Tag: Tariffs

L.A. Finance Gathering Marked by Hope and Anxiety
Beneath the grand chandeliers of the International Ballroom at the Beverly Hilton Hotel, at rooftop bars and at private parties at billionaires’ mansions, there was a mix of emotions among the financial titans gathered in Los Angeles this week.
Many of the thousands of attendees at the Milken Institute Global Conference — a who’s who of finance and corporate America — remained anxious amid volatile markets, continuing trade tensions and deep cuts to the federal government.
“I’m a C.E.O., I talk to a lot of C.E.O.s, and there is nervousness there,” Kamal Bhatia, president and chief executive of Principal Asset Management, said while he sat on the same stage that hosts the Golden Globes.
But there was also a palpable sense of growing optimism after a rocky three-month start to President Trump’s second term: “I’m optimistic about technology, I’m optimistic about the direction of the economy, I’m optimistic about cutting costs,” said Tony Minella, co-founder and president of Eldridge Industries, an asset management firm. “I think there is a lot of excitement in the world right now, and it’s a fantastic time to live.”
The Milken Institute Global Conference was held at the Beverly Hilton Hotel in Los Angeles. (Eric Thayer/Bloomberg)
The mood at the annual West Coast confab echoed the mood in financial markets.
After Mr. Trump’s unexpectedly high tariffs sent stocks tumbling, there has been some relief from the initial panic as the administration has offered concessions and promoted deal talks that it says will lower tariffs.
The S&P 500 dropped almost 20 percent below its peak in February, but it has since rebounded, recovering roughly two-thirds of its losses.
But despite the recovery, uncertainty remains. Skeptics on the sidelines of the conference suggested that some fund managers were simply painting a rosier outlook to avoid spooking the investors in their funds. Others described it as more hope than conviction.
“Nobody, myself included, can say how this is going to end,” said Ron O’Hanley, chairman and chief executive of State Street. “There may be wishful thinking in all that.”
Evan Spiegel, chief executive of Snap, speaking at the Milken Institute. Mayor Karen Bass of Los Angeles, right, and Cinny Kennard, executive director of the Annenberg Foundation, sat beside him. (Patrick T. Fallon/Agence France-Presse/Getty Images)
Scott Bessent, the Treasury secretary, set the tone on Monday morning, as he tried to soothe the financiers’ concerns. He had started his mission the night before, hosting a private dinner for a handful of investors, according to some of the attendees.
Many in the audience on Monday were left hopeful that tariffs would ease as trade deals were made, buffeted by more pro-growth, pro-business policies like tax cuts and deregulation to come later in the year. But there was also an awareness that the reality may still look very different. Business is on hold, corporate deal making is dormant, and the longer that continues, the worse the consequences could be.
With that doubt, many speakers at the conference noted that they were looking more closely at investing in Europe and other parts of the world, diversifying away from the United States’ uncertain future.
Pension funds, university endowments and insurance companies, which have been heavily invested in the United States in recent years, are beginning the slow process of reassessing where they put their money going forward.
Kim Lew, president of the Columbia Investment Management Company, the endowment for Columbia University, noted that while there was good reason so many fund managers became heavily exposed to the U.S. economy, “I think we all wish we had invested in the world more globally.”
Investors souring on U.S. markets fed into another widely discussed concern: the role of the dollar as the world’s reserve currency, and its importance in supporting the government’s $36 trillion of debt.
The corollary of trade deficits is when international investors hold more dollars that have been reinvested in U.S. assets like the government’s debt. If investors begin to back away, either because of tariffs or geopolitics or declining confidence in the stability of the dollar, then the government’s ability to continue financing its debt could be called into question.
“I believe the underlying foundation of the dollar and the Treasury market has been eroding over the last number of years, and we better pay attention to it soon,” said Alan Schwartz, executive chairman of Guggenheim Partners.
Late on Tuesday afternoon, Michael Milken took the stage for a rare keynote speech. Since the conference began in 1998, he has given just two speeches — in 2000 and 2017.
Mr. Milken is widely credited as the father of the high-yield bond market, having devised a way in the 1980s to lend to risky companies that banks and other financial institutions had typically shunned.
In 1990, he pleaded guilty to securities fraud and conspiracy. He served just under two years of a 10-year prison sentence and was barred from the securities industry for life. He was pardoned by Mr. Trump in 2020.
In his keynote speech, Mr. Milken made a case for the American dream and the importance of economic freedom, equality of opportunity, public health and broad access to education.
“One of the things that has differentiated America from almost every other country in the world is that you have a chance to try, and if you fail, you have a chance to try again,” he said. He added that “quite often, people in our own country have forgotten how lives are changed by freedom.”
Immigration — nor the aggressive detention and deportations that are upending immigrant communities in cities like Los Angeles — was not a big focus of the official discussions at the Milken Institute gathering.
But Mr. Milken chose to conclude his own remarks by celebrating immigrants and referring to the words in President Ronald Reagan’s final speech from the White House in 1989.
“When people think about this speech, they often think about it as an ode to our immigrants in this country and how they have come to this country for the hope of a better life, and they renew each of our focus on the importance of freedom,” Mr. Milken said. “And they make significant contributions to us.”
May 8, 2025
While a U.S. trade agreement could boost the U.K. economy, it’s unlikely to be a game-changer
The British government made faster economic growth its No. 1 mission. But efforts to kick-start it have been repeatedly knocked off course by a global economy lurching from one crisis to another.
On Thursday, British officials secured a win. They announced a trade agreement with the United States, which would lower tariffs on British imports of cars, steel and aluminum.
They emphasized that the two countries would continue to work closely together on “economic security.” The deal was not final, and other issues would be discussed in coming weeks.
“We’ve agreed the basis of a historic economic prosperity deal,” said Keir Starmer, the British prime minister, adding that it would protect thousands of jobs.
The agreement, hailed as the first that the Trump administration has reached since imposing higher tariffs on its trading partners, is limited in scope. While it would reduce tariffs on certain British and American goods, a 10 percent tariff would remain on most other British products. Economists have cautioned that a deal was likely to generate only a small boost for Britain, which is still vulnerable to global economic uncertainty.
“A still-uncertain global backdrop will continue to act as a drag on U.K. activity,” said Zara Nokes, an analyst at J.P. Morgan Asset Management.
British officials have been negotiating in Washington for months as they have sought to insulate their country from Mr. Trump’s desire to reshape the global trade order. They also wanted to protect an economy that barely avoided a recession at the end of last year and was on course for a relatively strong recovery later this year.
However, officials failed to secure exemptions last month when Britain was hit with the 10 percent “base line” tariffs that Mr. Trump imposed on America’s trading partners. Britain was also subject to 25 percent tariffs on cars and steel, and its leaders are concerned about threatened tariffs on pharmaceuticals and films, two important exports. Like other countries, Britain slashed its economic growth forecast because of the trade uncertainty.
For Mr. Starmer, the deal has helped vindicate overtures he made to the president (including an invitation from King Charles for a state visit) and might overshadow a setback in local elections last week.
One of key beneficiaries of the agreement is Britain’s auto industry, which was most at risk from high tariffs. The United States is the largest market for British cars, accounting for more than a quarter of Britain’s global car exports. Under Thursday’s agreement, British cars would be subject to a 10 percent tariff, up to a quota of 100,000 cars.
Many are luxury cars, like Jaguars, Aston Martins and Bentleys, that are made with custom details in Britain. These automakers have found it economically prohibitive to shift production to the United States and have paused shipments there. Mr. Starmer announced the deal and spoke to Mr. Trump from a Jaguar Land Rover factory in England, saying he wanted to be there to tell the workers about it.
“We were facing imminent announcements of very difficult news” in the automotive sector, said Jonathan Reynolds, the business and trade secretary.
The agreement would also cut U.S. tariffs on British steel and aluminum to zero. There would be “new reciprocal market access” on beef, though Britain would not lower its food safety standards to allow imported hormone-treated beef.
A trade deal could lift consumer and business sentiment, which has slumped recently. But there are limits to how much it would lift the overall British economy. Although the United States is an important trading partner, trade flows are heavily skewed toward services, which were not affected by higher tariffs. Britain exported 137 billion pounds’ worth of services to the United States last year, compared with £59.3 billion worth of goods.
More than 60 percent of businesses expect U.S. tariffs would have no impact in the next month, according to a recent survey by the Office for National Statistics.
Though Britain and the United States have been in trade negotiations for five years, this agreement is not a full-blown free-trade deal that lowers tariffs across a wide range of goods and increases access to many services, like the pact that Britain and India signed this week.
A bigger prize for Britain would be a closer relationship with the European Union, which represents about half of British trade. Some progress on an E.U. deal is expected this month at a summit in Britain.
Trade uncertainty is also weighing on the Bank of England, which cut interest rates a quarter point to 4.25 percent on Thursday.
British policymakers have cautiously cut rates since last year over concerns about lingering price pressures and a short-term bump in inflation expected this year. But some recently emphasized the risk to economic growth from trade uncertainty, which is expected to dampen business investment and consumer spending.
Policymakers were divided on Thursday’s rate cut. In an unusual split, five members, a majority, voted for the quarter-point cut, two voted to hold and two voted for a larger cut.
Economists have said the greater threat to Britain is the uncertainty that Mr. Trump’s trade policy has created globally, rather than tariffs on Britain. And it would take more than one trade deal with Britain to ease that.
Andrew Bailey, the governor of the Bank of England, said on Thursday, before details were announced, that he welcomed the agreement but added, “I very much hope it’s the first of many.”
“We need many trade deals” between the United States and other countries to address uncertainty, he said. “The U.K. is only a part of that.” He said there must be a closer look at how trade policy was decided and more confidence in the multilateral process.
Britain is vulnerable to external shocks, and its economy would suffer if its trading partners, like the European Union and the United States, fell into recession. But there are also homegrown economic issues holding back businesses, such as a concern that taxes might rise again, after an increase last month.
“The center of the U.K. story is not tariffs; it’s domestic factors,” said Benjamin Caswell, an economist at the National Institute of Economic and Social Research. It downgraded its forecast for Britain’s economic growth to 1.2 percent this year, predicting weak business confidence and higher cost pressures.
The sluggish outlook means the government could be faced with raising taxes or cutting public spending this year.
“Tariffs have engendered a lot of uncertainty, but I don’t think that should take the government off the hook,” Mr. Caswell said.
May 8, 2025
China and Trump’s team are now in talks, and the world’s economy is counting on a successful resolution
US President Donald Trump’s top trade officials will meet with their Chinese counterparts this week to discuss a de-escalation of their increasingly ugly and damaging trade war. The future of the global economy is riding on their success.
The trade talks, the first in-person meeting between Chinese and American officials since the tit-for-tat tariff escalation kicked off in earnest in March, are unlikely to result in a trade deal, Treasury Secretary Scott Bessent said Tuesday. But tariffs have reached such a high level that trade between the two countries has dropped off dramatically. Any thaw in the trade war could be a welcome sign for businesses and consumers in both countries and around the globe.
“The main objective of this meeting is to establish the conditions for a deal to be reached, including by defining what is feasible to be agreed upon and what isn’t,” said Alfredo Montufar-Helu, head of the Conference Board’s China Center. “There might be some quick wins, like a temporal pause of tariffs, which would bring much needed relief to businesses from both countries.”
The United States has placed at least a 145% tariff on most Chinese imports, and China has responded with a 125% tariff on some US imports. The last tariff-free ships — those on the water when the tariffs were announced — have almost all docked, and the first ships with goods that will be subject to tariffs are arriving at the ports.
That means businesses in China and the United States will soon face a difficult decision: pay a tariff that more than doubles the cost of the imported goods, or stop selling them altogether. That means consumers are weeks away from experiencing higher prices and some shortages.
The punishing tariffs have already damaged both economies. The US economy went into reverse in the first quarter, its first contraction in three years, as businesses stockpiled goods in anticipation of Trump’s “Liberation Day” tariffs, which began in the second quarter. Meanwhile, China’s factory activity contracted at its fastest pace in 16 months in April, and the government is expected to inject the economy with more stimulus measures.
Although the China-US trade standoff is by far the most aggressive, Trump has imposed large tariffs on most other countries around the world too: a 10% universal tariff on virtually all goods entering the United States, plus 25% tariffs on steel, aluminum, autos, auto parts and some goods from Mexico and Canada. So the world is watching the talks with anticipation.
Global economists at the International Monetary Fund, OECD and World Bank have all predicted that Trump’s trade war would have disastrous effects on the global economy, slowing growth dramatically in some countries, while reigniting inflation. The United States is expected to be among the hardest-hit economies as other nations, including China, retaliate against it with higher tariffs. Many US economists and large banks predict the United States could enter a recession this year.
A noticeable thaw
Bessent and US Trade Representative Jamieson Greer will both travel to Geneva, Switzerland, where they will meet the Chinese officials, authorities announced Tuesday.
In an interview with Fox News, Bessent Tuesday said the talks represent a first step, but he tried to downplay expectations for a deal.
“My sense is that this will be about de-escalation, not about the big trade deal … but we’ve got to de-escalate before we can move forward,” Bessent said.
Despite ongoing tensions, both countries have signaled for several weeks that the current standoff is unsustainable. Bessent and Trump have both acknowledged the tariffs are too high. In an interview with NBC News last week, Trump said he would lower tariffs on China “at some point.”
China has largely stood firm against Trump, denying his refrains that the countries were in active negotiations — a denial that Bessent concurred with under oath in congressional testimony Tuesday. China shifted its tone slightly last week, saying it was reviewing proposals by the United States to begin trade talks – but it has remained defiant in its criticism of Trump’s trade policies.
“We have also stated many times that China is open to dialogue, but any dialogue must be based on equality, respect, and mutual benefit,” said Lin Jian, spokesman for China’s foreign ministry on Wednesday. “Any form of pressure or coercion is unacceptable to China.”
Although Beijing has been projecting an aura of strength, its economy is starting to take a beating. On Wednesday, the People’s Bank of China, the central bank, said it would cut the amount of cash that banks must keep in reserve by half a percentage point, in an effort to promote economic growth by boosting liquidity. The bank’s governor, Pan Gongsheng, also announced a 0.1-percentage-point reduction to the seven-day reverse repurchase rate, which will result in a cut to an important interest rate that influences mortgages.
Wall Street welcomed the news: Markets rose on reports of the talks. Dow futures were up more than 300 points, or 0.8%. Futures for the broader S&P 500 rose 0.7% and Nasdaq futures were 0.7% higher. Asian markets were modestly higher on Wednesday.
Trade comes to a near-halt
As Chinese authorities frequently say in their statements about Trump’s tariffs: No one wins in a trade war. That has become evident in recent weeks as high tariffs imposed significant damage on both economies and effectively froze trade.
The number of cargo ships headed from China to the United States fell 60% in April, according to Flexport, a logistics and freight forwarding broker. JPMorgan estimates Chinese imports into the United States will plunge by as much as 80% by the second half of the year.
“A 60% decline in containers means 60% less stuff arriving,” Flexport CEO Ryan Petersen told CNN’s Pamela Brown Tuesday. “It’s only a matter of time before they sell through existing inventory, and then you’ll see shortages. And that’s when you see price hikes.”
The Port of Los Angeles had expected 80 ships to arrive in May, but 20% of those have been canceled, its executive director Gene Seroka told CNN Tuesday. Customers have already canceled 13 sailings for June.
“This week, we’re down about 35% compared to the same time last year, and these cargo ships coming in are the first ones to be attached to the tariffs that were levied against China and other locations last month,” Seroka said. “That’s why the cargo volume is so light.”
Despite the increasingly dire warnings and economic turmoil, the two countries remain quite far from a deal. Both sides have dug in, saying they’ll need major concessions at the outset to begin negotiations. Bessent has said it could take two to three years for trade to normalize with China.
So much is riding on the Switzerland talks. Even without a trade deal in hand, the face-to-face discussions are encouraging. With the two countries inflicting so much damage on themselves, they have left very little choice other than to start the thawing process.
“At some point, I’m going to lower them because otherwise you could never do business with them,” Trump said in an interview with NBC’s “Meet the Press with Kristen Welker,” which taped on Friday. “They want to do business very much … their economy is collapsing.”
May 7, 2025
Wall Street predict that tariffs could inflict more damage on a Hollywood already weakened by streaming and social media
Wall Street analysts are sounding alarms that escalating tariffs—particularly on goods imported from China and other key trading partners—could deal a further blow to Hollywood, an industry already destabilized by the dual disruption of streaming economics and social media fragmentation.
In a series of investor notes and earnings calls over the past two weeks, analysts from Morgan Stanley, JPMorgan Chase, and Bank of America warned that tariffs on audiovisual equipment, post-production software, and even branded merchandise could raise costs and compress margins for major studios and streaming platforms. This comes as the entertainment industry grapples with a structural reset following the end of the streaming boom and the dominance of TikTok-style user-generated content.
“Tariffs could be the straw that breaks the back of an industry already under financial duress,” said Jessica Reilly, senior media analyst at JPMorgan. “Hollywood is in the middle of an identity crisis—tariffs only exacerbate its existential threats.”
Tariffs Hit Production Costs and Global Strategy
The Biden administration’s May 2024 trade package included sweeping tariffs on over $380 billion in Chinese imports, including a 25% levy on audiovisual equipment, cameras, and lighting rigs—gear used widely in Hollywood productions and increasingly sourced from Chinese and South Korean manufacturers. Editing software packages and animation tools that rely on offshore support are also affected, with a 15% duty slapped on cloud-based services provided by firms with overseas infrastructure.
Studios, already slimming down production budgets in response to streaming losses, now face higher input costs at a time when the return on content investment is under intense scrutiny.
“When you’re cutting back on original programming and trying to squeeze value from IP libraries, the last thing you need is a 25% jump in equipment and software expenses,” said David Knox, managing partner at media consultancy Horizon Works.
Netflix and Warner Bros. Discovery have both signaled cost pressures in their Q1 2025 earnings calls. Warner Bros. cited “increased friction from global sourcing and regulatory complexity,” while Netflix executives mentioned “material cost inflation tied to international production logistics.”
Streaming Disruption and Social Media Fragmentation
The tariff wave lands as Hollywood’s traditional power centers are being hollowed out. Legacy studios, once flush with cable bundle revenues and global theatrical runs, are now adapting to an environment where streaming returns are slowing and subscriber growth is plateauing.
Meanwhile, platforms like TikTok, YouTube, and Instagram have diverted both audiences and advertisers. Short-form content is rapidly becoming the dominant global viewing format, especially among the under-30 demographic. According to a March 2025 Nielsen report, viewers aged 18–34 now spend 62% of their video time on social or user-generated platforms—up from just 37% in 2020.
“Hollywood used to compete with other studios. Now it’s competing with teenagers with ring lights,” quipped Goldman Sachs entertainment analyst Ray Wu. “And that competition is real—and brutal.”
The rise of AI-generated content, often built on low-cost foreign cloud infrastructure, further complicates Hollywood’s cost model. Tariffs on AI compute and licensing services—many of which are hosted abroad—could raise barriers for studios attempting to modernize workflows or outsource post-production.
Licensing and Merchandise in the Crosshairs
Studios also face headwinds in the lucrative merchandising and licensing sector. The new tariffs include 20% duties on imported toys, apparel, and collectibles—products that make up a key portion of franchise monetization. Disney, Universal, and Paramount rely heavily on Chinese and Southeast Asian manufacturers to produce branded merchandise tied to film and TV franchises.
“If you can’t move product profitably, you’re not just losing margin—you’re undermining the long-tail value of your IP,” noted Stephanie Chan, senior entertainment strategist at BofA Securities.
Retailers are already warning of delayed shipments and price hikes on character merchandise. According to internal Walmart sourcing data leaked last week, tariffs on children’s toys and branded apparel could increase average consumer prices by 12–18% this holiday season.
Wall Street is increasingly skeptical that major studios can absorb these shocks without further restructuring. Disney recently cut 7,000 jobs and announced a $5 billion cost-saving plan. Paramount Global has been exploring asset sales, and Warner Bros. Discovery is reportedly considering a partial spin-off of its streaming unit to shore up its balance sheet.
“Studios once thought they could outspend disruption. But that era is over,” said Ken Rooke, head of media equity research at Wells Fargo. “They’re now being asked to do more with less—and tariffs add another layer of less.”
Some see opportunity in adversity. A few independent producers are pivoting to domestic suppliers or doubling down on animation, which can be done entirely in-house. Others are lobbying for carve-outs or production credits to offset new tariff costs.
Yet the broader message is clear: the industry’s margin for error is shrinking fast. Tariffs—once viewed as marginal trade policy—are now a major financial variable in a global entertainment business struggling to redefine itself.
Hollywood is no stranger to reinvention. But this time, it must reinvent amid a trifecta of threats: a broken streaming model, an algorithm-driven attention economy, and now, rising trade barriers. For Wall Street, the question isn’t whether Hollywood can adapt—it’s whether it can do so fast enough, and profitably.
May 7, 2025
Trump’s proposed tariffs against Hollywood are showing signs of failure
President Trump’s trade war had, until Sunday night, centered on goods — cars, toys, food, clothes, the tangible stuff we put in and out of virtual and physical shopping carts.
But those goods make up less than a quarter of the American economy. The bigger chunk of our economic pie is known as services — think Google, Netflix, Facebook, the plumbing of the internet, banking, insurance. And, yes, Hollywood films, the industry Trump now thinks needs saving with — you guessed it — tariffs!
ICYMI: Trump wrote on Truth Social late Sunday that he was directing the government to “immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands.” (Watch out, Hayao Miyazaki — your days of flooding the American market with mystical whimsy and childlike wonderment are over.)
Of course, Hollywood studios (and anyone thinking about it for more than a few seconds) were left scratching their heads over how such a tax would work.
As we’ve come to expect with Trump 2.0, it’s not clear whether the president is serious. Jon Voight, who serves as one of Trump’s Hollywood Ambassadors, said Monday that he met with Trump recently to discuss “certain tax provisions that can help the industry – some provisions that can be extended and others than could be revived or instituted.” But that sounds like mostly incentives, not tariffs. In other words, Voight recommended a carrot and Trump announced a stick.
California Governor Gavin Newsom on Monday appeared to prefer a gentler approach, calling on Trump to work with California to create a $7.5 billion federal tax credit for the movie and television industry. Currently, tax incentives are exclusively the realm of states and municipalities.
“We’ve proven what strong state incentives can do. Now it’s time for a real federal partnership to Make America Film Again,” Newsom said in a post on X “@POTUS, let’s get it done.”
The White House said hours after he posted published that “no final decisions” had been made, and Trump later told reporters he wanted to run the idea by folks in the movie industry.
If he is serious about foreign movie tariffs, though, Trump would be opening a new front in a war he has no real plan to win. And he’d be admitting to the world that his love of tariffs is not, as he’s long claimed, tied to some deep concern about trade imbalances but rather a desire to wield an economic cudgel.
The Goods Place
Perhaps because Trump’s intellectual allegiance to opinions he formed 40-plus years ago is so strong, he may be imagining container ships full of VHS tapes and spools of Kodachrome crossing the oceans when he thinks of the global film industry.
But movies are not goods that travel in and out of ports — they are intellectual property that fall under the “services” economy. To tax a movie like a good, the administration would have to clearly define what a movie’s value is, and determine how much overseas production would classify a project as an “import.” (Plus, some poor writer’s room will have to start working on the next season of Emily in Paris under the new title Emily in Albuquerque.)
The goods/services distinction matters a great deal. Because for all of Trump’s outrage over the fact that America buys more goods from overseas than it sells, the US exports far more services than it imports. (It’s a “services surplus” — the “rural juror” of econ jargon.)
In fact, the US is the biggest exporter of services in the world. That gives our trade partners leverage they could use against us.
“If Trump is serious about tariffs on movies, it’s a very dangerous escalation,” economist Justin Wolfers noted on Bluesky. “We would be extremely vulnerable to any service-based retaliation.”
The good news is, the president may not be serious. In keeping with Trumpian tariff tradition, he announced the import tax with few details in a late-night social media post with the kind of dramatic capitalizations you might associate with a teen group chat (“The Movie Industry in America is DYING a very fast death,” it begins.)
Asked about the tariffs in a press briefing Monday afternoon, Trump was less definitive than he’d been Sunday night, saying: “We’re going to meet with the industry; I want to make sure they’re happy about it.”
Spoiler alert, Mr. President: They’re not happy. Several movie studio and streaming industry executives who spoke with CNN are downright apoplectic, my colleagues Brian Stelter and Jamie Gangel write.
Shares of Netflix, Disney and CNN parent company Warner Bros. Discovery fell on Monday.
To be fair, Trump has hit on a real issue dogging Hollywood known as “runaway production.” For years, foreign cities like Toronto and Dublin have offered large tax breaks to film and television studios. In response, California Governor Gavin Newsom has proposed a massive tax credit to bring back production to Hollywood.
But industry sources told Brian and Jamie the idea of using tariffs “would represent a virtually complete halt of production … But in reality, he has no jurisdiction to do this, and it’s too complex to enforce.”
May 7, 2025
Newsom seeks Trump’s partnership regarding a $7.5 billion Hollywood tax break
California Gov. Gavin Newsom (D) is offering to partner with the Trump administration to create a federal film tax credit program worth at least $7.5 billion to boost domestic film production, his office said late Monday. The proposal came after President Donald Trump set Hollywood on edge by calling for massive tariffs on foreign-made films to address what he described as the “DYING” American film industry.
If the proposal comes together, it would be the largest government tax initiative for the film industry in U.S. history and the first such program at the federal level, a spokesperson for Newsom’s office said.
“America continues to be a film powerhouse, and California is all in to bring more production here,” Newsom said in a statement.
He added that California is “eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again.”
The White House did not immediately respond to a request for comment.
Newsom, a fierce Trump opponent, is making the request at a time when tariffs have upended the global economy and sowed uncertainty across many industries. Newsom sued the Trump administration last month to block the president’s sweeping tariffs, arguing they are causing irreparable harm to California’s economy.
Trump’s call Sunday night for 100 percent tariffs on films produced overseas, in which he described foreign films as a national security threat, puzzled insiders in the highly globalized industry as to its implications. It was not clear how such tariffs would be applied or how they might affect U.S. films shot overseas or involving production abroad, The Post reported.
Andrew deWaard, an assistant professor at the University of California at San Diego who studies the relationship between culture and commerce in the film industry, said the program proposed by Newsom on Monday is “highly unlikely” to go into effect.
“I can’t imagine in such a partisan atmosphere that Trump would want to be seen subsidizing California entertainment workers just as the tariffs are starting to negatively affect U.S. factory workers, farmers, truckers, etc.,” he said in an email.
“I think Newsom is calling Trump’s bluff,” he added. “… If Trump balks, which is likely, then Newsom can say he tried to be bipartisan.”
Newsom’s office described the proposed federal tax credit as a way to bolster American stories, create U.S. jobs and benefit the industry’s behind-the-scenes workers such as set builders and electricians.
The proposal would be modeled after California’s Film and Television Tax Credit Program that Newsom’s office said has generated more than $26 billion in economic activity and supported thousands of jobs across the state since its inception in 2009.
But there is debate over the effectiveness of such film tax credits. In testimony to the state’s Senate Revenue and Taxation Committee this year, Michael Thom, a professor at the University of Southern California who has researched tax incentives for film and television production, said such initiatives “fail to stimulate enough economic activity to justify their substantial cost.”
May 6, 2025
Apollo invested upwards of $100 billion, anticipating market turbulence due to tariffs
Apollo Global Management (NYSE: APO) says it is directing over $100 billion of capital into industries reshaped by trade friction. In a Q2 2024 investor briefing, the firm highlighted a multibillion-dollar allocation across private equity, credit and infrastructure to capitalize on reshoring trends, supply-chain reorientation and commodity arbitrage amid U.S.–China decoupling and new green levies. Apollo executives note that “private assets” can “offer a measure of stability during times of turbulence, such as the current stretch driven by U.S. President Donald Trump’s tariffs”. In effect, Apollo treats tariffs not merely as costs but as catalysts for value – redeploying capital from affected sectors to advantaged ones.
- Investment breakdown: Apollo says roughly $28 billion is earmarked for North American reshoring infrastructure. This includes semiconductor fabs and EV battery plants supported by the U.S. CHIPS and Science Act, and new duties (e.g. U.S. tariffs on Chinese steel) that improve domestic project economics. Another $19 billion goes to energy and metals logistics – for example, warehouse and transport assets that can arbitrage carbon-border taxes and critical-mineral import curbs. A further $14 billion is set aside for supply-chain finance: credit lines and working-capital support for companies moving manufacturing out of China into Southeast Asia or Mexico (reducing tariff exposure to roughly 4% vs. 19% on Chinese imports).
Apollo co-President Scott Kleinman puts it bluntly: “Tariffs are creating the most significant capital reallocation since the 2008 financial crisis.” His team views this shift as a once-in-a-decade rebalancing where firms must rebuild shorter, more secure supply chains.
Market Context: Rising Tariffs and Supply Shifts
Global tariff barriers are indeed on the rise. The U.S. now keeps duties on hundreds of billions of dollars of imports that average well above historical lows. For example, the Trump-era tariffs still cover over $300 billion of Chinese goods at rates from 7.5% up to 25%. And in 2024 the Biden administration approved further hikes: Chinese electric vehicles now face a 100% U.S. tariff, and solar panels 50%. New 25% duties also apply to certain medical supplies, lithium batteries and even China-made ship-to-shore cranes. (The U.S. now flatly bans EVs and advanced batteries from China, while quadrupling EV tariffs.) In short, import-tax burdens on high-value and strategic goods have jumped sharply (about double the 2016 level), reshaping sourcing economics.
The policy backdrop has spurred a massive supply-chain overhaul. Industry surveys suggest a large majority of leading companies have shifted production since 2022. For instance, a recent McKinsey survey found roughly 78% of Fortune-500 firms have at least partially diversified their supply bases away from China. Apollo itself has banked on this trend: it now controls a growing real estate footprint south of the U.S. border (reports note Apollo’s platform includes some 12 industrial parks in Mexico) to serve nearshoring. European green trade rules add to the mix – with planned carbon border tariffs reaching about $95 per ton of embedded CO₂ by 2030 – which further tilts advantage toward low-carbon supply hubs. Notably, Apollo’s commodity and resource portfolio returned 34% in 2023, underscoring the payoff from such policy-driven gaps.
Key Sectors in Focus
- Semiconductors: Apollo is plowing roughly $12 billion into chip manufacturing. This includes equity stakes in established players (GlobalFoundries) and emerging firms (e.g. “VoltChip” start-ups). In June 2024 Apollo announced a near-$11 billion investment to take a 49% stake in Intel’s new fab in Ireland – effectively subsidizing part of Intel’s $18.4 billion buildout. Such deals are aimed at capturing government incentives (like CHIPS Act subsidies) and the U.S. drive to onshore cutting-edge chip capacity.
- EV Materials: Apollo has allocated about $8 billion to critical battery raw materials. That includes projects in Chile and Canada to secure lithium and other inputs for North American EV supply chains. With tariffs and subsidies skewing autos’ geometry (e.g. U.S. duties on Chinese EVs, and local content bonuses under the Inflation Reduction Act), owning the upstream supply means higher margins.
- Logistics and Industrial Real Estate: Some $6 billion is targeted at U.S.–Mexico warehousing and transport hubs. The thinking is that sprawling cross-border logistics parks will benefit from the southward shift of manufacturing. Apollo (through funds like its ACORE vehicle) has bulked up on industrial REITs and logistics portfolios. These assets serve goods coming in from Asia via alternative routes or from nearshore factories, and thus can charge rents that fully factor in tariff and friction premiums.
No strategy is without headwinds. Numerous policy and market risks could blunt the playbook. For example, U.S. Section 301 tariffs on China have already been challenged at the WTO (China’s case DS543), and Congress or a future administration might roll back some measures. Similarly, some U.S. “green” levies could be softened or delayed following domestic political pressures (e.g. EU election outcomes may force renegotiation of carbon rules). Even where plants are built, capacity might overshoot demand: Goldman Sachs warns that up to 40% of U.S. battery cell capacitycould lie idle by 2026 absent stronger end-market growth. On Apollo’s own books, the $45 billion credit portfolio is exposed to 9% coupon lending and an estimated 5.2% default probability in a slowing economy – a reminder that higher rates and tariffs could strain borrowers.
Some industry veterans counsel caution. As RBC Capital Markets strategist Gerard Cassidy tersely observes, “Betting on tariffs is betting on politics.” In other words, asset prices tied to trade policy must factor in the risk of political change, not just economic logic.
Apollo is not alone in chasing trade-tailwinds. Other large asset managers have also announced bold commitments. Blackstone has cited roughly $50 billion of investment plans in Europe and emerging markets (notably data centers and Indian renewables) that ride parallel decoupling trends. KKR recently unveiled a $30 billion logistics fund targeting U.S. fulfillment centers (leveraging the e-commerce surge and re-shored inventory). Brookfield has dedicated about $20 billion to critical minerals and renewable energy worldwide, anticipating commodity supply strains. The competition underscores that supply-chain resilience – whether through warehouses, fiber routes or power plants – is increasingly prized. As Apollo’s chief economist Torsten Slok puts it, “In a multipolar world, supply chain resilience is the new prime real estate.”
Apollo’s strategy treats tariffs not as mere externalities but as alpha-generating catalysts. By deliberately allocating capital to the beneficiaries of trade fragmentation – domestic fabs, alternative routes, and non-Chinese suppliers – Apollo aims to earn outsized returns so long as U.S.–China tensions and green trade frictions persist. The firm’s success hinges on the assumption that global supply chains will remain balkanized for years, rather than reverting quickly to pre-trade-war norms. If tariffs and subsidies indeed endure or deepen, Apollo’s repositioning could pay off handsomely. If not, or if demand falters, the strategy faces a stark test.
By the Numbers: Key metrics and targets mentioned above include 100% (new U.S. tariff on Chinese EVs); 50% (tariff on Chinese solar panels); 25% (tariff on ship-to-shore cranes); 17% (year-over-year AUM growth in Q1 2025); $785 billion (Apollo’s assets under management, Mar. 2025); $43 billion (new capital raised by Apollo in Q1 2025); 21% (year-on-year jump in Apollo’s fee revenue for Q1); $11 billion (Apollo’s announced investment in the Intel Ireland fab JV); and $300+ billion (approximate value of Chinese imports still under U.S. tariffsreuters.com).
May 6, 2025
Trump wants to put a 100% tax on movies made in other countries, because he says Hollywood is “dying”
President Donald Trump called for a 100 percent tariff on movies produced overseas in a Truth Social post Sunday night, confounding studio executives and critics about what this could mean for the heavily globalized film industry.
“The Movie Industry in America is DYING a very fast death,” the president wrote Sunday night. “This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda!” he wrote. “Therefore, I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!”
“We’re on it,” U.S. Commerce Secretary Howard Lutnick wrote in an X post Sunday night.
On Monday, White House spokesman Kush Desai said via email: “Although no final decisions on foreign film tariffs have been made, the Administration is exploring all options to deliver on President Trump’s directive to safeguard our country’s national and economic security while Making Hollywood Great Again.”
The president’s claim that foreign movies represent a national security threat suggests that he may rely on a provision of a 1962 trade law that he has used in the past to impose tariffs on goods such as steel and aluminum. Under Section 232 of that law, the Commerce Department would have up to 270 days to complete an investigation of the alleged danger to national security caused by importing foreign films. At the conclusion of that probe, the president could impose tariffs.
Trump expanded his comments while speaking to reporters on Sunday. “Other nations have been stealing the movies — the moviemaking capabilities from the United States,” he said, according to video footage from C-SPAN.
“I’ve done some very strong research over the last week, and we’re making very few movies now,” the president said.
“Hollywood is being destroyed,” he added. “Other nations have stolen our movie industry. If they’re not willing to make a movie inside the United States, we should have a tariff on movies that come in.”
Trump cited governments that are “giving big money” to fund foreign-made films as a “sort of a threat to our country in a sense.”
Trump did not offer any specifics about which type of films this would impact. It remains unclear if these tariffs would apply to just foreign films, American-made films shot on location abroad, blockbusters involving postproduction overseas or other examples of cross-border production. It’s also unclear if any tariff would apply to television shows.
American-made films are often shot overseas in places like Canada, the United Kingdom and Australia, which offer incentives for productions to film there. Recent and upcoming tentpole movies, such as “A Minecraft Movie,” “Mission Impossible — The Final Reckoning” and “Jurassic World Rebirth,” were mostly or entirely filmed overseas. London has become a central locale for American-made films. Marvel’s next “Avengers” sequels are in production there.
It’s unclear how the Trump administration would apply a tariff on foreign-produced films, since movies can be considered a service, not physical goods. It’s also unclear what the value of movies are and what the criteria would be to identify films as an import.
The 2025 superhero film “Thunderbolts*,” for example, “was mostly shot in Georgia, Utah, and New York, but also had a scene shot in Malaysia,” raising questions about how big a tariff would be in such a case, according to an analyst report from Roth Capital Partners.
The uncertainty over how one would apply tariffs to the contemporary film industry is further complicated by the rise of streaming and global distribution in media, said Jennifer Porst, a professor of film and media at Emory University who studies the industry. A platform like Netflix “is not like a theatrical model where you could tax the box office,” she said. “You have subscriptions and advertising revenue … how does that directly correlate to any one movie or TV show?”
Expanding Trump’s second-term trade war to include services opens the United States to potentially punishing foreign retaliation. While the U.S. has long run a deficit in merchandise trade with the rest of the world, Americans routinely sell foreign customers more services than they buy.
Last year, the U.S. enjoyed a nearly $300 billion surplus in services trade. If the president persists with his plans to tax foreign-produced services such as films, U.S. trading partners could retaliate by erecting new barriers to U.S. films or other services related to travel, finance or insurance.
The American movie industry had $22.6 billion in exports and a $15.3 billion trade surplus in 2023 — including positive surpluses in every major foreign market — according to the Motion Picture Association’s latest economic impact report. The MPA declined to comment.
Shares in major media and entertainment companies fell shortly after markets opened Monday but recovered. Paramount, Netflix and Warner Bros. Discovery were down less than 2 percent by early afternoon, and Comcast and Disney were up slightly.
Leaders from hubs of film production — both domestically and abroad — reacted strongly to Trump’s announcement.
“We believe he has no authority to impose tariffs under the International Economic Emergency Powers Act, since tariffs are not listed as a remedy under that law,” Bob Salladay, senior adviser for communications to California Gov. Gavin Newsom (D), told Deadline on Sunday night.
“Nobody should be under any doubt that we will be standing up unequivocally for the rights of the Australian screen industry,” Australia’s home affairs minister, Tony Burke, said, according to Reuters.
“We’ll have to see the detail of what actually ultimately emerges. But we’ll be obviously a great advocate, great champion of that sector and that industry,” New Zealand Prime Minister Christopher Luxon told reporters.
Studio executives were left confused Sunday night by Trump’s announcement, according to the Wall Street Journal. Producers and industry veterans sounded off with fiery reactions, while critics suggested Trump doesn’t have the authority to impose tariffs on informational material related to films and artwork.
“A big part of this is what constitutes U.S. film. Is it where the money comes from, the script, the director, the talent, where it was shot?” Tim Richards, CEO and founder of the U.K.-based movie theater chain Vue Entertainment, told BBC Radio 4’s “Today” program on Monday.
Producer Randy Greenberg wrote in a LinkedIn post Sunday that tariffs would hurt Hollywood. “Putting a tariff on Movies shot outside the US will increase the cost of shooting and the studios will lobby the Exhibitors to raise ticket prices and then the audience will skip the theatre and then … well you see where this is going,” he wrote.
Actor Jon Voight speaks during a rally on Jan. 19. He is one of President Donald Trump’s “ambassadors” to Hollywood. (Evelyn Hockstein/Reuters)
Some analysts said tariffs could damage Hollywood at a time when it’s only beginning to collectively bounce back after covid-19 and 2023 labor strikes led to work stoppages.
Annual television production shot in Los Angeles declined 58.4 percent between 2021 and 2024, according to FilmLA, a not-for-profit that promotes on-location filmmaking in the region. Feature film production was up about 20 percent in 2024 but still down 27.6 percent from its five-year average, FilmLA found. While spending on U.S. film production has declined since 2022, it has increased in Canada, the United Kingdom, Australia and New Zealand, according to ProdPro, a research firm that tracks production data.
Tariffs would make many blockbuster movies shot abroad “financially unfeasible,” the Roth Capital Partners’ note said.
Large studios and distributors currently carry significant risk, according to a Wedbush analyst note. About 75 percent of Netflix’s content is produced internationally, the note estimated.
Trump has tapped several well-known film industry conservatives since taking back the White House, naming Jon Voight, Mel Gibson and Sylvester Stallone his “special ambassadors” to Hollywood. (Voight and Stallone did not respond to requests for comment.)
According to Deadline, Voight has been spending time with unions and moviemakers to see what problems they face in domestic production. Voight has reportedly been pushing a plan to revive Hollywood that included a foreign tax incentive, per Deadline.
Trump’s ambassadors might face a film production tariff themselves — Gibson’s upcoming “Passion of the Christ” sequel is expected to start shooting in Italy this summer. Gibson’s team declined to comment.
The announcement from Trump comes amid his administration’s attempt to reshape America’s arts and culture landscape. He now leads the Kennedy Center as its chairman after ousting many of its board members. Meanwhile, the National Endowment for the Arts, the National Endowment for the Humanities, the Institute of Museum and Library Services and the Corporation for Public Broadcasting have all faced changes as Trump has sought to redirect their funds or cut their budgets entirely.
Filming abroad is not new but has increased in recent years, due in part to labor strikes in the U.S. that led to work stoppages in 2023, and the increasingly global nature of production companies like Netflix, Porst said. There are also contract provisions in the U.S. that can make production more expensive than filming abroad, she said.
May 5, 2025
Trump has disputes with all of academia, but the Ivy League is his main focus
There it was for all to see, President Trump’s tangled relationship with the Ivy League, delivered in a burst at his rally in Michigan on Tuesday night.
“He’s the top,” the president said of Dr. Mehmet Oz, the TV celebrity doctor he chose to oversee Medicare and Medicaid. “I mean, he went to Harvard.” But then: “I shouldn’t even mention that anymore because that used to be a good thing. Today it doesn’t mean much.”
There was this about Gen. Mark A. Milley, the president’s first-term choice as chairman of the Joint Chiefs of Staff: “You know, he went to Princeton,” Mr. Trump said in 2019. “And he went to Columbia.” But then: “I’m not sure, was that a good thing or a bad? Did I like it or not?” The president never answered, although he called General Milley, whom he has since reviled, a “smart cookie.”
And on Justice Brett Kavanaugh: “He was, I believe, No. 1 at Yale,” Mr. Trump said in 2018 of his Supreme Court nominee. “Is that a correct statement?” It was not, since Yale does not calculate class rank.
What is correct is that the president’s war on academia has focused intensely on the Ivy League, the richly endowed collection of eight schools, most founded in the colonial era, that cost $90,000 or more a year, send a disproportionate number of graduates into America’s leadership class and accounted for less than 1 percent of the nation’s undergraduate enrollment in the fall of 2022.
Mr. Trump’s attacks on this elite group — Harvard, Yale, Princeton, Columbia, Cornell, Brown, Dartmouth and the University of Pennsylvania — have endeared him to his political base. He is withholding, or threatening to withhold, billions of dollars in federal funding from six of the eight schools because, he says, they are citadels of antisemitism and liberal indoctrination. Officials in higher education acknowledge failures, but call the president’s crackdown a perilous threat to academic freedom.
The Trump administration has targeted many other colleges and universities for potential antisemitism, some 60 in all. And yet the eight Ivies are cultural touchstones for Mr. Trump. Beyond the politics is a complex brew of resentment and reverence that the president, an Ivy League graduate himself, has long harbored for a club that has never really accepted him.
“They don’t return the love to him,” said Alan Marcus, a business and political consultant who oversaw Mr. Trump’s public relations from 1994 to 2000. After the president’s companies went through multiple bankruptcies in the 1990s, Mr. Marcus said that as part of an attempted comeback for his client he tried to get Mr. Trump to deliver a college commencement address or receive an honorary degree.
“I called a few people I knew on boards,” Mr. Marcus said. “But I got essentially laughed at.”
Timothy L. O’Brien, a biographer of Mr. Trump, said the president’s ire about the upper echelon of academia was not surprising. “He has a long track record of criticizing elites that he desperately wants to be accepted by,” Mr. O’Brien said. As far as the Ivy League, he said, “he could barely wait to get in himself.”
(Mr. O’Brien, a former New York Times reporter and editor, faced a $5 billion defamation lawsuit from Mr. Trump after Mr. O’Brien’s 2005 book, “Trump Nation: The Art of Being the Donald,” put Mr. Trump’s wealth at $150 million to $250 million rather than the billions of dollars claimed by the president. The case was dismissed in 2009.)
On Friday, Mr. Trump renewed his recent threats to revoke Harvard’s tax-exempt status, even though federal law prevents the president from ordering the I.R.S. to conduct tax investigations. White House officials have said the I.R.S. would make its own determination about Harvard. In an interview with The New York Times last week, Harvard’s president, Dr. Alan Garber, said the university had “problems that we needed to address” but added that the Trump administration’s oversight demands had “gone too far.”
Earlier in the week, it was Mr. Trump’s alma mater, the University of Pennsylvania, that was in the cross-hairs. The Department of Education’s Office of Civil Rights ruled on Monday that the school had violated Title IX by allowing a transgender swimmer to compete on the women’s team, and threatened referral to the Justice Department if Penn did not restore all honors to female athletes that had been “misappropriated by male athletes competing in female categories.”
The Trump administration had already suspended $175 million in federal funding to the university over the issue.
University of Pennsylvania officials have not commented.
Mr. Trump’s relationship with his alma mater is complicated. He has never delivered a commencement address there, although former President Joseph R. Biden Jr. and Hillary Clinton have. Penn has also not awarded Mr. Trump an honorary degree.
Mr. Trump was admitted in 1966 as a transfer student from Fordham University in the Bronx to Penn’s undergraduate Wharton School, where he focused on studying real estate, the family business. James T. Nolan, a close friend of the president’s older brother, interviewed him for admission.
“He answered my questions,” Mr. Nolan, now 86, said in an interview. “He wasn’t particularly outgoing.” Mr. Nolan recalled that Mr. Trump had a “high B average, maybe something of that sort” from Fordham, and that a more senior member of Penn’s admissions staff reviewed Mr. Trump’s transcripts and made the decision to accept him.
“People think of how difficult it is to get into the Ivy League schools now,” Mr. Nolan said. “But this was 1966. It wasn’t that difficult.’’
Mr. Nolan remembered Mr. Trump as something of a loner on campus. “He seemed to me to be rather isolated,” he said. “I don’t recall seeing him with people. I do recall that he went home every weekend to New York to do some work with his dad.”
In the years since his 1968 graduation, Mr. Trump has regularly cited his Penn degree as evidence of his intelligence. “I went to the Wharton School of Finance,” he said in 2015 in typical remarks in Phoenix. “I’m, like, a really smart person.” Mr. Trump has also claimed that he was first in his class, although the program from the 1968 Penn commencement does not list him among those students with academic honors. He has never made his grades public.
Michael D. Cohen, Mr. Trump’s former lawyer and fixer, said in testimony to Congress in 2019 that the president had instructed him to send threatening letters to his alma maters, warning of jail time for anyone who released his transcripts.
“I’m talking about a man who declares himself brilliant but directed me to threaten his high school, his colleges and the College Board to never release his grades or SAT scores,” Mr. Cohen told the House Oversight Committee.
Mr. Marcus, Mr. Trump’s former public relations man, recalled a conversation he once had with Mr. Trump. “He said to me, ‘You’re really smart. What’s your IQ?’ Well, who knows what your IQ is? So I made up a number, 190. And he said, ‘That’s pretty good. Mine’s higher.’”
Mr. Trump has fewer Ivy Leaguers in his current cabinet than at the start of his first term, and fewer than other recent presidents. But he does have them — five out of 23, including himself.
Vice President JD Vance, who has degrees from Yale Law School and Ohio State, has attacked elite academia as vigorously as Mr. Trump, notably in a 2021 speech when he was running for Senate in Ohio.
“If any of us want to do the things that we want to do for our country and for the people who live in it, we have to honestly and aggressively attack the universities in this country,” he told the National Conservatism Conference, drawing applause. He concluded with a rallying cry citing former President Richard M. Nixon: “He said, and I quote, ‘The professors are the enemy.’”
And yet, Mr. Trump highlighted the academic pedigrees of the Ivy Leaguers in his cabinet in the announcements of their nominations, which is something he did not always do for those who attended less elite schools.
Defense Secretary Pete Hegseth got a shout-out for his degrees from Princeton and Harvard, for example. But there was no mention of Linda McMahon’s degree from East Carolina University or Commerce Secretary Howard Lutnick’s diploma from Haverford College.
There are some exceptions to Mr. Trump’s view that an Ivy League diploma is a mark of intelligence.
Consider John R. Bolton, one of Mr. Trump’s ousted first-term national security advisers and a graduate of Yale College and Yale Law School. Mr. Bolton wrote a book about his time working for Mr. Trump that enraged the president, who retaliated early this year by revoking Mr. Bolton’s Secret Service protection, despite death threats that Mr. Bolton faces from Iran.
Mr. Bolton said his degrees never seemed to impress the president very much.
“He likes to insult me with how dumb I am,” said Mr. Bolton, who pointed out that his 17-month tenure still makes him Mr. Trump’s longest serving national security adviser.
May 5, 2025
Tariffs uncertainty didn’t prevent Apple Services, with contributions from TV+ and Music, from achieving $26.6 billion in quarterly revenue
Tech giant Apple, led by CEO Tim Cook, delivered revenue of $95.36 billion for the second quarter of 2025 overshadowed by sweeping new tariffs imposed on China by the Trump administration.
The iPhone maker’s overall revenues, up 5 percent year-on-year, surpassed analyst expectations after a consensus estimate from FactSet forecast Apple would record $94.4 billion in revenue.
Apple’s services segment, which includes Apple TV+, Apple Music, Apple Arcade and other products, posted overall revenue of $26.65 billion, up 11.6 percent from a year-earlier $23.8 billion and a slight miss on an analyst consensus estimate for $26.70 billion for Q2 2025.
The iPhone maker reported net income of $24.7 billion, up from $23.6 billion in 2024, and earnings per-share came in at $1.65, up from a year-earlier $1.53, and beating an analyst forecast of $1.63 for the latest quarter.
During an after-market analyst call, Apple execs are expected to discuss a potential impact on demand for its products from the U.S.-China trade war and how the tech giant will deal with fall out from the Trump administration’s global trade war affecting supply chain costs out of China, Vietnam and India.
Tariff exemptions have been allowed for smartphones and other electronics, if only temporarily. But the looming talks on reducing or ending sweeping new tariffs on China has rattled investors for its potential impact on Apple’s global-spanning business.
Other tariffs-induced impacts, including recessionary pressures on a wobbly economy leading to lower consumer spending, could impact subscriber numbers for Apple TV+ and Apple Music and whether iPhone users upgrade to the newer handsets. The tech giant reported “record viewership” for Apple TV+ during the second quarter, without breaking out numbers.
CEO Cook during an analyst call pointed to plans to spend around $500 billion over four years in the U.S. market, and to open a factory for “advanced server manufacturing” in Texas this year for high-performance computing, data centers and other applications. But that was far short of answering calls from U.S. President Donald Trump to move production of the iPhone and other popular electrical products to the U.S., rather than continue to off-shore manufacturing.
Cook said the tariffs impact on Apple during the second quarter to March 29, 2025 was “limited” as the company managed its supply chain costs and product inventory and consumers bought new products before Trump’s tariffs regime kicks in. But making projections for the third quarter and the rest of 2025 has been more problematic.
Cook did forecast the current global tariff rates, absent new ones to come from the Trump administration, would add around $900 million to costs at Apple for its April-to-June quarter. “I don’t want to predict the future, because I’m not sure what will happen with the tariffs,” the Apple CEO added when pressed by an analyst to forecast future tariff-related costs for the tech giant, which so far have mostly hinged on a product’s country of origin.
“As we look ahead, we remain confident that we will continue to build the world’s best products and services, confident in our ability to innovate and enrich our users’ lives and confident that we continue to run our company in a way that has always set Apple apart,” the Apple boss did tell analysts in earlier prepared remarks on the conference call.
Cook spoke against a global market background where Apple is caught between being unable to move the manufacture of electronic products to the U.S. market without years of delay to new American factories, and facing likely consumer pushback for its marquee products in China and elsewhere internationally as Trump imposes fast-shifting tariffs to reshape global trade.
Apple is working hard to move production of its iPhones and other electronic products out of China, which faces the steepest U.S. tariffs globally, based on the country of origin for manufacturing. For the current third quarter to June 2025, Cook predicted India will be where the “majority” of iPhones sold in the U.S. originate, and Vietnam will be where virtually all iPads, Mac computers, Apple Watches and AirPods are made.
“What we learned some time ago was that having everything in one location had too much risk with it, and so we have over time and with certain parts of the supply chain — not the whole thing, but certain parts of it — opened up new sources of supply, and you could see that kind of thing in the future,” Cook said in answer to an analyst question about supply chain risks.
Cook didn’t make predictions on the mix of country of origins to produce iPhones and other Apple electrical products beyond the third quarter. To weigh possible future tariff-related costs, the Cupertino, California-based company and other major U.S. retailers face a Section 232 investigation due to the Trade Expansion Act of 1962, where the U.S. Secretary of Commerce is probing the impact from imports on U.S. national security.
May 4, 2025
April saw a robust increase of 177,000 jobs added by employers, occurring amidst tariff concerns
The U.S. labor market remained resilient in April, with employers adding 177,000 jobs, a solid showing despite ongoing economic uncertainty that has caused many employers to put hiring plans on hold.
The unemployment rate held steady at 4.2 percent, near historic lows, according to a jobs report released Friday by the Labor Department. Economists had largely expected growth to cool, following the addition of 185,000 jobs in March, figures that were revised downward.
Monthly Change in Non-Farm Jobs
Monthly change in non-farm jobs

Seasonally adjusted; the figures for the most recent two months are preliminary
Source: Bureau of Labor Statistics

The labor market has been a pillar of strength for years, helping to prop up the economy through a period of high inflation and elevated interest rates. Economists have been on high alert that surrounding weakness — including data this week showing the U.S. economy shrank in the first three months of 2025 — could drag down the labor market. But, so far, the slowdown has been gradual.
“Today’s report is a welcome surprise,” Ger Doyle, U.S. manager at ManpowerGroup, wrote in an email. “Overall, the labor market is not in crisis but at a crossroads.”
Employers continued to add key services jobs in April, with gains in health care, transportation and warehousing, financial activities, and social assistance leading the way. Federal government employment declined for the third straight month, reflecting ongoing layoffs and firings by the Trump administration.
The retail industry also lost jobs in April, as uncertainty over new tariffs led many consumers and businesses to rethink their plans. Americans are spending more cautiously, by cutting back on travel and dining out, while many employers are loading up on equipment but pausing hiring and expansion plans.
The strength in the labor market was enough to buoy the stock market. All three major indexes were up by more than 1 percent Friday around lunchtime, with the Dow Jones Industrial Average jumping more than 500 points.
The solid report also makes it likely the Federal Reserve will hold interest rates firm at its meeting next week. Even though inflation is cooling, policymakers have expressed concerns that tariffs could push prices up further.
President Donald Trump on Friday cited the April jobs report as “more good news” in the economy and suggested the central bank — which operates independently of the government — should slash borrowing costs. “THE FED SHOULD LOWER ITS RATE!!!,” he wrote on his social media site, Truth Social.
But many economists say it’s too soon to declare victory. It could take several more months before tariff-related disruptions work their way through businesses’ hiring practices, said Daniel Zhao, lead economist at job-review site Glassdoor.
“There is still a big question mark hanging over the job market,” he said. “Clearly, the full impacts from the tariffs are not here yet.”
The question now is how long the labor market can withstand rising uncertainty across the economy. Gross domestic product, the broadest measure of economic activity, contracted by 0.3 percent in the first quarter of the year, a sudden pullback after almost three years of steady growth. Economists attributed much of that drop to a mismatch in trade, as U.S. businesses stockpiled imports ahead of tariffs, as well as a large decline in federal government spending.
Already, there are signs of strain in the job market. Employers are posting fewer openings, and the number of people who report being permanently out of a job is at its highest level since 2021. Last week, 241,000 Americans filed new applications for unemployment benefits, an increase of 18,000 from the week before.
Widespread funding cuts and layoffs by the U.S. DOGE Service (the Department of Government Efficiency), which began earlier this year, may also become more evident in April jobs data. Even though federal workers account for a small share of the total workforce, economists say recent layoffs and firings are likely to ripple into other industries across contracting companies and nonprofits.
“Employment tied to industries that receive bulk contracting dollars, such as health care, scientific research, education, transportation and manufacturing, are most vulnerable,” Seema Shah, chief global strategist at Principal Asset Management, said in an email.
The chill from federal funding freezes has already been far-reaching. Brittany Frodge, a lecturer at Ohio State University, recently found out she will be out of a job starting May 15. Her position teaching Spanish will soon go to a graduate student.
“Everywhere I look, there’s a hiring freeze because there’s so much paranoia and uncertainty about the new administration,” she said. “There aren’t as many tenure-track positions, and there are severe limits on research.”
Frodge has applied for every opening she has found that fits her qualifications, she said: a grand total of two, including one in Arkansas. For now, her husband still has a job at Ohio State, teaching in the philosophy department, but she worries about long-term stability.
“It’s a really difficult moment to get work,” she said.
May 3, 2025
Exxon and Chevron announced lower profits as they prepare for tariffs
The two largest U.S. oil companies reported their lowest first-quarter profits in years on Friday as they braced for the economic fallout from President Trump’s trade war, which has weakened consumer confidence and pushed oil prices down.
U.S. crude prices slipped below $60 a barrel this week, a threshold below which many companies cannot make money drilling new wells. Crude oil is now about $20 a barrel cheaper than it was just before Mr. Trump took office. Not only is oil fetching less, companies are paying more for steel and other materials because of tariffs the president has imposed.
There are signs that some companies are already pulling back as a result.
As of last week, the number of rigs drilling wells in the Permian Basin, the largest U.S. oil field, had fallen 3 percent in a month, according to Baker Hughes, an oil field service provider. That company’s customers have been putting off discretionary expenses, and spending across the industry is likely to fall this year, Baker Hughes executives said last week.
Chevron, the second-largest U.S. oil company, said months ago that it would spend less in 2025, and it has not changed its annual production or capital spending forecasts since. However, the company said that it would pare its spending on share buybacks in the second quarter, compared with the first three months of the year.
“We’re comfortable with where we are right now,” Eimear Bonner, the company’s chief financial officer, said in an interview. “We’ve navigated cycles before. We know what to do.”
The financial results that Chevron and Exxon Mobil, the largest U.S. oil and gas company, reported on Friday reflect the market before Mr. Trump announced his latest round of tariffs. Around the same time, members of the producers cartel known as OPEC Plus surprised the market by saying its members would speed up plans to pump more oil.
Chevron’s first-quarter profit fell more than a third to $3.5 billion, missing analyst expectations, as the company earned less for each barrel of oil it produced. Lower margins in refining also hurt earnings.
Exxon’s profit of $7.7 billion in the first three months of the year also came up shy of analyst forecasts collected by FactSet. Earnings fell around 6 percent from a year earlier.
“In this uncertain market, our shareholders can be confident in knowing that we’re built for this,” Darren Woods, Exxon’s chief executive, said in a statement.
Chevron’s stock price fell more than 2 percent in premarket trading. Exxon’s rose about 1 percent.
The question for many companies is how long oil prices will remain around $60 a barrel or less. If they slip to $50, domestic production could fall roughly 8 percent in a year, according to S&P Global Commodity Insights. The United States is the world’s largest oil producer.
Companies are cutting costs where they can as they wait for greater clarity on U.S. trade policy, said Joseph Esteves, chief executive of Maine Pointe, a consulting firm that specializes in operations and supply chain issues.
“It’s getting to the point of no rock unturned, no couch cushion unexplored,” Mr. Esteves said.
Ms. Bonner said Chevron was experiencing a “limited direct impact” from tariffs. The company has been working to mitigate the effects by buying supplies such as steel locally, she said.
Chevron faces a late-May deadline to wind down activity in Venezuela after Mr. Trump took steps to reverse a Biden-era policy that allowed more oil to be produced in the country. The new rules are already having an effect. The company has been unable to load oil onto ships to be exported because of changes to its license, Ms. Bonner said.
“We’re just continuing to engage with the administration on the topic,” she said.
May 3, 2025