It’s “Liberation Day” morning and as the sun rises we still don’t know what tariff measures are waiting to be unwrapped. Even smaller-than-feared levies are likely to have big ramifications.
The key tests for President Donald Trump’s Rose
Garden announcement are likely to be how broadly tariffs are applied, at what levels, and whether there are additional sector-specific measures.
In a worst-case scenario, there could be a 20% across-the-board
increase to tariffs on U.S. imports. The resulting price rises would cost the average household the equivalent of between $3,400 and $4,200, depending on the level of retaliation by other countries, according to the Budget Lab at Yale.
More moderate options would include a 10% universal tariff, or a sliding scale of reciprocal levies on a limited number of trading partners, with exemptions in some industries.
The mood seems to be darkening in the U.S. economy and even
smaller actions would likely cause a long-term drag. The ISM manufacturing survey on Tuesday fell more sharply than expected and the prices index surged, indicating firms are already adapting
to the expected tariff changes. The Atlanta Fed’s GDPNow model is forecasting that U.S. real gross domestic product contracted 1.4% in the first quarter, after adjusting for gold imports.
Perhaps the market’s biggest hope is that no matter what the numbers, Trump signals that this is the end to the stream of tariff threats. The best gift he could give investors, as the sun sets, is the certainty to be able to value a company’s future earnings—if they get that, then the headline numbers might not matter so much.
—Adam Clark
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Tariffs Will Hit the Oil Patch. What’s Next Is Anyone’s Guess.
Oil executives have to weigh their next moves as President Donald Trump transforms global trade. Energy products are the U.S.’s biggest exports and among its biggest imports, putting them in the front lines of a trade war. The administration’s shifting policies make price and demand forecasts difficult.
- A global economic contraction because of tariffs could cut demand for energy and slash prices. Goldman Sachs cut its forecast for gross domestic product by half a percentage point because of tariffs. Analysts believe economic trouble in the U.S. and Europe could shave oil prices by $1 a barrel.
- U.S. benchmark oil is about $71 a barrel. Trump has threatened to restrict oil flows from Russia and Venezuela by raising import taxes on products from countries that buy their oil. That could lift energy prices. Tariffs on oil from Canada and Mexico likely would force U.S. gasoline prices higher.
- The oil market is on the brink of oversupply, and OPEC just decided to start producing more crude. Oil producers have complained that Trump’s 25% global tariffs on steel and aluminum imports make it costlier for them to drill, forcing some to rein in expansion plans.
- China has placed 15% retaliatory tariffs on their imports of liquefied natural gas from the U.S., leading LNG shipments to be rerouted away from China. And Trump’s threats involving Venezuela appear directed at products from China, which is the biggest importer of Venezuelan oil.
What’s Next: Canada is the U.S.’s largest source of imported crude oil. Trump has said that Canadian energy would be subject to 10% tariffs and Mexican energy would be subject to 25%. Both those tariffs are paused but could come back today.
—Avi Salzman
Republicans Lose Key Wisconsin Race Despite Musk’s Millions
Republicans fell short in a closely watched state judicial race in Wisconsin on Tuesday marked by massive spending by Tesla CEO Elon Musk, but held on to two deeply red U.S. House seats in Florida.
- The Wisconsin race for the State Supreme Court in particular was defined by Musk’s spending, which reached more than $20 million and helped make it the most expensive state judicial race in U.S. history.
- Despite those efforts, progressive Susan Crawford defeated President Donald Trump-endorsed Brad Schimel for a seat on the State Supreme Court, the Associated Press projected.
- In Florida’s First District, Republican Jimmy Patronis defeated Democrat Gay Valimont in the race
to replace former Rep. Matt Gaetz, who was Trump’s first pick to be attorney general. Gaetz withdrew amid an ethics investigation.
- In the state’s Sixth District, Republican Randy Fine defeated Democrat Josh Weil to fill the seat vacated by Mike Waltz, who became Trump’s national security adviser. The House victories in particular were a relief for Republican lawmakers, who will now have extra breathing room to advance Trump’s legislative agenda.
What’s Next: The elections gave voters their first chance to weigh in on Trump and Musk’s attempt to
reshape the American economy and government. The results didn’t give the GOP a reason to panic, but there were warning signs that Trump’s power and Musk’s money have their limits.
—Joe Light
Top AI Researcher Says She’s Leaving Meta Platforms
An executive in Meta Platforms’ artificial intelligence research group, which is key to the company’s future, announced plans to leave her job after eight years. Joelle Pineau said on LinkedIn she is leaving May 30. Her departure comes as Meta CEO Mark Zuckerberg plans to roll out a leading AI assistant this year.
- Pineau, who heads Meta’s
Fundamental AI Research Group, or FAIR, said it was time to make way for others to pursue the work, as the AI race accelerates and the company prepares for its next chapter. Meta expects capital spending of $60 billion to $65 billion this year, partly driven by generative AI.
- Pineau’s unit is home to Meta’s open-source large language model, called Llama, which powers Meta’s AI chatbot, and has worked on technologies from voice translation to image recognition. Meta’s AI rivals include Microsoft, Amazon.com, OpenAI’s ChatGPT, Elon Musk’s xAI, and Alphabet’s Gemini.
- Meta AI said on March 19 that it had begun rolling out its chatbot across 41 European countries. With over 700 million
monthly active users and its European expansion, “the path to one billion users is in view,” as is Meta’s likelihood for monetization, New Street research analyst Dan Salmon wrote.
- Meta has made its Llama model open source, meaning developers can access the code for free and build apps and programs on top of it. Meta’s
AI chatbot can edit Facebook posts and answer questions through Instagram’s direct messages.
What’s Next: A Meta spokeswoman said Pineau helped push breakthroughs to advance its products. Pineau, who is also a professor at McGill University in Montreal, said she plans to take time off to observe and reflect before “jumping into a new adventure.”
—Angela Palumbo and Janet H. Cho
