The wheels come off

Global stocks have run into a ditch on Thursday.

The sell-off comes as President Trump doubled down on his threat to roll out 25 percent tariffs on auto imports beginning next week — and duties on auto parts shortly afterward — potentially upending an industry built on a complex global supply chain, reigniting inflation and inflaming trade war tensions.

Hopes that negotiators can work out a deal are dimming. Trump said the tariffs were permanent. He also sees them as a revenue stream: The White House calculates that it could raise $100 billion annually. The tariff threat, however, has zapped more than that from the largest carmakers’ market capitalization in recent weeks.

Tariff gloom already snapped the S&P 500’s three-day winning streak on Wednesday. And a reminder: Reciprocal tariffs are still set for April 2.

Here’s the latest:

• Shares in European automakers were down sharply on Thursday. Mercedes and Porsche alone could see tariffs wipe out a combined $3.7 billion in operating profits, Bloomberg calculates.

• General Motors is down more than 6 percent in premarket trading.

• Tesla is seen as less affected by the measures, but Elon Musk warned on X that “Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.” (Like its rivals, it depends a lot on imported parts.)

Consumers appear set to face the brunt of tariffs. Automakers could see costs rise by $6,700 per vehicle sold, Daniel Roeska, an analyst at Bernstein, wrote in a research note on Thursday.

The big question: How much of that will the companies absorb, and how much will they add to the sticker price? Either way, the levies are likely to dent their profits and force consumers to pay more.

Households were already bracing for pain from Trump’s trade moves. The prospect of higher car prices comes as consumer sentiment has plummeted, reigniting concerns about an economic downturn.

How will trade partners respond? Japan, which lobbied Trump hard with promises to invest big in the United States, called the tariffs “extremely regrettable.” It is petitioning for an exception, noting that its automakers are big employers in the United States. South Korea has been quieter, though this week, Hyundai announced a $21 billion investment in the country in a bid for tariff relief.

Trump seems worried that others could fire back. In a Truth Social post, he warned Canada and the European Union that if there was any joint retaliation, “large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!”

HERE’S WHAT’S HAPPENING

The United States could run out of money by late May. The new forecast from the Congressional Budget Office puts more pressure on Congress to address the debt limit, though the nonpartisan agency said that if borrowing needs remain within projections, the so-called X-date could happen as late as September. A fight to avert a government shutdown could rock markets right as President Trump is planning to push through more tax cuts.

Trump pushes back against the Signal leak. Criticism of the administration grew on Wednesday after The Atlantic published more messages from the group chat, including specific details — like exact launch times — of U.S. airstrikes against Houthi targets disclosed by Defense Secretary Pete Hegseth. But Trump played down concerns over the leak, calling them a “witch hunt.”

Prosecutors are said to look into a claim about Pfizer’s Covid-19 vaccine. Officials at the U.S. attorney’s office in Manhattan have begun interviews over whether a former Pfizer scientist who joined GSK, a rival, told his new colleagues that Pfizer had delayed announcing the success of its Covid shot until after the 2020 election, according to The Wall Street Journal. (GSK raised the matter with prosecutors, The Journal reported, while the scientist disputes that account.) The claim is politically volatile: Trump has long been angry about the timing of Pfizer’s news.

A federal appeals court upholds an order barring federal funding freezes. The decision leaves in place a lower court’s ruling blocking the Office of Management and Budget from choking off funds to states that Congress had appropriated, as state attorneys general push back against the Trump administration’s efforts to unilaterally cut spending. Separately, the administration asked the Supreme Court to let it cancel $65 million in teacher-training grants that it said would be used to promote diversity, equity and inclusion initiatives.

The stakes of an unwelcome visit

As a U.S. delegation prepares to land in Greenland, President Trump is doubling down on his threats to acquire the territory. He told a conservative talk show host on Wednesday that the mission of the trip — which now includes Vice President JD Vance — would be “to let them know that we need Greenland for international safety and security.”

Trade routes are a focus. Most of Greenland is in the Arctic Circle, where melting ice is opening new shipping channels. According to the U.S. Naval Institute, routes between Asia and Europe, or Asia and the United States, are up to 40 percent shorter through the Arctic than through either the Suez or Panama Canals. Russia and China are already cooperating on Arctic shipping routes.

Greenland also has lots of rare earth minerals, which are used in technology production and dominated by China, which has restricted the export of certain minerals to the United States.

Trump has signaled keen interest in getting access to such resources: Last week he signed an executive order that aims to increase domestic critical mineral production, and Ukraine’s critical mineral stores have been a focus of Washington’s negotiations with President Volodymyr Zelensky of Ukraine.

The visit may not help Trump. For one, the timing is bad. The territory is still in the process of forming a coalition government, after holding an election in which several candidates rebuffed the prospect of a U.S. takeover. Greenland’s prime minister called the trip “highly aggressive,” while activists planned to protest the arrival of the delegation.

“This offensive pushes Greenland further away from the U.S., even though a year ago, all parties in Greenland were looking forward to more business with the Americans,” Lars Trier Mogensen, a political analyst based in Copenhagen, told The Times.

The trip has since been scaled back. After the vice president was added to the delegation, which already included his wife, Usha Vance, and Mike Waltz, the national security adviser, the itinerary refocused on touring an American military base — nearly 1,000 miles north of the territory’s capital, Nuuk. (It’s unclear whether Waltz will still join.)

But winning hearts and minds may not be the goal. Greenland’s recent election may present an opportunity for Trump: Two winning parties both favor independence from Denmark, which could open a door to partnership with Washington. (That said, the overall winner has been critical of Trump’s messaging.)

Trump, however, has not veered from his goal of owning the island outright. “I think that we have to do it,” he told the talk show host, Vince Coglianese.

The Justice Department’s new task force

As the Trump administration rolls back regulations across key government agencies, the Justice Department on Thursday is set to introduce a task force intended to turbocharge its red-tape-cutting efforts, DealBook is first to report.

The Anticompetitive Regulations Task Force, as it’s called, “will stand against harmful barriers to competition whether imposed by public regulators or private monopolists,” Gail Slater, assistant attorney general of the Justice Department’s antitrust division, said in a statement.

Its purpose is broadly defined. It aims to identify and curtail regulations that “undermine free market competition and harm consumers, workers and businesses,” according to the department. It will seek public input about which regulations are deemed too onerous across vast portions of the economy, including housing, food, energy and health care.

It’s in response to Trump’s efforts to trim the bureaucratic state through executive orders. The first, in January, declared that federal agencies should “alleviate unnecessary regulatory burdens placed on the American people.”

The second, in February, told agencies to identify regulations that imposed “significant costs upon private parties” or “undue burdens on small business and impede private enterprise and entrepreneurship.”

It has echoes of Vice President JD Vance. Slater worked for him as an economic adviser. In a speech in Paris in February, Vance made waves by detouring from the conference’s focus on artificial intelligence safety to warn of the risks he sees from an “overly precautionary regulatory regime.”

What does this say about Slater’s approach to deals? Slater distinguishes between the administration’s approach to antitrust, which is tougher than many had anticipated, and its approach to regulation, which remains heavily deregulatory.

“Antitrust enforcement is a scalpel,” Slater said in her confirmation hearing, “and regulation is often a sledgehammer.”

The other side of the gold rally

Gold futures are trading at another record on Thursday — above $3,080 an ounce in New York — as jittery investors seek out a safer bet amid President Trump’s escalating trade war threats.

Market watchers think that the rally has only just begun, a surge that could factor into central bank policy decisions worldwide, a new Bank of America report details.

Gold’s gains follow a big price upgrade. The metal is forecast to jump more than 10 percent over the next year, to $3,350 per ounce, Michael Widmer, a commodity strategist at Bank of America, wrote in a research note on Wednesday. The bank also offered a best-case scenario: gold eventually hitting $3,500 per ounce.

Where could that demand come from? Widmer sees Chinese insurers — Beijing recently freed up the country’s insurance companies to invest 1 percent of their assets in gold — and retail investors as two groups to watch. Gold-backed exchange traded funds are booming, far outperforming the S&P 500 this year.

There’s another potential whale in the gold trade. Central banks, Widmer said, “currently hold about 10 percent of their reserves in gold, and could raise this figure to +30 percent to make their portfolios more efficient.”

Non-U.S. central banks and governments tend to hold a lot of dollars in their reserves, underscoring the greenback as the world’s reserve currency, a standing that has been in decline in recent years. As relations with the Trump administration grow icier, some countries are reportedly beginning to explore a dollar-policy Plan B, especially in the event of another financial crisis, Reuters reports.

Such a geopolitical shift would play into the gold rally. “Uncertainty around Trump administration trade policies could continue to push the USD lower,” Widmer wrote, referring to the dollar, “further supporting gold prices near-term.”

THE SPEED READ

Deals

Politics, policy and regulation

• Former Treasury Secretary Janet Yellen is said to be joining an advisory board for Pimco, the global investment giant. (CNBC)

• The Supreme Court upheld the Biden administration’s limits on access to kits for building so-called ghost guns, or homemade, nearly untraceable firearms. (NYT)

Best of the rest

• “She Inspired Laws to Hold the Fossil Fuel Industry Accountable. Now She’s a Target.” (NYT)

• Signal isn’t the only app on which Mike Waltz, the national security adviser, may have revealed too much: He appeared to have left his Venmo friend list public, too. (Wired)

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