in a tough negotiating position.

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.? Or have the moves helped your business? Please let us know.

HERE’S WHAT’S HAPPENING

OpenAI would consider buying Google’s Chrome browser. A company executive testified in the Google antitrust case that the ChatGPT maker would be interested in buying the popular web browser if regulators succeed in breaking up the tech giant. OpenAI also struck a deal with The Washington Post to feature its content in user queries.

A CBS News executive quits, claiming interference from its corporate parent. Bill Owens, the head of “60 Minutes,” announced that he would resign from the network’s flagship news program, telling staff in an internal memo that he no longer felt he could “make independent decisions,” according to The Times. Paramount, which owns CBS, is now in mediation with President Trump over his $20 billion lawsuit against CBS News; it is also seeking regulatory approval for its merger with Skydance.

Brussels hits Meta and Apple with big fines. The tech giants are the first to be penalized — Apple got hit with a €500 million ($570 million) fine, Meta with a €200 million punishment — under the European Union’s tough competition law, the Digital Markets Act. Worth watching: whether the Trump administration retaliates, after officials including Vice President JD Vance warned the bloc not to punish U.S. tech giants.

Could Harvard still cut a deal with Trump?

When President Trump attacked Harvard, it decided to fight. But in the months before, the university had frantically tried to make a deal to avoid a showdown, Rob Copeland, Maureen Farrell and Michael S. Schmidt report.

Harvard has now become a totem of resistance, but behind the scenes influential figures are pushing for some kind of settlement even as the university prepares for a legal battle with the administration. Others want to fight. Here, we break down where people stand.

For months, Harvard worked to avoid a confrontation. After Trump’s re-election, donors like the Citadel chief executive Ken Griffin had warned the school that there could be “stormy times ahead.” In March, Harvard hired Bill Burck, a lawyer who serves as an outside ethics adviser to the Trump Organization, to engage with the administration. Around the same time, a Harvard donor asked former Secretary of State Condoleezza Rice for advice. She said the school should think of safeguarding its funding rather than focusing on politics.

Harvard’s president, Alan Garber, reached out to alumni with ties to Trump, including Jared Kushner, the president’s son-in-law, and John Paulson, the billionaire hedge fund manager, to help broker a meeting. No meeting happened.

The board was shocked by the administration’s demands. Earlier this month, the board had received a list of preliminary requests from the White House, and the school took it as a good sign that the administration had not cut off funding, as it had done with Columbia. Penny Pritzker, the board’s senior fellow, was expecting a follow-up letter with next steps. Instead, the school received a list of far more onerous demands. (The Times has reported that Trump officials said the letter had been sent by mistake.)

Most board members agreed that they should fight, including Ted Wells, a high-profile partner at Paul Weiss, a firm that had made a deal with the administration just weeks before.

Still, some donors see battling Trump as a mistake. They include Paulson and Bill Ackman, the C.E.O. of Pershing Square, who played a key role in ousting Harvard’s previous president, Claudine Gay, over plagiarism allegations and concerns about the school’s efforts to counter antisemitism. On a call on Thursday, many donors told Pritzker and Garber that they should settle. Mike Bloomberg, a major donor, wanted to fight.

Only a few board members, including Joe Bae, a Republican and the co-C.E.O. of the private equity giant KKR, still want to explore a deal. Burck, Harvard’s lawyer, has also tried to persuade Harvard to restart talks with the administration.

So far the school has not restarted negotiations. Last week, the Trump administration made at least three attempts to restart talks with the school — to no avail.

“Mark was not investing in Instagram because he believed we were a threat to their growth.”

— Kevin Systrom, Instagram’s co-founder, testifying in the F.T.C.’s antitrust case against Meta that the tech giant had starved his business of resources after acquiring it in 2012. Systrom also said that Instagram had still grown more as part of Facebook than if it had remained independent.

Elon Musk is (sort of) back at Tesla

A 40 percent drop in market value. A 13 percent fall in global vehicle deliveries. A 71 percent plunge in quarterly profit. And half the country having a negative view of a once-beloved company.

Not that Elon Musk cited those reasons in telling analysts on Tuesday that he would be “allocating far more of my time to Tesla.” (The official reason: “The major work of establishing the Department of Government efficiency is done,” the billionaire said, though he added that even after he returns, he could still spend “a day or two per week on government matters.”)

Even if Musk were to spend more time at Tesla — remember that he has other businesses, including SpaceX and xAI — it’s still unclear whether his plans would be enough to revive the automaker’s fortunes.

It’s hard to overstate how bad the quarter was. Tesla’s earnings per share were 34 percent below analyst estimates. The company’s sales had double-digit drops in several markets, including the U.S. and China. And growing competition — including from both Chinese rivals and American ones — has forced the carmaker to offer discounts.

Still, Wall Street saw reason for hope. Shares in Tesla were up 6 percent in premarket on Wednesday. Investors have clamored for the company’s C.E.O. to spend more time fixing Tesla than cutting the federal bureaucracy.

Tesla executives also said the company would introduce a lower cost model in the first half of the year, addressing a longstanding worry from analysts.

Musk himself sounded a defiant tone. “We’re not on edge of death, not even close,” he told analysts.

“Musk read the room and finally took the right step,” Dan Ives, an analyst at Wedbush Securities who had repeatedly called for the entrepreneur’s return, told DealBook.

But there are also reasons for concern. Tesla said that President Trump’s tariffs would bite, especially at its battery unit, which relies on components from China. “I’ve been on the record many times saying that I believe lower tariffs are generally a good idea for prosperity,” Musk said. He later added, “I’ll continue to advocate for lower tariffs rather than higher tariffs, but that’s all I can do.”

And Musk warned that its much hyped Optimus robots could also be a casualty of the trade war, as China cuts exports of a crucial component — magnets made from rare-earth metals — in retaliation for Trump’s tariffs.

Musk reiterated his conviction that Tesla’s future lay in creating a fleet of robotaxis, claiming that the carmaker could more than catch up to rivals like Google’s Waymo. Given how many Teslas are already on the road, he hyperbolically claimed that his company could have a “99 percent market share, or something ridiculous,” of the autonomous vehicle market.

But analysts have repeatedly questioned the abilities of Tesla’s autonomous vehicle technology. Waymo has been offering paid rides for years; Musk’s company, by contrast, is aiming to start doing so in 2026. (The Information reported last week that Tesla executives had argued that the robotaxi business would lose money; Musk rejected that analysis.)

As bad as Tesla’s quarterly results were, they would have been far worse had the company not benefited from selling emissions credits to rivals. But that business could disappear under Trump, and while Musk supports such a move, it would further dent the carmaker’s results.

And while Musk played down anti-Tesla protests as “paid for,” without citing evidence, they appear unlikely to disappear completely, even if Musk spends less time at the so-called Department of Government Efficiency.

THE SPEED READ

Deals

• Boeing agreed to sell several digital businesses to the investment firm Thoma Bravo for more than $10.5 billion as it seeks to reduce its debt load. (NYT)

• Elliott Investment Management officially disclosed owning a stake of over 5 percent in BP, and is reportedly seeking more change at the struggling oil giant. (Bloomberg)

• In crypto news: President Trump’s media company is near a deal to introduce E.T.F.s, including crypto-focused ones; and a son of Commerce Secretary Howard Lutnick is reportedly teaming up with SoftBank and others to create a Bitcoin investment vehicle. (NYT, FT)

Politics, policy and regulation

• Treasury Secretary Scott Bessent predicted that an extension of Trump’s 2017 tax cuts could be completed by July 4. And administration officials are said to be weighing raising taxes on millionaires. (NYT, WaPo)

• Seven of the 10 biggest consulting firms to the government have reportedly offered to cut up to $20 billion from their federal contracts. (WSJ)

Best of the rest

• A jury ruled against Sarah Palin in her defamation suit against The Times. (NYT)

• “They Criticized Musk on X. Then Their Reach Collapsed.” (NYT)

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 Investors Prefer the ‘Nice’ Trump, but Want Results appeared first on New York Times.