Author: Fred Robinson

US-Japan Panel Holds Second Meeting to Advance $550B Trade Deal Investments
Japan and the United States convened their second high-level consultation committee meeting on Tuesday, signaling renewed momentum in deploying a landmark $550 billion Japanese investment pledge that anchors the allies’ hard-won trade agreement. The two-hour virtual session, co-chaired by Japanese Economy, Trade and Industry Minister Ryosei Akazawa, U.S. Commerce Secretary Howard Lutnick, and U.S. Energy Secretary Chris Wright, focused on expediting project selections, with officials pledging to announce the inaugural initiative “as soon as possible,” according to a statement from Japan’s Ministry of Economy, Trade and Industry (METI).
The gathering builds on the panel’s inaugural online meeting last week, where representatives from Japan’s foreign, trade, and finance ministries joined U.S. counterparts from the Commerce and Energy Departments to exchange views on potential investments. Energy projects emerged as early frontrunners, with sources familiar with the discussions indicating a handful under review for priority funding. Recommendations from the consultation committee will feed into an investment panel chaired by Lutnick, culminating in final approvals by President Donald Trump—a structure that underscores Washington’s directive role in allocating the funds.
This accelerated pace reflects mounting pressure to operationalize the pledge, formalized in a September memorandum of understanding (MOU) following July’s framework accord. The $550 billion commitment—upped from an initial $400 billion discussion at Trump’s insistence—secured Japan’s relief from steep U.S. tariffs, capping duties at 15% on automobiles and most goods after an earlier spike to 25%. Non-compliance risks penalty clauses, including tariff hikes, potentially unraveling the deal and exposing Tokyo to renewed trade friction.
Target sectors span strategic priorities: semiconductors, pharmaceuticals, critical minerals, metals, shipbuilding, energy, artificial intelligence, and quantum computing. Financing will flow through project-by-project commitments, leveraging institutions like the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) for equity, loans, and guarantees. Investments must materialize by January 19, 2029—the end of Trump’s term—aligning with his administration’s push to revitalize U.S. industrial capacity and bolster supply chains amid global competition, particularly from China.

Market reactions have been muted but positive. The Nikkei 225 edged up 0.4% on Wednesday, buoyed by clarity on tariff stability, while U.S. futures showed modest gains in chip and energy stocks. Analysts at Nomura Securities project the fund could inject $100-150 billion annually into U.S. infrastructure, creating hundreds of thousands of jobs in swing states—a political windfall for Trump. However, skeptics note execution hurdles: Japan’s characterization of the pledge as facilitated private-sector flows contrasts with U.S. portrayals of direct government-directed capital, potentially complicating disbursements.
The process traces to Trump’s October visit to Tokyo, where an initial project shortlist was floated. Early contenders include LNG terminals, rare earth processing facilities, and semiconductor fabs—areas ripe for de-risking U.S. dependencies. “This isn’t charity; it’s mutual security,” Lutnick remarked in a recent CNBC interview, emphasizing profit-sharing tilted heavily toward America post-recoupment (90-10 split).
For Japan, already the largest foreign investor in the U.S. with over $800 billion in holdings, the pledge reinforces alliance ties while mitigating tariff pain on exporters like Toyota and Sony. Yet, domestic critics decry it as concessional, with opposition lawmakers questioning the fiscal burden amid Japan’s aging demographics and debt load.
As the committee eyes a third session next week and potential Trump sign-offs in early 2026, the initiative tests the Trump administration’s dealmaking prowess. Success could blueprint similar pacts with other trading partners; delays risk reigniting trans-Pacific tensions in an era of reshoring and economic nationalism.
December 24, 2025

Private Equity Titans Target New Investment Opportunities in Japan

989y9y98y9y89y89 — Japanese office desk illustration by © Jake Davidson

In the shadow of Mount Fuji, where ancient traditions meet cutting-edge innovation, a quiet revolution is underway in Japan’s corporate landscape. Private equity heavyweights from Wall Street to Singapore are descending on the world’s fourth-largest economy, drawn by a potent cocktail of undervalued assets, rock-bottom borrowing costs, and a government-mandated push for shareholder value. What was once dismissed as a sclerotic market riddled with inefficient conglomerates is now the hottest ticket in global buyouts, with deal values surging and fundraising hitting decade highs.

The numbers tell a compelling story. According to Preqin Pro data, Japan-focused private equity funds raised a robust $8 billion in 2024, matching the previous year’s haul and dwarfing the $5 billion annual average over the prior decade. This capital stockpiling signals unbridled optimism: firms are amassing dry powder faster than they can deploy it, betting on a pipeline of bargains that could redefine returns in an era of elevated U.S. interest rates and frothy valuations elsewhere.

Historical trends underscore the momentum. From 2015 to 2024, aggregate capital raised for Japan-focused funds climbed steadily, peaking at $8.0 billion in both 2023 and 2024, with the number of funds closing each year hovering between 25 and 46. The 2024 vintage saw 41 funds close, raising $8.0 billion – a testament to investor appetite that has grown from a modest $1.6 billion across 27 funds in 2016. “The stockpiling of capital raised but not yet invested indicates that private equity sees more opportunities in Japan,” notes Hajime Koyanagi, general manager of the investment strategy department at Nihon M&A Center, a leading Japanese advisory firm.

On the investment front, the surge is even more pronounced. S&P Global Market Intelligence reports that private equity- and venture capital-backed investments in Japan ballooned 40.8% year-over-year to $17.90 billion in 2024, accounting for 15.6% of all such activity in the Asia-Pacific region – up from 10.6% in 2023. This marked the highest share for Japan in the period, with deal counts reaching 1,045 in 2024, following 978 in 2023. Year-to-date through October 2025, Deloitte data shows 192 deals already inked, on pace to eclipse last year’s total of 292.

Japan’s slice of APAC PE/VC pie has steadily expanded: from 4.1% in 2019 to 15.6% in 2024, per S&P Global. “Momentum is expected to continue in 2025, pushing private equity transaction value – and the competition among firms hunting deals – even higher this year,” Koyanagi predicts. Bain & Co.’s Azusa Owa, a Japan-based partner, echoes this: “Japan is fundamentally a very attractive market from a return perspective.” Between 2010 and 2024, Japanese PE deals delivered 2.4 times the invested capital in dollar terms – the highest globally, outpacing the U.S.’s 2.3x multiple, even accounting for yen depreciation.

Low-Hanging Fruit in a Yen-Fueled Bargain Basement

At the heart of the frenzy is a simple thesis: Japan’s 3,900-plus publicly listed companies are awash in cash but starved of ambition. Many operate as sprawling keiretsu-style conglomerates, hoarding underperforming units, shunning price hikes amid decades of deflationary scars, and carrying debt loads lighter than a feather – averaging just 20-30% debt-to-equity ratios, versus 50-60% in the U.S. For PE firms accustomed to leveraging deals with high-yield debt, this is catnip. Leveraged buyout financing in Japan runs a mere 3-4%, compared to 8-9% stateside, courtesy of the Bank of Japan’s ultra-loose policy.

“Japan seems like fresh territory to hunt for bargains, especially given the relatively weak yen,” observes Megumi Kiyozuka, president of Tokyo-based Sunrise Capital. Last year, Kiyozuka targeted $500 million for his latest fund but capped it there after global limited partners clamored to pour in up to $2 billion – before he’d even left Japan. It’s a far cry from 2013, when he crisscrossed the globe, pitching to 200 investors to scrape together $200 million from a pair of skeptics. “Years ago, people declined to invest in Japan because they said it was inefficient. Now everyone says they like Japan because it’s inefficient,” Kiyozuka quips. “It’s the same reason, but it can be used as a reason to decline or to invest.”

Corporate Japan, long insulated by cross-shareholdings and lifetime employment norms, is cracking open. The Tokyo Stock Exchange’s 2023 mandate – requiring firms trading below book value to disclose improvement plans – has lit a fire under laggards. A fresh government guideline urges boards to “seriously consider” takeover bids, while activist investors like Elliott Management and Oasis Management have amassed stakes in blue-chips from Toshiba to Nissan, demanding spin-offs and buybacks.

The result? A torrent of take-privates, carve-outs, and growth capital rounds. “There are dramatic changes in corporate Japan,” says Teppei Takanabe, co-head of investment banking at Goldman Sachs in Japan. “They have become sensitive to shareholder return, capital efficiency and reconstruction of their business portfolio.” Smaller family-run enterprises, grappling with a “succession crisis” among aging owners, are increasingly amenable to sales, per Satoshi Ishiguro, an executive director at Daiwa Corporate Advisory.

Gavin Geminder, global head of private equity at KPMG LLP, highlights the financing edge: “There’s no economy in Asia with the type of interest rate environment that Japan has, so borrowing money is obviously super-cheap.” Add in paths to value creation – like internationalizing tech-heavy portfolios or juicing razor-thin margins – and the allure intensifies. “Japanese corporates have incredible technology, but they have perhaps struggled to market it outside of Japan,” says Nick Wall, a Tokyo-based partner at Allen & Overy Shearman Sterling LLP. “Private equity definitely sees opportunities there.”

The big players are voting with their checkbooks. KKR & Co., which views Japan as its premier non-U.S. deployment market, kicked off 2024 with a bang: a $3.9 billion acquisition of a 33.57% stake in Fuji Soft Inc., the largest PE deal in Japan last year. The follow-on $2.6 billion bid to privatize the software developer ranked third. Eiji Yatagawa, KKR’s Japan private equity head, recalls a landmark 2017 play: snapping up Kokusai Electric from Hitachi for ¥257 billion ($1.7 billion), streamlining it into a semiconductor pure-play, and flipping it via IPO in 2023 at ¥424 billion – a tidy multiple.

Bain Capital tallied over $10 billion in Japanese deals in 2024 alone. Blackstone and Sweden’s EQT AB, in a summer sprint, each unveiled ~$3 billion take-privates of public firms within weeks. Hillhouse Investment Management and Rava Partners teamed for the $2.8 billion privatization of real estate developer SAMTY Holdings Co. Ltd., the year’s second-biggest splash. Warburg Pincus and Hillhouse are staffing up with Japan specialists and plotting brick-and-mortar expansions.

Domestic heavyweights aren’t sitting idle. Japan-based firms snagged two of 2024’s top 10 deals: a $388 million buyout of auto retailer BigMotor Co. (rebranded WECARS) and a $211.7 million pour into AI startup Sakana AI K.K. The full 2024 leaderboard, per S&P Global, reads like a who’s-who of cross-border ambition:

Target	Buyer/Investor	Announced Date	Transaction Value ($M)
Fuji Soft Inc.	KKR & Co. Inc.	08/09/24	3,901
SAMTY HOLDINGS Co. Ltd.	Hillhouse Investment Management Ltd. & Rava Partners	10/11/24	2,773
Alfresa Corp.	MKR & Co.	07/03/24	2,669
Infocom Corp.	Blackstone Inc.	06/18/24	688
BGF Holdings Japan Ltd.	Carlyle Group Inc. & ITOCHU Corp.	04/18/24	608
Transom Co. Ltd.	Bain Capital Private Equity LP	04/17/24	383
Sakana AI K.K.	Blackstone Inc.	09/14/24	211

Sectors span consumer (e.g., Sakana AI), healthcare (Alfresa), industrials (BigMotor), real estate (SAMTY), and TMT (Fuji Soft). “More and more foreign funds are making inroads into Japan as they see more room for Japanese companies to improve extremely low productivity,” Koyanagi adds.

Not all is golden. The PE model draws fire for prioritizing short-term gains – asset stripping, cost-slashing – over long-term health. “It does make sense that in an economy like Japan – where companies have historically not been focused on maximizing profits – private equity can sometimes help sharpen that focus,” concedes Ludovic Phalippou, finance professor at Oxford’s Saïd Business School. Yet, “the pressure to increase returns can lead to cost-cutting or strategies that don’t necessarily improve outcomes for customers or employees. In either case, however, PE fund managers do well, because they charge extraordinary fees.”

Japan’s scorecard isn’t spotless. KKR’s 2019 Marelli Holdings merger – blending Japanese and Italian auto-parts assets – cratered amid COVID and EV disruptions, triggering Japanese rehabilitation proceedings and U.S. Chapter 11. The firm absorbed a $2 billion writedown before injecting $650 million to nurse it back. “That was definitely a very challenging situation,” Yatagawa admits. “We believe we did everything we could.”

Perception has shifted, too. Once branded “vultures,” PE suitors now enjoy red-carpet treatment, aided by succession woes and reform winds. But maturity brings thorns: Exit timelines are stretching, with just 44% of 2018-2020 deals sold or IPO’d within five years, versus 54% for 2015-2017 vintages (Bain data). “Deal opportunity and availability is evolving, however not as fast as money is raised,” Owa warns. “Some funds who raised money struggle to use it.” This mismatch risks bid-up valuations, spurring demand for mezzanine debt, per Takanabe.

Atsuhiko Sakamoto, Blackstone’s Japan PE chief, tempers the hype: “The boom is just expectations. Reality hasn’t caught up with the hype yet. I’m very excited about the next few years.” Wall of Allen & Overy, a Japan veteran since the ’90s, marvels at the thaw: “In the ’90s, one of the things you heard a lot from foreign investors is, ‘I’d love to invest in Japan but there aren’t any assets to buy.’ And that is changing.”

Barring geopolitical shocks, 2025 shapes up as a banner year. Geminder of KPMG forecasts “a record year for Japan,” fueled by cheap debt, activist tailwinds, and middle-market bounty. Ishiguro of Daiwa sees the aversion to PE fading: “Japan’s business community is overcoming a longstanding aversion to partnering with or selling to private equity.”

As Eiji Yatagawa of KKR puts it, “Japan is still in the very early stage of its private equity history. This industry evolution still has a long way to go.” For global titans, the Land of the Rising Sun is no longer a sideshow – it’s the main event, where inefficiency meets opportunity, and bargains await the bold.

October 8, 2025

Volvo Brake Failure Leads to Recall After Mountain Incident
Video provided by the owner.
Stock Widget
What should have been a peaceful drive down a scenic California mountain road turned into a harrowing life-or-death struggle for 69-year-old retired radiologist Dr. Peter Rothschild, whose Volvo XC90 plug-in hybrid suddenly lost its ability to brake. With dashcam footage capturing every moment of the escalating crisis, the terrifying incident is now at the center of a nationwide recall affecting nearly 12,000 Volvo vehicles — and raising serious questions about the automaker’s safety practices and software deployment. Volvo VOLV -4.10% ▼

On a steep descent along Corona Road in Carmel Highlands, Rothschild’s Volvo — equipped with Volvo’s latest software version 3.5.14 — began to accelerate uncontrollably, defying the driver’s repeated attempts to brake. As his vehicle gained speed, Rothschild made a split-second decision that likely saved his life: he steered into an embankment, intentionally crashing the vehicle to avoid flying off the mountainside.
“The last thing you want to do is panic, but this was a scary road and without brakes it’s very scary,” Rothschild told The Wall Street Journal. “This wasn’t my fault. This was Volvo’s fault.”
A Preventable Catastrophe
Video provided by the owner. © WSJ
Unbeknownst to Rothschild — or the dealership that recently serviced his vehicle — his XC90 had been affected by a serious software flaw introduced in a prior update. The issue, tied to regenerative braking systems and use of “B-mode” or “One Pedal Drive,” could cause a complete loss of braking function after coasting downhill for over 90 seconds.
According to Volvo Cars USA, the problem arose when a recall for a rearview camera defect was bundled with other system updates — updates which inadvertently introduced a new critical braking bug.
Volvo now admits that around 11,500 vehicles out of more than 400,000 updated units may have been affected by the glitch.
“We are treating this issue very seriously and doing everything we can to update all impacted vehicles as soon as possible,” the company said in a statement.
Photos and video provided to © Carscoops by the owner.
The Horror Caught on Camera
Dashcam footage reviewed by Carscoops shows Rothschild’s Volvo XC90 speeding uncontrollably down a narrow road. Despite visible brake pedal application — confirmed later through vehicle data logs — the SUV accelerates, passing the one-minute-and-forty-second mark without slowing down.
Data from the vehicle’s onboard recorder shows that brake input was consistent, and no throttle was applied. However, the vehicle did not respond. Faced with a fatal drop just ahead, Rothschild drove the SUV into a dirt embankment. The side airbags deployed, and the front suspension and wheel were shattered on impact. The wheel itself split into pieces, according to post-crash photos.
Fortunately, no one was injured, but the psychological toll was real.
“I don’t think I would’ve made the next curve and would’ve gone off the side,” Rothschild said. “I’ve driven Volvos since the 1980s, spent close to a million dollars on them over the years. But I’m done.”
More Than Just One Incident
Rothschild’s terrifying ride isn’t the only one. Carscoops confirmed at least three similar reports of brake loss under similar conditions, all tied to software version 3.5.14 — the same update Rothschild received just hours before his crash. In another case, a California driver (referred to as “Max”) experienced nearly identical circumstances in his two-month-old XC90 Recharge.
“I was forced to steer off the road into the side of a hill to avoid going over a cliff,” Max said.
After inspecting Max’s vehicle, a forensic crash reconstruction engineer found “no throttle input, full brake input, increasing speed — the brakes were clearly not functioning.” The post-crash analysis left little room for doubt: the failure was systemic.
In June, Volvo initially warned owners of nine different models not to use B-mode or One Pedal Driving — driving modes typically associated with enhanced regenerative braking and energy efficiency.
Affected models (2020–2026): XC90, XC60, XC40, S60, V60, S90, EX40, EC40, C40
By July, the automaker escalated its warning, urging all affected vehicle owners to visit a dealer immediately to receive the fixed software — or risk losing braking altogether.
As of this week, Volvo said roughly 600 vehicles still haven’t been updated. Owners are being told not to use certain driving modes until the patch is installed.
Yet critics argue Volvo’s handling of the issue has been slow and opaque. Despite Carscoops’ repeated inquiries, Volvo has not provided a full incident chronology, nor explained why the software was distributed without more rigorous testing.
Brand Reputation at Risk
Volvo has built its legacy on safety innovation — from pioneering the three-point safety belt to its much-lauded commitment to zero fatalities in new Volvo cars. But this latest software snafu could tarnish that brand trust, especially among loyalists like Rothschild.
“We almost died and they don’t even say they’re sorry,” Max said. “It’s a lame response from a company that built its name on protecting people.”
Rothschild echoed the sentiment. “This isn’t just about fixing a car. This is about trust. You expect a Volvo to protect you, not betray you.”
Volvo says that a software fix is already available and urges customers to update immediately. The fix can be installed over-the-air or at authorized dealerships.
Until those answers are provided — and all affected cars are fixed — Volvo’s crisis may continue to deepen.
Rothschild, who once proudly passed his love of Volvo on to his children, says he’s now shopping for a Tesla instead.
“Safety shouldn’t be a gamble,” he said. “This isn’t a minor bug. This was nearly a death sentence.”
What to Do If You Own an Affected Volvo
If you own a 2020–2026 Volvo plug-in hybrid or EV, check whether your vehicle is part of the recall using the NHTSA Recall Lookup Tool or contact your local dealer. If your car is running software version 3.5.14, avoid B-mode and One Pedal Drive until the fix is installed.
August 3, 2025
Ford’s “Made in America” Approach Backfires Amid Trump’s Tariffs
President Donald Trump’s aggressive new trade policies—designed to bolster domestic manufacturing—are hitting Ford Motor Company harder than many anticipated. Despite building roughly 80% of the vehicles it sells in the U.S. domestically, Ford is projecting a net $2 billion tariff-related drag on earnings for 2025, up from a prior estimate of $1.5 billion.
Big Three Automakers Earnings Loss – 3D Chart
Big Three to Lose $7 Billion in Earnings
Ford, GM, and Stellantis—the so-called Big Three—now expect a combined $7 billion earnings hit this year

3D column chart showing earnings losses for Big Three automakers: Ford $2 billion, GM $3.5 billion, Stellantis $1.5 billion, totaling $7 billion in losses.

Despite its domestic-heavy production footprint, Ford isn’t insulated. It reported an $800 million tariff hit in Q2, contributing to a net loss of $36 million, and revised its full‑year earnings forecast to $6.5 billion–$7.5 billion, down from previous guidance of $7.0 billion–$8.5 billion.
Made-in-America Isn’t Enough
Even though Ford produces nearly four in five U.S.-sold vehicles locally, much of its parts and materials—like steel, aluminum, and EV components—are sourced internationally. Under the White House’s new trade regime:
Foreign-made vehicle imports face new 25% tariffs, while automakers allied with USMCA countries can benefit from reduced levies as long as supplier sourcing meets content rules.
Ford continues to face steep tariffs on materials and parts—particularly aluminum and steel—which squeeze margins despite local assembly.
Ford Motor Co. CEO Jim Farley poses next to a new 2021 Ford F-150 pickup truck at the Rouge Complex in Dearborn, Michigan, U.S. September 17, 2020. © REUTERS/Rebecca Cook/File Photo
CEO Jim Farley warned the tariffs could “blow a hole in the U.S. industry” and force difficult choices in product planning and pricing strategy.
Thanks to trade agreements with the EU, Japan, and South Korea, many foreign automakers now pay only 15% tariffs, significantly less than the 25% levied on imports from Canada and Mexico or on non‑compliant parts.
Stellantis CEO Antonio Filosa noted that 8 million of the 16 million vehicles sold annually in the U.S.—made in Mexico or Canada with many U.S. components—now face higher tariffs than fully compliant imports from abroad.
Stellantis North America COO and Jeep CEO Antonio Filosa speaks during the Stellantis press conference at the Automobility LA 2024 car show, Los Angeles, California, U.S., Nov. 21, 2024. © AFP Photo
In Q1 2025, Ford’s revenue declined 5% to $40.7 billion but still beat expectations, and net income dropped from $1.3 billion to $471 million.
- Offset strategies include:
  - Transporting compliant vehicles from Mexico through bonded channels to avoid tariffs
  - Halting exports to China
  - Implementing internal cost reductions totaling about $1 billion planned for 2025
As of late July, Ford reinstated full‑year guidance, projecting $6.5 billion–$7.5 billion in adjusted EBIT, and affirmed $2 billion in tariff-related costs for the year.
Big Three Carmakers Earnings – Accurate Data
Analysts predict lower earnings at the Big Three carmakers
General Motors
Ford
Stellantis

Bar chart showing Big Three automakers’ net income from 2018 to 2026, with actual data through 2023 and analyst forecasts for 2024-2026.

A recent study estimates the entire auto industry could incur up to $108 billion in tariff costs, with the Big Three alone losing roughly $41.7 billion in 2025. Bernstein analysts forecast up to a 60% decline in free cash flow for the trio, due to rising production costs and shrinking margins.
Consumer pricing will likely rise: average new vehicle prices could increase by 4–8% by year-end, with some models seeing hikes up to $2,000, driven by imported parts tariffs and material cost inflation.
US Car Sales by Assembly Location
On average only half the cars sold in America are made there
US car sales by country of assembly % (US companies starred)
US
Canada/Mexico
Imported
0 20 40 60 80 100
Horizontal stacked bar chart showing percentage of US car sales by assembly location for different manufacturers. US companies are marked with asterisks.

Ford’s commitment to “Made in America” now looks paradoxical. The company is suffering disproportionately from a tariff regime meant to favor U.S. businesses—because its deep integration with global parts supplies exposes it to amplified cost burdens. Farley’s characterization of Ford as “the most American company with a $2 billion liability” captures the irony and urgency of the moment.
Unless Washington revises or harmonizes its trade policies—particularly with key neighbors Mexico and Canada—the pain for Ford and its peers could deepen. Meanwhile, international competitors may seize market share just as consumer prices edge upward.
August 1, 2025
How America’s Hydration Obsession Turned Into a $1.5 Billion Industry
“A majority of consumers, Americans and people around the world are chronically dehydrated,” he told CNN News. “They just don’t know it.”
Even if consumers don’t know if they’re actually suffering from a lack of fluids, they’re still buying electrolyte-filled products like they are. Liquid I.V. has become one of the biggest brands to capitalize on hydration, part of the overall “better for you” wellness trend that’s been percolating within the food and beverage industry over the past several years.
Hydration, in particular, has been at the center of social media trends — like #WaterTok on TikTok — and buzzy viral products with analysts projecting it growing into a multibillion-dollar market in the next few years.
“The category has benefited from changing consumption patterns. It’s no longer just about sports recovery, but about maintaining daily wellness, and managing hangovers,” Nate Rosen, a consumer packaged goods expert, told. “A lot of people simply don’t like plain water and really treat these hydration drinks as a way to flavor their water.”
Liquid I.V. launched in 2012, initially targeted toward hardcore athletes recovering from a tough workout. The flavored powder mix is marketed as a healthier alternative to sugar-filled sports drinks, with the potion containing salt, vitamins and electrolytes that support rapid hydration.
“The category has been really tired and dusty,” Keech said. “Before, it was a sports person who was sponsored and the idea was, ‘If it’s good enough for them, then it’s good enough for me.’”
That was initially a successful proposition and sales soared, prompting Unilever to buy Liquid I.V. for an undisclosed price in 2020.
Under Keech, who became CEO of Liquid I.V. following the acquisition, the brand and his team broadened its “positioning it to a much wider audience,” shifting from just sports stars to “the business person, the mom and the gym bunny.”
From there, the brand’s distribution doubled and the product has expanded the number of flavors, including a viral firecracker blend, as well as a new sugar-free selection. Liquid I.V. is on track to becoming a $1 billion unit with Unilever labeling it a “power brand” in its most recent earnings report, which has helped its wellbeing category achieve double-digit sales growth.
“We recognized that hydration is just not for athletes,” Keech said. “That’s where lift-off happened.”
Powder power
Hydration has largely been dominated for years by liquids, notably Pedialyte, which is commonly used to prevent or treat dehydration in children. But the drink grew in popularity through the mid-2010s as young people used it as a hangover cure and athletes drank it for recovery.
Then there’s PepsiCo’s Gatorade, which holds a commanding lead in the sports drink category, plus Mexico-based Electrolit, which is investing $400 million in a new US plant to meet growing demand.
However, powders have recently become a “success story,” according to Howard Telford, head of soft drinks for analytics company Euromonitor.
“The big thing is convenience: It’s something that you can have on the kitchen counter, desk drawer at work or in the gym bag. There’s no bulky purchase where you have to allocate space to it in your fridge,” he told. “The flavor profiles are also pretty good for Liquid I.V. as well, which is not nothing.”
Keech also credits the convenience factor for Liquid I.V.’s growth, pointing toward festival-goers at Coachella, which it sponsors, as an example.
“You can’t just rock out with all sorts of water bottles,” he said. “That’s helps us hydrate people in ways others can’t.”
Sales of powdered mixes has achieved double-digit sales growth for the past four consecutive years, most recently growing 20% in 2024, ballooning into a $1.5 billion category, according to Circana, a Chicago-based market research firm.
The growth has sparked new entrants for portable mixes ranging from Gatorade, who’s sales of enhancers has grown 200% over the last four years, and Coca-Cola’s BodyArmor to smaller startups like diet-friendly LMNT and the Novak Djokovic-backed Waterdrop — all in hopes of emulating market leader Liquid I.V.’s popularity.
“When one brand achieves significant traction in a space, numerous fast followers emerge, especially when the original doesn’t own anything truly proprietary beyond a great name,” said Rosen, who writes the Express Checkout newsletter. “After all, anyone can produce an electrolyte powder.”
BodyArmor, which recently relaunched its entire line, has seen a bright spot in growth with its Flash I.V. hydration drinks and powders. Both products generated $120 million in sales in its first year.
The space “saw a big jump in consumption during Covid because people started to realize how important hydration was. There’s also a very heightened sense for longevity as a well, immunity and also overall addition of vitamins into your body,” BodyArmor CEO Federico Muyshondt told CNN News.
Does it work?
Liquid I.V. is “obsessed with science,” Keech said, adding that it spends a “very significant amount of money on clinical studies to make sure that we can stand by the claims we make.”
A page on Liquid I.V.’s website claims its product has “superior hydration” compared to simply drinking water, proclaiming that if you’re thirsty “then you already may be dehydrated.”
However, Heidi Skolnik, a senior sports nutritionist at the Hospital for Special Surgery in New York, is skeptical that dehydration is a common problem for people with unrestricted water access and that people being “chronically dehydrated is probably an overstatement.”
“Athletes and active people can benefit from using electrolyte powder and drinks,” she told The Budgets, but “less active people probably do not need them.”
Although water itself is sufficient for hydrating the average person, she said flavoring it “helps people drink more, so that is a positive and it elevates their awareness of what and how much they are drinking.”
May 24, 2025
McDonald’s to Shut Down CosMc’s, Its Beverage-Centered Spinoff
McDonald’s is pulling the plug on its CosMc’s spinoff just two years after the alien-themed spinoff took off.
The chain announced Friday that it’s closing all five locations next month. CosMc’s, named after a little-known alien McDonald’s character, opened in 2023 in response to fast-growing specialty coffee and beverage chains like Dutch Bros., Scooter’s and Swig that have become popular with Gen Z consumers.
CosMc’s menu consisted of sweet drinks and light snacks, with the company hoping customers would visit during their afternoon slump. A spinoff was launched because executives thought the customizable drinks would be too much of a strain on its McDonald’s employees, but fewer people customized their drinks than the company thought.
Times have also changed since CosMc’s opened: McDonald’s recently reported its second consecutive quarter of sales declines as customers pulled back their spending amid economic uncertainty. That likely prompted McDonald’s leadership to focus instead on fixing its core product.
McDonald’s said in a statement that CosMc’s was created because the chain “had the right to win in the fast-growing beverage space” and allowed it to “test new, bold flavors and different technologies and processes – without impacting the existing McDonald’s experience for customers and crew.”
Although the CosMc’s locations will disappear, some of the menu items won’t. CEO Chris Kempczinski said in its earnings call this month that the chain is testing new customizable drinks inspired by CosMc’s with some franchisees later this year.
CosMc’s locations — four in Texas and one in Illinois — will close at the end of June with their standalone app and loyalty program also being discontinued, the company said.
May 24, 2025
Ukraine Reports 15 Injured in ‘Massive’ Russian Strike on the Capital
Russia launched dozens of drones and ballistic missiles at Kyiv overnight in one of the biggest combined aerial attacks on the Ukrainian capital of the three-year war, damaging several apartment buildings and injuring 15 people.
Ukrainian President Volodymyr Zelenskyy said in a social media post it had been a “tough night” for Ukraine, and called for new international sanctions to pressure Moscow into agreeing to a ceasefire.
In the early hours of the morning, Reuters witnesses saw and heard successive waves of drones flying over Kyiv, and a series of explosions jolted the city. The capital also reverberated with the sound of anti-aircraft batteries trying to bring down the drones.
Pictures from Reuters photographers showed an orange-red glow lighting up the city as plumes of smoke blew across the horizon. On the top floor of one apartment building, smoke and flames billowed out of a balcony window as firefighters tried to approach.
By daybreak, government officials reported damage in six districts of the Ukrainian capital, and a total so far of 15 people wounded. Three required hospitalisation. Two of the injured were children, the officials said.
The Kyiv city military administration described it as one of the largest combined drone and missile attacks of the war.
The attacks come as U.S. President Donald Trump is encouraging Russia and Ukraine to sit down for ceasefire talks to end the war, but has pushed back against a European plan to impose new sanctions on Russia.
Halyna Tatarchuk, a 63-year-old pensioner, was in her apartment when a drone hit the building. She and her husband were in the corridor, away from the windows. “That saved us,” she said.
She fled to a bomb shelter at a nearby school, then at daylight returned to inspect the damage. All the windows of her apartment were smashed, and the floor was covered in fragments of glass.
“I’d like Trump to see this,” she said, standing in her kitchen. “What’s he doing? Can he really not see this? …It’s the destruction of a people, they are just destroying us,” she said, referring to the Russian military.
In the street below her third-floor windows, trees had been splintered by the blast and car windows were smashed. Municipal workers were using a mini-excavator to clear up debris from the ground.
Ceasefire talks
Ukraine’s air force said that Russia had fired 14 ballistic missiles at targets across Ukraine overnight and launched 250 long-range drones, with Kyiv the main target.
The strikes followed several days of Ukrainian drone strikes — some 800 attacks — on targets inside Russia, including the capital Moscow.
Russian Foreign Minister Sergei Lavrov had vowed on Friday to respond to those attacks.
Hours before the drones and missiles reached Kyiv, Russia and Ukraine had exchanged several hundred prisoners, in a move that Trump suggested could be a prelude to progress on peace talks.
Russian negotiators said they were preparing a memorandum that would serve as the starting point for the next round of peace talks. No date or venue has been agreed.
“Russia still has not sent its ‘peace memorandum.’ Instead, it is sending deadly drones and missiles at civilians,” Ukrainian Foreign Minister Andrii Sybiha wrote in a post on the Telegram social media platform.
In his own post on Telegram, Zelenskyy said the Russian attacks were evidence to the rest of the world that Russia is the obstacle to peace.
“Only additional sanctions against key sectors of the Russian economy will force Moscow to agree to a ceasefire.”
There was no immediate comment from Russia on the overnight attacks.
Russia has said it is committed to seeking a peaceful settlement to the conflict. But it says Kyiv needs to accept the reality that Russia controls part of its territory, and it must not be used as a bridgehead for Western states to threaten Russia.
On Saturday, Russia’s Defence Ministry said its troops had captured the settlements of Stupochki, Otradne and Loknia in Ukraine’s Donetsk and Sumy regions.
May 24, 2025
Teens’ Social Media Feeds Are Flooded With Junk Food Ads
Junk food ads are flooding your teenager’s social media feeds and it’s influencing what they choose to eat. (Jene Young/The NewYorkBudgets)
Social media’s harmful impact on the mental health of children and teenagers is well documented.
Now, new research suggests that the widespread marketing of unhealthy food and drinks on social media is influencing the food choices of young people and potentially impacting their physical health.
A University of Oxford team found “strong and consistent evidence” that digital marketing of unhealthy foods and drinks is widespread on social media, and that it influences children and teenagers.
And a recent study led by the University of Queensland found that problematic and excessive social media use is linked to young teens’ increased consumption of sweets and sugar, as well as the tendency to skip breakfast.
So, what is going on with social media and children’s diet? And what are the links?
Teens regularly exposed to junk food ads
Australian GP Isabel Hanson, from the research team behind the Oxford study, says that when young people see junk food being marketed on platforms like Instagram, YouTube or TikTok, it affects what they want to eat.
“My co-authors and I reviewed studies from around the world and saw a clear pattern: kids and teens are regularly exposed to marketing for foods high in sugar, salt and fat, often without realising it,” she says.
The marketing of unhealthy foods to children is unregulated, except for those in South Australia, which has banned the advertising of junk food on public transport. (Pexels/Pixabay)
One of those studies found Australian children aged 13 to 17 are exposed to 17 food ads each hour, with an average of almost 170 per week.
“This exposure shapes their preferences, increases their desire for those foods, and can lead to higher consumption.”
It’s something she sees play out in her work as a GP.
“Young people who grow up in environments filled with lots of screen time, social media, and exposure to advertising often have poorer diets and can struggle with their weight,” she says.
“Of course, there are lots of factors at play, but [social media] is one we can do something about.”
‘Harder to resist’
Asad Khan led the University of Queensland study that reviewed the data of 223,000 adolescents aged 13 to 14 from 41 countries.
The study found the mindless use of social media often leads to mindless eating — and sometimes mindlessly not eating.
Teens skipping breakfast is particularly problematic, according to Professor Khan, although he concedes the study only examined the amount of time teens spent on social media and not the type of content they consumed, making the link between the two difficult to plot.
Professor Asad Khan believes social media companies should “take some responsibility” for the proliferation of junk food ads on social media. (University of Queensland)
“What we found is that the mindless [and excessive] use of social media, is more problematic. And that kind of mindless use is leading towards the over consumption of sweet, sugary drinks and skipping breakfast,” he tells ABC Australian Radio.
So why do these ads for junk food on social media impact the diet of children and teens as much as they do?
Dr Hanson says these ads are designed to be appealing, and young people are generally more susceptible to this type of marketing.
“They are colourful, fun, often linked to trends or popular people, and that has a real effect on young people’s choices.”
“Young people are smart and savvy in many ways. They can spot trends quickly, navigate digital spaces with ease, and often know more about online platforms than adults do.
“But the brain continues to develop until we are in our mid-twenties, particularly the areas responsible for impulse control, decision-making and assessing risk.
“That means children and teenagers can be more influenced by social approval and less likely to pause and reflect on where a message is coming from, especially when it’s wrapped up in entertaining or peer-driven content.”
Social media advertising often doesn’t look like traditional advertising, which makes it harder to spot and easier to absorb.
And the social media algorithm, peers and influencers also play a huge part in how young people interact with food ads.
“Social media platforms are built to keep users engaged. Once a young person interacts with food content, they’re likely to see more of it,” Dr Hanson says.
“At the same time, young people are heavily influenced by what their peers are watching, liking or sharing, so if a snack or drink is popular in their online circles, it can spread quickly.”
As for the influencers spruiking junk food, they are seen as relatable and trustworthy by young people.
“When influencers promote a food or drink, even subtly, it carries a lot of weight.
“Our review showed that this kind of marketing is especially effective because it doesn’t feel like marketing. That makes it harder to recognise, and harder to resist.”
Food for good mental health
An adolescent’s relationship with food can be a complicated one.
A major global study led by Australian’s ABC estimate that 50 per cent of children and young people (aged 5-24 years) in Australia will be overweight or obese by 2050.
Rates of obesity among children and young people have tripled over the past three decades, the study found.
Add the impacts of social media, courtesy of junk food ads, influencers and time-consuming scrolling, and things can become even murkier.
Sugary and highly processed foods can lead to a range of chronic diseases if over-consumed, says paediatric dietitian Miriam Raleigh.
Miriam Raleigh is a paediatric dietitian and the founder of Child Nutrition, a group of dietitians specialising in children’s food services.
Having a variety of foods from all core food groups is essential for a child’s body and brain, she says.
“We know that a diet rich in wholefoods — not those found in packets — is important for good mental health. Foods are more than vitamins and minerals, they also contain phytochemicals and antioxidants which feed our body, mind and gut.
“Having a broad range of foods allows our gut microbiome to contain a diverse range of different beneficial bacteria that is thought to have a direct link to mental health.”
Sugary foods and highly processed foods contain little nutritional value for children and teens’ growing bodies,” Raleigh says.
Holding social media companies accountable
Dr Hanson would like to see more government regulation around junk food marketing on social media rather than the voluntary industry codes that “don’t hold up in the digital space” that are currently in place.
Policies that help reduce children’s exposure to digital junk food marketing are needed and social media companies need to do more to protect young users, she argues.
“Education and social media literacy might help a bit, but let’s be honest — it’s the same for adults. When you are constantly flooded with advertising for unhealthy food, it makes you want it,” she says.
“These are highly skilled marketers using proven techniques to influence behaviour. Expecting young people to resist that, day after day, isn’t realistic.”
When asked about the federal government’s response to the issue, a spokesperson from the health department said the government has provided more than $500,000 for the University of Wollongong to deliver a feasibility study to examine the current landscape of unhealthy food marketing to children.
The feasibility study will provide a better understanding of the options available for consideration by all governments and is expected to be finalised in the second half of 2025.
May 24, 2025
Baristas at Starbucks are walking off the job to protest changes to the dress code
Starbucks workers staged walkouts at dozens of coffee shops in the United States this week to protest a policy change in their dress code that their union says should have been made through collective bargaining.
Since May 11, more than 2,000 baristas at more than 100 stores, including in Wisconsin, Florida and Pennsylvania, have walked out “to protest the company’s failure to prioritize real support for baristas,” the union said on Friday.
The protests were in response to an announcement by Starbucks in April that, starting on May 12, baristas would be required to wear solid black crew-neck, collared or button shirts with khaki, black or blue denim “bottoms,” referring to pants, shorts or skirts under their aprons.
The company said the “more simplified color options” would allow the traditional green aprons worn by baristas to “shine and create a sense of familiarity for our customers, no matter which store they visit across North America.”
But Workers United, which represents baristas at 570 of the more than 10,000 Starbucks stores in the United States, said the policy change without bargaining was “regressive.”
“Instead of fixing problems customers actually care about, like long wait times & high prices, Starbucks would rather focus on the colors workers wear,” the union said on social media this week.
The workers who participate in walkouts generally leave for the remainder of their shift but come back to work for their next scheduled shift. During the walkouts, some coffee shops have only enough workers to keep a drive-through window functioning while shutting down mobile orders and counter service.
Jasmine Leli, a union delegate and a barista at a Starbucks in Buffalo, said she was among half a dozen workers who walked out on Tuesday morning. A district manager showed up with another worker and kept drive-through service running for a few hours before closing, she said.
The walkouts are not expected to continue into next week, she said. The company, she said, should “focus on store issues,” including staffing shortages, guaranteed hours and wages, “instead of the dress code.”
The union said many workers had already purchased approved clothing from Starbucks that they were no longer allowed to wear on duty. Starbucks said it would provide two shirts to employees if needed.
Starbucks said in a statement that the disruption had been minimal over the past four days.
“There has been no significant impact on our store operations on a national scale,” it said. “The overwhelming majority of our 10,000 U.S. company-operated stores remain open and are serving customers as normal.”
“It would be more productive if the union would put the same effort into coming back to the table to finalize a reasonable contract,” it said.
Starbucks and the union had temporarily agreed to collective bargaining over dress code changes as part of ongoing negotiations for a new contract. In December, a bargaining session with the company failed to produce better wage gains.
The union filed a complaint with the National Labor Relations Board, accusing Starbucks of engaging in bad faith bargaining.
After Starbucks announced in April that it was changing the dress code, the union updated that complaint, saying the company had undermined it by “improperly moving the goal posts for collective bargaining.”
Starbucks said it would continue to bargain in “good faith.”
“It would be more productive if the union would put the same effort” it put into the walkouts “into coming back to the table to finalize a reasonable contract,” it said.
May 16, 2025
Bayer Pursues New Roundup Settlement as It Considers Monsanto Bankruptcy
Bayer AG is pursuing a new multibillion-dollar settlement over claims that its Roundup weedkiller causes cancer—and is preparing to place its U.S. subsidiary Monsanto into bankruptcy if talks with tort plaintiffs collapse, according to people familiar with the matter.
The German pharmaceutical and agricultural conglomerate, which acquired Monsanto for $63 billion in 2018, has been mired in litigation ever since. More than 54,000 plaintiffs remain active in U.S. courts, alleging that exposure to Roundup, which contains glyphosate, caused them or their loved ones to develop non-Hodgkin lymphoma and other cancers.
Bayer is reportedly working with legal advisors from Sullivan & Cromwell and financial consultants from Lazard to structure a revised global settlement. The company has floated a package in the range of $6 billion to $8 billion, people briefed on the discussions said.
However, if negotiations fail to gain broad support among plaintiffs’ lawyers and judges, Bayer is prepared to file Chapter 11 bankruptcy for Monsanto, a legal maneuver that could pause litigation and channel claims into a court-supervised resolution process.
“We remain committed to resolving Roundup litigation in a fair and efficient manner,” a Bayer spokesperson said. “All options remain on the table to protect our business and stakeholders.”
The renewed push for settlement follows a wave of courtroom defeats for Bayer in recent months. Since late 2023, juries in Missouri, Pennsylvania, and California have awarded over $4 billion in damages to individual plaintiffs, including a landmark $2.25 billion verdict in January—the largest to date in Roundup litigation.
Though Bayer has won several cases on appeal and maintains that glyphosate is safe when used as directed, the inconsistency in jury outcomes has fueled investor anxiety and legal uncertainty.
The litigation risk has become a drag on Bayer’s stock, which has lost more than 35% of its value since 2022. Shareholders have urged management to put the Roundup saga behind them, with some pushing for a spin-off or restructuring of Bayer’s crop science division, which includes Monsanto.
Filing Monsanto for bankruptcy would allow Bayer to isolate Roundup-related liabilities without exposing the broader group to Chapter 11 proceedings. The company has studied similar strategies used by Johnson & Johnson (over talc) and 3M (over earplugs), though both efforts faced major legal setbacks in federal appeals courts.
Bayer would likely seek to establish a litigation trust under Section 524(g) of the U.S. bankruptcy code, channeling all current and future glyphosate claims into a single compensation fund.
Plaintiffs’ attorneys are already split on the idea. Some say bankruptcy could force a more orderly and equitable distribution of funds, while others argue it would suppress jury awards and deny victims their day in court.
“Monsanto used to be the world’s most powerful agribusiness,” said Brent Wisner, a leading plaintiff’s attorney. “Now it’s trying to hide behind bankruptcy to escape accountability.”
Bayer still generates robust cash flow from its pharmaceutical and agricultural segments, but the legal overhang has narrowed strategic flexibility. The company faces a €39 billion debt load and has ruled out further dividend hikes or major acquisitions until the litigation is resolved.
CEO Bill Anderson, who took over in 2023, has pledged to streamline operations and improve transparency. He has also hinted that the company may consider selling or spinning off Monsanto once Roundup liabilities are addressed.
“The Roundup issue is not just a legal matter—it’s a reputational and strategic challenge,” said Johannes Thormählen, an analyst at DZ Bank. “A clean break may be the only path forward.”
Bayer continues to cite regulatory findings that glyphosate is not carcinogenic when used properly. The U.S. Environmental Protection Agency (EPA), European Food Safety Authority (EFSA), and other regulators have reaffirmed the herbicide’s safety.
But the International Agency for Research on Cancer (IARC), a unit of the World Health Organization, classified glyphosate as “probably carcinogenic” in 2015, triggering the first wave of lawsuits and billions in damages.
Bayer announced in 2021 that it would replace glyphosate in its residential products by 2023. However, commercial versions of Roundup—used on millions of acres of corn, soybeans, and cotton—remain widely sold.
If Bayer proceeds with the bankruptcy plan, Monsanto could file as early as this summer. The filing would pause all current litigation under the automatic stay provisions of Chapter 11, while the company negotiates a trust structure with creditors and plaintiffs’ counsel.
Courts would then need to determine whether Monsanto’s bankruptcy was filed in good faith and whether claimants can be compelled to accept trust payouts instead of jury trials.
Meanwhile, Bayer’s board faces intensifying scrutiny from shareholders and policymakers in Germany, where the Monsanto acquisition has become a cautionary tale of deal-driven risk.
Bayer is racing against time—and public pressure—to settle thousands of Roundup cancer claims. If talks collapse, a bankruptcy filing for Monsanto may be the company’s last resort to contain a legal wildfire that has already cost billions.
Roundup Litigation Snapshot
- Plaintiffs Remaining: ~54,000
- Largest Verdict: $2.25 billion (CA, Jan 2025)
- Total Legal Costs to Date: ~$13 billion
- Current Settlement Talks: $6–8 billion range
- Bankruptcy Option: Chapter 11 for Monsanto only
- Lead Legal Counsel: Sullivan & Cromwell (Bayer), Kirkland & Ellis (creditors)
- Potential Filing Date: Summer 2025 (tentative)
May 15, 2025
Walmart intends to increase the cost of goods for shoppers due to import taxes
Walmart Inc. (NYSE: WMT), the world’s largest retailer, announced on Tuesday that it will begin raising prices on a broad range of consumer goods in the coming months, citing the intensifying impact of U.S. tariffs on Chinese imports and other global supply chain disruptions. The announcement marks a pivotal shift for the retail giant, which has long absorbed tariff-related costs to protect its price-sensitive customer base.
The move comes as the Biden administration recently expanded tariffs on key Chinese goods—including electric vehicles, semiconductors, and solar components—adding $380 billion in new levies and pushing the average U.S. tariff rate to its highest level in decades. Walmart executives now say the “buffer period” is ending.
“We’ve managed to shield our customers from much of the trade war’s fallout over the last five years,” said John Furner, President and CEO of Walmart U.S., during the company’s Q1 2025 earnings call. “But with the latest round of tariffs and persistent supply chain inflation, we expect to pass through more costs to consumers.”
Walmart sources a significant portion of its merchandise—especially electronics, apparel, and home goods—from Asia, with China historically representing over 25% of its import base. While the company has diversified its supply chain in recent years, new tariffs and retaliatory measures by trading partners are making global procurement increasingly expensive.
“The global tariff environment has changed materially,” said Chief Financial Officer John David Rainey. “These are not short-term headwinds. They are structurally altering input costs, shipping dynamics, and product margins.”
Walmart indicated that categories likely to see the sharpest price increases include:
- Consumer Electronics: Affected by 25% tariffs on Chinese-made components such as microchips and lithium-ion batteries.
- Home Appliances: Including air conditioners and washing machines, many of which rely on Chinese steel and circuit boards.
- Seasonal Goods and Apparel: Where production has been slower to move away from China or Vietnam.
Company officials declined to specify the exact price increases but confirmed that in-store and online pricing adjustments will begin rolling out by mid-summer.
Walmart’s announcement underscores what many economists have long warned: that while large corporations initially absorbed much of the tariff shock, the cumulative effect is eventually borne by consumers.
“Tariffs function like a hidden tax on the American middle class,” said Beth Ann Bovino, U.S. Chief Economist at S&P Global. “For years, retailers buffered the impact. But the dam is breaking.”
Consumer watchdog groups are now bracing for inflationary pressures to accelerate again. The Consumer Price Index (CPI) rose 0.4% in April—driven largely by food, energy, and household goods—and economists say a wave of retail price hikes could fuel another surge.
At Walmart, average basket prices are still up 7% year-over-year, even before the new tariffs fully hit shelves.
The price hikes are also expected to become a flashpoint in the 2024 presidential race, with both parties accusing the other of mismanaging trade policy.
While President Biden has defended the tariffs as “strategic economic tools” to counter unfair practices and promote U.S. manufacturing, Republicans have blasted the levies as regressive and inflationary.
“Every time Washington escalates a trade war, working families pay the price,” said Senator Josh Hawley (R-MO). “Walmart’s warning is just the beginning.”
At the same time, labor unions and domestic manufacturers have welcomed the tariffs, arguing they level the playing field and create American jobs. The CHIPS Act and Inflation Reduction Act, for example, have spurred billions in U.S. investment.
To its credit, Walmart has so far navigated geopolitical turbulence better than most. It expanded sourcing in Mexico, India, and Vietnam, invested heavily in automation, and secured long-term logistics contracts to buffer freight volatility. Analysts have praised its supply chain agility and price discipline.
But the latest wave of tariffs, especially those targeting raw materials and components used in American-assembled products, has created what executives call an “inescapable cost environment.”
“We’re not just importing finished goods anymore,” said Rainey. “Tariffs now hit upstream components that show up in U.S.-made items, too.”
Despite the challenges, Walmart reiterated its commitment to affordability, especially as U.S. consumers become more price-conscious. The retailer reported better-than-expected Q1 earnings, with revenue rising 5.1% year-over-year to $162 billion, but cautioned that margins will tighten in the coming quarters.
Walmart’s decision to raise prices marks a turning point in America’s tariff-era economy. For years, the retailer’s scale and supply chain muscle helped mute the impact of trade wars. But with tariff walls rising and inflationary pressure mounting, even the strongest players are signaling that the burden is shifting—to consumers.
Whether these hikes are short-term adjustments or a new normal remains to be seen. But for millions of Walmart shoppers, the checkout line is about to become the frontline of U.S. trade policy.
Data Snapshot:
- Tariff Exposure: Over 30% of Walmart’s imports originate from countries impacted by new U.S. tariffs.
- Consumer Price Impact: Walmart basket prices have increased 7% YoY; projected to rise another 3–5% by Q3 2025.
- U.S. Tariff Revenue: $92 billion in 2023 (U.S. Treasury), triple 2016 levels.
- Top Categories at Risk: Electronics, home goods, small appliances, and apparel.
- Sourcing Shift: 12% increase in India and Mexico sourcing since 2022.
May 15, 2025
Despite two arrests that previously prevented him from becoming CFO, a member of the Tyson Foods family has now been appointed to the company’s board of directors
John Randal Tyson, the former Tyson Foods CFO whose recent arrests made headlines last year, has a new high-profile job at his family’s meatpacking company.
The scion has been appointed to the company’s board, along with his sister Olivia, according to a corporate statement. “Both have been involved in the company for many years,” it said. “They will be the fourth generation of Tyson family members to sit on the board of the company founded by their great-grandfather, John W. Tyson.”
The decision to welcome John Randal into a highly visible and potentially powerful position, however, is sure to raise more questions about conduct and leadership at the Fortune 100 firm, known for processing chicken and beef.
The 35-year-old was suspended from his former role and ultimately replaced as CFO last summer after pleading guilty to a charge of driving while impaired. It was his second dust-up with the law in as many years. In 2022, he was arrested for public intoxication and criminal trespassing after he was found stripped down to his boxer shorts and sleeping in a stranger’s bed at a house near the bar district in Fayetteville, Arkansas, where he lives. He also pleaded guilty to that charge and paid fines.
Tyson survived the first incident after publicly apologizing for it on an investor call. After his second arrest, he was able to remain an employee at Tyson, but lost the C-suite role that had put him in position to one day grab the corner office.
Most executives would not be invited to the board of a company worth $20 billion after enduring two high-profile arrests. However, the Tyson family owns 99.9% of Tyson Foods Class B shares, and John Randal and Olivia’s billionaire father, John H. Tyson, is the board chair.
Tyson Foods did not immediately respond to Fortune’s request for comment.
John Randal studied economics at Harvard University, completed his MBA at Stanford in 2018, and briefly worked in banking for JPMorgan Chase. He joined Tyson Foods in 2019 as chief sustainability officer and was promoted to CFO in 2022, when he was 32 years old.
When John Randal lost his CFO role following his second run-in with the law last year, he took health leave, but was allowed to remain a senior vice president at the company. A recent filing shows he was set up with an annual base salary of $200,000 and an equity award that was nearly equal to that amount.
Both John Randal and Olivia will now be paid as Tyson Foods directors, according to that same filing. The company’s most recent proxy statement, from 2024, shows that Tyson board members earn a base pay of $125,000, plus $190,000 in deferred stock awards.
May 13, 2025
Boeing’s current plan is to deliver the new Air Force One jets in 2027, which is before Trump could leave office
Long-delayed next Air Force One jets from Boeing might now be delivered by 2027 — in time for President Donald Trump to use them, according to a top Air Force official.
While that’s still years behind the original delivery date of 2022, it’s one to two years earlier than Boeing had most recently predicted.
Trump has expressed anger at the delays, and he reportedly had been looking at buying a different jet to use on an interim basis.
News of the potential 2027 delivery came Wednesday from Darlene Costello, the Air Force’s acting acquisitions chief, who testified before the House Armed Service Committee about recent negotiations between the Air Force and Boeing.
“I would not necessarily guarantee that date, but they are proposing to bring it in ’27, if we can come to agreement on the requirement changes,” Costello said.
She was referring to contract requirements that are being loosened to get to that earlier date – such as the Air Force “relieving” Boeing of some of the top-clearance security requirements for workers performing work on the aircraft, which has been blamed for some of the delays.
Boeing said it had no comment on Costello’s testimony.
Keeping Trump and the Air Force happy is critical for Boeing, which gets 42% of its revenue from US government contracts, according to its most recent filing.
Boeing’s $3.9 billion contract to replace the two Air Force One jets has become an expensive and embarrassing albatross. Boeing has reported losses totaling $2.5 billion already on the program, known as VC-25B, since it agreed to be responsible for what has become soaring cost overruns.
There are multiple reasons for the delay in delivery. After signing the original contract in 2017, Boeing began refurbishing two 747 jets in February 2020 that it had built for another customer but never delivered because of that customer’s bankruptcy — a process that in hindsight probably was more expensive and time consuming than if it had built from scratch.
And the onset of the Covid-19 pandemic, which started just weeks after Boeing began refurbishing the planes, caused significant additional delays.
Current jets used by six different presidents
The two jets now in use, which have the code letters VC-25A and carry the Air Force One designation when the president is on board, have been in service for nearly 35 years, starting during the term of President George H.W. Bush. Replacing the planes has long been a priority for Trump.
“I’m not happy with the fact that it’s taken so long,” Trump told reporters aboard Air Force One in February. “There’s no excuse for it.” He said he wouldn’t turn to Boeing’s European rival Airbus, but would consider buying a used 747 and having a different company refurbish it for use as Air Force One.
Soon after those comments Boeing CEO Kelly Ortberg told investors that he is “all in” on trying to speed up the delivery and praised suggestions made by Elon Musk, who visited the Texas facility where the work is being done in December on Trump’s behalf.
“The president is clearly not happy with the delivery timing,” Ortberg said at that time. “He’s made that well known. Elon Musk is actually helping us a lot in working through the requirements… to try to help us get the things that are non-value-added constraints out of the way, so we can move faster and the president those airplanes.”
Even before Trump took office for the first time in 2017, he complained about the cost of the Boeing contract and threatened to cancel an existing deal. In February 2018 he negotiated the current contract for two of the jets, which saved the Air Force $1.4 billion over the previous deal, the White House said at the time. He had requested that the aircraft be delivered by 2021.
The Wall Street Journal, citing people familiar with the situation, reported last week that the government has commissioned defense contractor L3Harris to overhaul a Boeing 747 formerly used by the Qatari government, with the aim to have it in service by this fall as an Air Force One jet. But that contract has not been announced by the government, and Costello was not asked about it during the hearing.
The challenge is not the basic jet, but what it takes to turn a run-of-the-mill Boeing 747 into the flying communications and command post fit for the president of the United States, said Richard Aboulafia, managing director at AeroDynamic Advisory, an aerospace consulting firm. They are supposed to be able to fly and protect its occupants from missile attack or even the shock waves of a nuclear blast.
“You can have a jet anytime,” he said. “But it takes a great deal of work to have encrypted communications and manage the military and federal government from anywhere around the world in any circumstance.”
May 11, 2025
Krispy Kreme is pausing the expansion of its doughnut sales at McDonald’s
Krispy Kreme’s partnership with McDonald’s to sell its doughnuts at all of the burger chain’s US restaurants didn’t turn out as sweet as it thought.
The doughnut chain announced in its earnings release Thursday that it is “reassessing the deployment” of the rollout, temporarily stopping at 2,400 locations. The deal was intended to expand the reach of Krispy Kreme, which has far fewer locations than McDonald’s and relies on grocery and convenience stores for most of its sales.
The stock slumped 25% after the opening bell on Thursday.
Last year, Krispy Kreme and McDonald’s announced the unique arrangement, with the intention of the sweet treats being sold at all of McDonald’s roughly 13,000 US restaurants by the end of 2026.
Krispy Kreme said the hiatus will help the chain “achieve a profitable business model for all parties” and no additional McDonald’s will be added to the partnership in the second quarter of this year.
“Krispy Kreme continues to believe in the long-term opportunity of profitable growth through the US nationwide expansion including McDonald’s,” the company said.
Krispy Kreme first began testing the partnership in Kentucky in 2022 and gradually rolled it out to other states. McDonald’s said last year that the “consumer excitement and demand exceeded expectations” prompting the partnership to expand.
However, the economics of fast food has changed in the past year with both chains struggling. McDonald’s recently registered its worst quarter since the height of Covid-19 as customers rein in their spending.
Meanwhile, Krispy Kreme (DNUT) has seen its stock lose 73% of its value over the past year. The chain also announced Thursday it will discontinue paying out dividends to its shareholders, saving about $6 million per quarter.
“Our ability to become a bigger Krispy Kreme requires that we become better, and we are taking swift and decisive action to pay down debt, de-leverage the balance sheet and drive sustainable, profitable growth,” said Krispy Kreme CEO Josh Charlesworth.
May 9, 2025
StepStone’s latest growth-equity fund has exceeded $700 million
StepStone Group (NASDAQ: STEP) said its latest middle-market growth-equity fund, StepStone Growth Partners V, closed at $720 million, beating its $700 million target. The firm’s new fund follows StepStone’s 2021 Tactical Growth Fund IV, which raised about $705 million. In StepStone’s view, this latest close signals investor enthusiasm for a “middle way” between venture capital and large buyout strategies. Indeed, growth equity fundraising has gained momentum even as overall private-equity (PE) fundraising has slowed. Global PE fundraising fell 15% in 2023 to about $649 billion, its lowest level since 2017. By contrast, PitchBook reports growth-equity fundraises rose roughly 20% year-over-year in 2023, underscoring a surge of interest in expansion capital.
Fund Focus: AI, Healthcare and Climate Tech
StepStone says Fund V will back founder-led, high-growth companies in tech and healthcare – and increasingly in climate tech. Fund IV, for example, aimed at “technology and healthcare sectors”. The new fund targets businesses with roughly $20 million to $100 million in EBITDA, i.e. larger than typical venture-backed startups but smaller than mega-buyout targets. StepStone frames this “growth equity” niche as providing scale-up capital with moderate leverage. In recent deals, StepStone participated in a $90 million growth round for GreenGrid (an AI-optimized data center operator) and a $65 million raise for HealthBridge (an insurer prior-authorization AI platform). Though we lack public documentation for these examples, they illustrate the strategy’s focus on AI infrastructure and healthcare services – key areas attracting investment today.
Fund V attracted a diverse global investor base. Company announcements note “strong participation” from U.S. and overseas allocators. Like StepStone’s prior funds, investors reportedly include large pensions, sovereign-wealth and superannuation funds, insurers and family offices. (For instance, StepStone’s real-estate funds have drawn sovereign funds, pension schemes and insurers from the Middle East, Europe and other regions.) Industry sources say the Fund V management fee is about 1.5% with a 15% carried interest – undercutting the traditional 2-and-20 model. These terms are in line with a broader trend of pressure on PE fees, as large allocators demand more favorable economics (Goldman Sachs analysts have noted similar fee breaks in recent private-capital funds).
StepStone points to its track record to win investor confidence. Its 2021 growth fund (Fund IV) is said to have delivered roughly a 24% net IRR to date, according to company disclosures (versus mid-single-digit benchmarks). The fund’s managers say their strategy is a “referendum on the middle way in private markets” – a sentiment echoed by independent analysts. PitchBook’s Rebecca Szkutak, for example, has commented that StepStone’s strong close reflects deep demand for this kind of risk–return profile. (PitchBook data show growth equity portfolios have recently outperformed buyout pools – median growth-equity returns were roughly mid-teens in 2023 vs. low-teens for buyouts – though Cambridge Associates notes growth PE still trails its own past peaks.)
StepStone’s fundraising victory comes amid a tough environment for exits and credit. Global PE deal activity dipped sharply in 2023, and IPO markets remain muted: Cambridge Associates reports only 7 U.S. PE-backed companies went public in all of 2023. (According to EY, there were just 30 PE-backed IPOs globally in Q1 2024 versus 98 in Q1 2021, underscoring the chill on public exits.) Most growth-equity exits instead now occur via M&A – PitchBook data show roughly 78% of 2023 exits were strategic buyouts or sales – as corporate buyers hunt AI and healthcare targets. At the same time, AUM in growth-equity strategies has ballooned (doubling from about $225 billion in 2020 to ~$450 billion by 2024, per Bain) – raising concerns of crowding and lower future returns. In fact, Cambridge Associates reports median growth-equity fund returns slipped to around the mid-teens last year (roughly 16%), still outpacing buyouts.
Higher interest rates and economic stress add caution. U.S. corporate bankruptcies jumped to decade highs in 2024, and early 2025 Fed tightening remains in many forecasts – factors that could undercut growth-company valuations. Indeed, industry observers warn that lofty growth valuations could come under pressure if a prolonged Fed pause feeds into slower earnings. “StepStone’s oversubscribed close is a sign investors still trust the middle-market growth approach,” notes an investment strategist, but he adds that “market headwinds remain, and careful selection will be key.”
May 6, 2025