Good morning. Andrew here. Hope you had a great July 4 weekend. This morning is turning out to be especially busy: President Trump has a new trade deadline — and is threatening to return tariff levels on countries that don’t meet it to the astronomical levels proposed in April. My colleagues and I are looking at whether that threat is real. And Elon Musk says he is starting a new political party and is criticizing Trump again (and is even making new, veiled references to Jeffrey Epstein.) We dive into all of it and what his investors may be thinking today. (Was this newsletter forwarded to you? Sign up here.)
A new tariff deadlineNow that President Trump has pushed his signature domestic policy bill over the finish line, his focus has returned to his trade war, ahead of a pivotal week to lock in deals or reimpose tariffs. Global companies are bracing for a series of deadlines. Trump announced yesterday on Truth Social that “UNITED STATES TARIFF Letters” would begin going to many trade partners today. What will be in the letters isn’t clear, but they appear meant to jump-start trade talks as the Trump administration falls far short of its goal of striking 90 deals in 90 days. The administration may be trying to buy more time. Treasury Secretary Scott Bessent and Howard Lutnick, the commerce secretary, said yesterday that sweeping tariffs probably won’t kick in until Aug. 1 for countries that hadn’t yet forged a deal. That’s a bit later than the July 9 deadline that Trump had previously threatened. This ultimately may be just a three-week extension, but it could be enough time for companies to import more tariff-free shipments. “That means that, allowing for some stockpiling ahead of Christmas, consumers may not experience the inflation spike from these taxes until January next year — assuming that Trump does not retreat again,” Paul Donovan, the chief economist for UBS Global Wealth Management, wrote in a research note this morning. Bessent signaled that breakthroughs were coming. The U.S. has only reached two preliminary deals, with Britain and Vietnam. “I would expect to see several big announcements over the next couple of days,” Bessent told CNN’s “State of the Union.” Countries that don’t reach agreements “will boomerang back” to the punitive reciprocal tariff rates that Trump had previously announced, Bessent vowed. That said, it’s worth noting that the two deals reached so far are missing a lot of key details. And the administration’s trade negotiators have a lot on their plates: “People are just extremely stretched,” Wendy Cutler, a vice president of the Asia Society Policy Institute and a former U.S. trade negotiator, told The Times. India is seen as being among the closest to reaching a deal. But late yesterday, Trump declared on Truth Social that any country aligned with “the Anti-America policies of BRICS” — the economic bloc that includes India, China and Brazil — would face “an ADDITIONAL 10% Tariff” with no exceptions. While Trump didn’t provide context, leaders of BRICS nations yesterday condemned last month’s military campaign against Iran by the U.S. and Israel.
TikTok is reportedly building a new U.S.-specific version of its app. The Chinese-owned video platform is planning to roll out the app on American platforms by Sept. 5, according to The Information, as the Trump administration negotiates with an Oracle-led investor group to buy control of TikTok’s U.S. business. President Trump said recently that his administration would soon begin discussions with Beijing about such a deal. The Justice Department and the F.B.I. conclude that Jeffrey Epstein died by suicide. Both organizations have determined that the convicted sex offender and financier wasn’t murdered, nor that he had blackmailed prominent business and political leaders or kept a “client list,” according to Axios. The announcement drew skepticism from some of Trump’s base — several administration officials, including the F.B.I. director Kash Patel, had previously asserted that Epstein was killed — and from Elon Musk, who previously accused Trump of being mentioned in Epstein’s files. Apple challenges a huge E.U. fine related to its App Store. The iPhone maker said it would appeal a €500 million ($580 million) penalty by the European Commission, the bloc’s executive arm, over rules meant to keep developers from steering users to make purchases outside its App Store. (Apple collects a bigger fee from in-platform sales.) The tech giant’s response comes amid greater pressure around the world on its restrictive app policies. “Off the rails”Elon Musk appears undaunted in his promise to create a new political party after President Trump signed into law a sweeping policy bill expected to drastically increase the federal debt. Obviously, Musk has the means, and seemingly the will, to organize and promote a political organization. But beyond the daunting odds that independent parties face in American politics, investors and analysts are increasingly worried that an increasingly exasperated Trump could severely punish the tech entrepreneur’s companies. “The America Party is needed to fight the Republican/Democrat Uniparty,” Musk posted on X late yesterday. He hasn’t filed any Federal Election Commission paperwork to create the organization, but the billionaire posted that he planned to field at least a handful of congressional candidates in next year’s midterms. The plan drew the approval of some prominent corporate figures, including Mark Cuban and the financier Anthony Scaramucci. Trump appears increasingly annoyed by his former backer. From a post on Truth Social yesterday: I am saddened to watch Elon Musk go completely “off the rails,” essentially becoming a TRAIN WRECK over the past five weeks. He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States - The System seems not designed for them. The one thing Third Parties are good for is the creation of Complete and Total DISRUPTION & CHAOS, and we have enough of that with the Radical Left Democrats, who have lost their confidence and their minds! Trump attributed Musk’s pique to the elimination of what the president called an electric vehicle mandate that would have eventually forced Americans to buy E.V.s. (There was never a federal mandate, but the recently passed legislation scrapped subsidies for E.V.s.) Musk argued that he was more outraged by the cost of the bill, which the nonpartisan Congressional Budget Office estimates would add more than $3 trillion to the national debt. “What the heck was the point of @DOGE if he’s just going to increase the debt by $5 trillion??” Musk wrote on X, referring to the Department of Government Efficiency cost-cutting initiative he had spearheaded until May. Shares in Tesla are down nearly 7 percent in premarket trading, as investors worry about potential retribution. (We’ve outlined the risks of Musk’s fights against Trump to his companies before; in short, many rely on government subsidies and contracts, and would be hurt by tighter regulations.) Here’s what the tech analyst and Tesla bull Dan Ives wrote to investors yesterday: With the autonomous future ahead and the AI Revolution in full force Musk/Tesla do not need to keep poking the bear as Trump can create more hurdles for Musk/Tesla/SpaceX over the coming years if this political battle gets nastier heading into mid-terms in 2026. Treasury Secretary Scott Bessent added that Musk could feel pressure from Tesla’s board if he proceeds. “I imagine that those board of directors did not like this announcement yesterday and will be encouraging him to focus on his business activities, not his political activities,” Bessent told CNN yesterday. (Whether that would come to pass — Tesla’s board has been criticized for being deferential to Musk — is unclear.) Musk doesn’t face pressure just in the U.S. Tesla’s sales in China, a country increasingly central to Tesla’s future amid challenges at home and in Europe, are dropping amid pressure from domestic competition. And with the feud with Trump eroding Musk’s geopolitical capital, Beijing officials no longer see the tech billionaire as the asset he once was, according to The Wall Street Journal. Number of the day: $200,000Some tech companies are offering as much as that to hire data scientists specializing in artificial intelligence, according to a recent report by J. Thelander Consulting, a compensation data and recruiting firm. It’s the latest sign of the increasingly expensive race to stock up on A.I. talent.
Texas floods renew insurance fearsThe death toll from this weekend’s flash floods in Central Texas has surpassed 80 and forecasters warn that more dangerous downpours are on the way. The damage toll is still unclear. But the flood, focused in Hill Country northwest of San Antonio, is renewing the focus on a national insurance crisis as climate calamities, including extreme rain events, become more frequent, and vulnerable communities struggle to invest in warning systems and disaster prevention. The latest: Among the confirmed dead are 28 children. Ten girls from a summer camp were still missing. Gov. Greg Abbott of Texas called the camp flooding “nothing short of horrific.” Insurance is poised to be in the spotlight once recovery efforts begin. Texas is among the most expensive states for home insurance. Premiums there have been climbing because of extreme weather in the hurricane-prone coastal regions and inland communities, too, according to The Houston Chronicle. The insurance gap in Texas is also widening, according to a recent report from Neptune Flood, a private flood insurer. The majority of the 2.1 million properties at risk of flood damage are uninsured, the report found. Across Texas, only 7 percent of residential properties have flood coverage. The insurance turmoil extends far beyond Texas. Florida, Louisiana and other Gulf Coast states are vulnerable to hurricanes; California to wildfires. But climate disasters have become more intense and more frequent nationwide, forcing insurers to abandon some markets they deem “uninsurable.” Add to that the Trump administration’s budget cuts, which are already generating scrutiny in the fallout of the Texas disaster. Vacancy rates at the National Weather Service offices in the region have climbed this year, The Times reported. Some experts are questioning whether staffing shortages made it harder for the forecasting agency to coordinate with local emergency managers. Another wild card: President Trump has called for eliminating the Federal Emergency Management Agency at the end of the year and shifting disaster relief efforts “down to the state level.” Yesterday, he directed federal resources to Texas, but deflected questions about the future of FEMA. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
Deals
Politics, policy and regulation
Best of the rest
|
