Markets go up and markets go down, but usually the chief executive of the United States does everything in his power to move them in one direction: up. Not this time, though. President Donald Trump’s tariff two-step and his efforts to use Tesla tool Elon Musk to slash the federal workforce are throwing the economy into a spin from which it may prove difficult to pull out. Corporate chieftains popped Champagne corks on Trump’s election, looking forward to looser regulation and lower interest rates, but as I write this, the Dow is down 2,674 points, or 6%, since Trump took office less than two months ago.

Now CEOs are reckoning with their refusal to take seriously Trump’s claim that he’d take a chainsaw to the budget (which many corporations rely on) and slap tariffs on everything that moves across a border. Trump’s entourage managed to pull the U.S. back from full disaster on Tuesday, persuading him to call off an extra set of tariffs on Mexico and Canada, just as fiery Ontario Premier Doug Ford rolled back a plan to put 25% tariffs on Canadian electricity exports to the U.S. (Cheap Canadian hydropower helps keep electric bills down across the Northeast and the Rust Belt.) Still, by Thursday morning, the Dow was down 7% for the week and down 9% from its all-time high on January 30.

None of this has been good for consumer’s wallets. While inflation slowed more than expected in February, posting the first decline in more than five months, it’s still hovering far above the Fed’s ~2% target rate, with the CPI at 2.8% for the 12 months ended in February. On a monthly basis, prices rose 0.2%, versus 0.5% in January.

And Trump seems to be delighting in the tariff fight. Canada, hard hit by the steel and aluminum levies, said it will still impose tariffs on $20 billion worth of U.S. imports, including metals, computers, and sporting goods, while the European Union said it would be taxing $28 billion of American goods, including bourbon, boats, and motorcycles.

Trump’s reply: “Of course I will respond.”

Up first: A potential 200% tariff on European wines and spirits. More tariffs could come April 2, when Trump has promised a round of tariffs on cars and on countries he says “discriminate” against the U.S.

China’s already slapped back with 15% tariffs on chicken, wheat and corn, and 10% duties on soybeans, pork, beef and fruit. Imports still at sea are exempt, but farmers across the U.S. are concerned that they are losing markets and field hands just as the Spring planting season begins.

In a paragraph of nonsequiturs that rocked a meeting Tuesday of the Business Roundtable, whose board includes the CEOs of Cisco, Apple, and JPMorganChase, Trump repeated his contention that tariffs will lead to the swift construction of U.S.-based factories by companies that now ship goods tariff-free to the US. “They don’t want to pay 25 percent or whatever it may be,” Trump said of U.S. importers. “It may go up higher. Look, the higher it goes, the more likely it is they’re going to build.”

The problem is that America’s business bosses can’t just lock Trump in the attic. He is the president, so they have to find a way to live with the uncertainty. For now, they are just issuing warnings. On Monday, The New York Times reported, Goldman Sachs slashed its 2025 economic growth forecasts for the United States to 1.7 percent from 2.4 percent, citing adverse trade policy. “This may be the calm C.P.I. report before the storm,” said Seema Shah, chief global strategist at Principal Asset Management, referring to the inflation data. But with tariff policies, the inflation picture could get “uglier as the months go on.”

We ask @POTUS to secure a spirits/hospitality agreement with the EU to get us back to zero-for-zero tariffs and create U.S. jobs, increasing manufacturing and exports for the American hospitality sector. We need #toastsnottariffs! pic.twitter.com/3t69CYRbRo

— Chris R. Swonger (@ChrisRSwonger) March 13, 2025

Note: There is no U.S. Champagne business. Champagne is a protected trademark that can only be used on sparkling wines made following a strictly prescribed method in the Champagne region of France.

The Usual Suspects

• Checking in on Starbucks: It’s been six months since CEO Brian Niccol, started his weekly $250,000-a-year commute from his home in Long Beach, California, to Starbucks’ Seattle HQ, and on Wednesday Niccol took his first bow in front of shareholders. “There will be ups and downs but we are focused on our back-to-Starbucks plan,” he said. Among the changes: 13 drinks, including White Hot Chocolate, dropped from the menu, with a goal of slimming it by 30% this fall; delivering drinks in less than four minutes; changing top execs; slashing 1,100 jobs at HQ. So far the changes have been welcomed. Despite a continuing slide in same-store sales, the share price is up 28% and the big man is happy: “He has my respect and complete support,” founder and chair emeritus Howard Schultz told The Wall Street Journal.
• Can Intel recover in time? Intel named a new CEO this week, 65-year-old tech exec Lip-Bu Tan, to try to lead the chipmaker back to grace. Laptops and desktops used to come with a proud “Intel inside” stickers, but Intel has slipped behind, failing to develop chips for smartphones and AI. Intel won $8.5 billion from President Biden’s CHIPS Act, aiming to restore U.S. dominance in chipmaking, but Intel’s poor performance has spooked investors and the government. One idea Intel considered was having rival Taiwan Semiconductor Manufacturing take over production. But now Trump says he may abolish the Act—he called it a “horrible, horrible thing”—along with its $280 billion of loans, grants and guarantees. Still, the market seemed to think Tan is the right medicine: After falling nearly 50% in the past year, shares in Intel were up 11%.
• Boeing gets more turbulence: Trump’s tariffs could make U.S. airplane maker Boeing one of the biggest victims of the Trump tariffs. Imported parts, a U.S. slowdown triggered by a potential recession caused by the tariffs, and retaliatory tariffs around the world would raise the cost and shrink the markets for Boeing’s airplanes, say analysts, just as the company was recovering from a years-long drop in sales and share price. Aengus Kelly, the CEO of aircraft leasing firm AerCap, told CNBC that the price of a Boeing 787 jetliner could jump by $40 million. The standard 242-seat 787 sells for $120 million to $150 million, according to trade publication EM Airplane. “No one’s going to want to pay that,” Kelly said. They’ll just buy or lease an Airbus instead. Shares of Boeing have dropped about 10% since Trump took office.
• Walmart tariff woes: Executives at Walmart, the world’s largest retailer, thought they’d be able to avoid raising prices on some good by asking Chinese manufacturers to lower their prices. But when the Chinese government got word, it summoned top Walmart execs in China to a meeting in Beijing telling them that making Chinese suppliers pay the costs of tariffs would be irresponsible and unfair. Then came the iron fist inside that velvet glove: Trying to change payment terms could have legal consquequences, Walmart execs were told, according to The Wall Street Journal: “If Walmart insists” on making Chinese suppliers absorb the blow, “then what awaits Walmart is not just talk,” state broadcaster China Central Television said on social media Wednesday. Oof. China needs Walmart’s business to keep its factories running, and Walmart needs China’s goods to keep its bargain-hunting customers coming.
• Target tries to take a bite: As inflation and tariffs cut into consumer grocery budgets in the U.S., Target is looking to grab a bigger share of U.S. grocery dollars. The company is adding two more grocery logistics hubs to make it easier to get fresh food to its stores. But Walmart says it has 10 refrigerated hubs in place or under construction around the U.S., so it may take a while to catch up.
• Gilligan’s Space Station: After Boeing’s Starliner malfunctioned and left NASA astronauts Sunita Williams and Butch Wilmore marooned on the International Space Station, their planned eight-day tour has stretched to nine months, and now a defect in Elon Musk’s Space X rocket that’s supposed to bring them home has the two extending their stay a bit longer. Less than an hour before liftoff on Wednesday, NASA and SpaceX called off the launch over an issue with a clamp that holds down the rocket before liftoff. SpaceX could try again in the coming days; however, it wasn’t immediately clear when the attempt would be.
• FeesXSW: Southwest Airlines, the discount carrier that wants to be one of the big boys, took another step to drive away discount flyers this week, saying it will end its “Bags Fly Free” program (a registered trademark!) as it seeks to humor investors who want more profits. Last month, Southwest said it would lay off 15% of its workforce to boost profits, and last year it abandoned its no-assigned-seats policy. But the move could cost Southwest what remaining passenger loyalty it has, making it indistinguishable from rival carriers. Last year, CEO Bob Jordan said the airline was keeping free checked bags, and an investor presentation estimated that getting rid of the bag policy would cost Southwest about $1.8 billion a year in lost market share, while bringing in “at most $1B to $1.5B” per year in potential bag fee revenue.
• Grounded: Meanwhile, major airlines cut their earnings forecasts this week, saying they expected that economic uncertainty and higher prices will reduce the amount of flying Americans do this year, and flyers are spooked by the recent series of crashes. “We just went through a little bit of a parade of horribles,” Delta CEO Ed Bastian said at a conference on Tuesday. “The key question is whether the demand weakness is transitory,” said Andrew Didora, an analyst at the Bank of America.

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Elon’s World

• The DOGE chainsaw’s effort to whittle down the IRS has at least one group of people happy, reports The Washington Post: large corporations and high-net-worth individuals with access to lawyers and accounts who know how to hide the wealth. The Post says some 5,000 of the 7,000 IRS workers laid off by Trump buddy Elon Musk are in the enforcement and collections divisions. Another group of fans: Drug cartels and mafia families. The Post says tax investigators working on drugs and crime syndicates could be shifted to aid the expulsion of undocumented immigrants by the Department of Homeland Security.
• That bump Tesla stock got when Donald Trump was elected turns out to be a pothole. And a pretty big one at that. Tesla shares jumped 90% from Election Day until mid-December, but since Christmas, they’ve lost half their value, falling 44% since Trump’s inauguration. What’s the problem? Nothing new. Literally. No new car models in nearly three years (an update to the Model Y is promised later this year), plummeting sales in Europe (down nearly half) and China, and a quickening slide in the U.S. New registrations for Teslas dropped 11% in January even as Ford and Chrysler saw their EV sales rise. Donald Trump’s turn as a car salesman, plumping for Tesla on Tuesday in a jarring live commercial on the White House’s South Lawn, didn’t seem to help, even as the president told TV viewers they could buy a Tesla for as little as $299 a month. “I wanna make it a good deal here,” Trump said, holding a price list in one hand. Trump said he’d be buying a Tesla from Musk to help out his buddy, but there’s not much that can help at this point: First-quarter “deliveries [are] tracking for a sizable miss,” Guggenheim analyst Ronald Jewsikow wrote in a Tuesday report.
• Some anti-Musk folk are doing more than simply not buying. Shots were fired at a Tesla dealership in Oregon, protestors surrounded a Tesla dealership in New York City, and in France protestors torched a batch of Tesla cars. In Berlin, fires broke out at the site of a planned Tesla factory  Outside Boston, a series of Tesla charging stations were burned at a shopping mall, and in Colorado, a woman was arrested for spraying “Nazi” on the wall of a Tesla dealership.
• The biggest thing Trump can do for Musk may be tariffs. As Detroit carmakers use more aluminum to make their vehicles lighter and thus more fuel efficient, aluminium tariffs are expected to add $400 to the cost of making the average car, according to the Wall Street Journal. Making things more expensive for his competitors could allow Musk to make up some lost ground.

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The Short Stack

• Amazon says it will stream several seasons of “The Apprentice.” “I look forward to watching this show myself—such great memories, and so much fun, but most importantly, it was a learning experience for all of us!” Trump said in a statement released by Amazon. Bezos has been notably cozying up to Trump. In January, Amazon said it will release a documentary about Melania Trump. That follows Bezos’ barring The Washington Post, which he also owns, from running an endorsement for Kamala Harris in November, and then declaring that the Post’s editorial pages would drop their centrist politics and empahasize “personal liberties and free markets.”
• Egg prices keep rising. They jumped 10% in February to an average of nearly $5.90 a dozen nationwide; that’s below the 15% hike in January, but eggs are still 60% more expensive over the past 12 months, and that’s if you can find them. That’s helped push food prices up 2.8% over the same period last year. In 2024, more than than 40 million egg-laying hens were killed or died from the avian flu virus, and another 31 million were killed in the first two months of 2025. Meanwhile, the Justice Department says it’s investigating price-fixing in the egg industry, and Congress is threatening hearings as soon as the GOP members return from their winter break.

@data.dynamix

About to get me a pet chicken 🐓 #eggs #inflation #eggflation

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