Business

1. Liberation Daze
2. Tariffs undercut friendshoring
3. ‘Elon, Who?’
4. BigLaw splits
5. The Art of the Deel

“Oh sh*t,” Restoration Hardware CEO Gary Friedman said on an earnings call yesterday evening, upon learning that his shares were down 30% after the White House made its Liberation Day splash. “I just looked at the screen.” That fairly captured the feeling in the business world, which was shocked by the arrival of tariffs that President Donald Trump has talked nonstop about for more than a year.

Flashback to January, when executives were bankrolling inauguration parades, literally hugging flags, and shouting into the nearest microphone what a bright moment it was for America. It wasn’t just their MAGA conversion that struck me, but how unshackled they felt expressing it. “It’s fascinating,” I wrote at the time, “to watch everyone say the quiet part out loud.”

Fast-forward three months and it’s now the loud part, whispered despondently. This is not going well, murmur CEOs with thousand-yard stares, as if what’s happening now was some sort of edge case that couldn’t have been predicted.

Steep tariffs on China were to be expected, and smart companies have been rerouting their supply chains for years now. But their solutions — Vietnam, India, and Mexico, among them — are now equally bad. The only safe haven, by White House design, is the US.

More troubling for business leaders is that the basic barter system that has driven the Trump administration’s policies so far seems to have broken down. Israel preemptively canceled all its tariffs on US goods earlier this week, hoping to be spared. It wasn’t. India Prime Minister Narendra Modi’s cozy relationship with Trump — remember the “Howdy, Modi!” rally? — had no effect.

The lesson from Trump’s first 73 days was that everything can be bought. Paul Weiss’ price for peace was $40 million. Skadden’s was $100 million. (Heck of a Series B round.) ABC News’ was $15 million.

But that naked commercialism may be cracking, too. If Chevron’s adopting Trump’s “Gulf of America” language earned any favor, it hasn’t been quickly returned in the company’s Venezuelan drilling concession mess. Pfizer’s decision to patronize Mar-a-Lago, and its CEO’s Biden-bashing, haven’t dented Trump’s enthusiasm for gutting health care research or reopening vaccine probes. Meta is hoping that Mark Zuckerberg’s political conversion and his $1 million personal check to Trump’s inauguration will buy it a way out of antitrust trouble. They may all be disappointed.

Trump tariffs spark vows of retaliation

Allies and adversaries came out swinging at Trump’s tariffs, which put new levies on imports from 60 countries.

German Vice-chancellor Robert Habeck compared them to Russia’s war in Ukraine. A spokeswoman for the French government said the EU might impose a tax on US tech companies’ digital services, similar to the British rule that has drawn Trump’s ire, and Macron told French companies to pause investments in the US. China’s Politburo described the behavior as “typical bullying” from Trump. “We are in shock,” an Israeli official told The Jerusalem Post. Israel had cancelled all its tariffs on US goods, hoping to be spared, “but it didn’t happen.”

This is a “major blow to the world economy,” EU President Ursula von der Leyen said. The OECD projected last month that 10% tariffs — well below the final numbers — would lower US economic growth by 0.7 percentage points within three years and drag down other countries’ GDPs, too.

Economics writer James Surowiecki noticed the apparently simplistic math behind the new tariff levels, and the White House’s attempts to show its work swayed few. “This is like every dumb*ss academic paper where they make some incredibly stupid claim but cover it up by using Greek symbols,” statistician Nate Silver wrote on X.

The tariffs have wiped $2 trillion off US stocks and pushed the S&P 500 into correction territory, down 11% from February highs. Steve Bannon’s take: “It’s an orderly selloff of people who are changing their portfolio around companies that have taken advantage of the United States.”

— Rohan Goswami

Tariffs are rug-pull for rerouted supply chains

The tariffs are doubly stinging for companies that shifted operations to other Asian countries after the pandemic. Vietnam and India, which will now face tariffs of 46% and 26%, respectively, were big beneficiaries of a post-Covid scramble by companies to ease their reliance on China. These “connector” economies were key to Western companies’ “China+1” strategies.

Consider what an executive at Japanese manufacturer SMC said just two months ago: “We are moving our global supply base from China to Vietnam. The US response may change a little, but I believe that tariffs will be lower in Vietnam than in China, so I do not think we are going in the wrong direction.” (They are, but barely.)

Shoe companies, which rely on factories across Southeast Asia, were hit especially hard: Nike shares were down 12%, On Running 14%, and Skechers 17% this morning.

Apple, which made a concerted push over the last few years to rotate its supply chain out of China, lost $275 billion of market value. Tim Cook’s pivot to India looked smart until now. Still, its large profit margins — more than 40% on phones and other hardware in the first quarter — can absorb higher costs. And as the lobbying for fine-print exceptions heats up, Cook’s warm relationship with Trump could help: Apple was one of just a handful of companies to get tariff waivers in 2018.

‘Elon, who?’ says Delaware gov., as companies follow Musk out

Delaware’s corporate exodus isn’t over yet. Roblox said Wednesday night that it plans to move its legal home to Nevada, as frustrations with the state’s corporate environment, amplified by Elon Musk, continue to build.

“Elon, who?” Delaware Gov. Matt Meyer said in an interview yesterday, before Roblox’s filing. Tesla reincorporated last year in Texas after a Delaware judge nixed his giant pay package, and the billionaire has stoked others to leave for friendlier political climes.

Meyer signed sweeping changes to Delaware law last week aimed at giving controlling shareholders more sway over their companies. But Roblox’s departure — counseled by one of the same law firms, Wilson Sonsini, that had a heavy hand in writing the new law — suggests the exodus isn’t finished. Semafor reported last month that Walmart and other blue-chip firms, well outside of Silicon Valley’s tech-bro social circle, had considered leaving, too.

“Delaware sold its reputation for nothing,” said Joel Fleming, a partner at Equity Litigation Group who represents shareholders in corporate disputes. The plaintiffs’ bar says the new law gives too much power to controlling shareholders at the expense of minority investors.

Uber CEO Dara Khosrowshahi will join top global leaders at Semafor’s 2025 World Economy Summit in Washington DC on April 23-25. As the first major gathering since the new US administration took office, the summit will feature on-the-record discussions with 100+ CEOs, exploring the forces shaping the global economy and geopolitics.

April 23-25 | Washington, DC | See the full lineup of speakers

BigLaw splits along old lines

Law firms’ responses to finding themselves in Trump’s crosshairs are splitting along commercial lines: Litigators are litigating, and dealmakers are cutting deals. DC-heavy firms known for their courtroom and lobbying chops, like WilmerHale and Perkins Coie, have sued to challenge White House executive orders stripping their security clearances and barring their lawyers from government buildings. New York firms that generate their profits from corporate mergers and private-equity money, like Paul Weiss, Skadden Arps, and (more of a mixed bag) Willkie Farr, are negotiating truces.

There has been little public backlash for the settlers and little public support for the fighters. An effort headed by the Los Angeles firm Munger Tolles to organize an industry-wide brief backing Perkins Coie has received few signatures from top firms, people involved in the process said.

Deel’s $6,000-a-month corporate spy talks

Workplace software company Rippling stunned the corporate world when it accused a rival, Deel, of planting a spy in its ranks. The alleged mole earlier this week made a sworn confession, saying he was approached by top Deel executives to be their inside man at Rippling, whose software is used by corporate HR departments.

Keith O’Brien said in his sworn affidavit that he was paid just $6,000 a month — mostly in cryptocurrency — and that Deel’s CEO told him he would be like “James Bond.” When caught in a trap laid by Rippling executives, O’Brien said Deel offered to send him to Dubai and cover his legal costs.

Deel is valued at $12 billion and is backed by Mubadala, Laurene Powell Jobs’ Emerson Collective, and Uber CEO Dara Khosrowshahi, according to PitchBook.

— Rohan Goswami

➚ BUY: Nothing.

➘ SELL: Everything. Global stocks, bonds, and commodity markets are all falling today. The US 10-year Treasury yield slipped under 4% for the first time since Trump won, and even traditional safe harbors like gold have given back previous gains.

With so many financial newsletters competing for attention, it’s hard to find one that makes sense of the market. That’s why more than 1 million savvy readers trust The Daily Upside for their daily dose of finance, economics, and investing insights. Created by Wall Street insiders, each issue delivers clear, actionable analysis — straight to your inbox. Subscribe for free today.

Companies

• A new DeepMinder: Google replaced the head of its AI apps, Semafor’s Reed Albergotti scooped. Sissie Hsiao, who oversaw the chatbot beginnings of what’s now the Gemini suite of AI-generating tools, will be replaced by the executive who ran Google’s popular text-to-podcast product, NotebookLM. The change comes a few days after reports that the company delayed the release of internal research in an effort to put a moat around its most cutting-edge tech — signaling the coming fight over open-vs. closed-source treatments for AI models.
• Rack it up: Google is also in talks with CoreWeave to buy more AI processing power, the Information reports. CEO Michael Intrator has said the company is trying, and failing, to keep up with customer demand. Its shares have rebounded from last week’s disastrous IPO, up 30% from its deeply discounted listing price.

Make Business Great Again

• DOGE cuts hit the tape: US layoffs in March were three times higher than a year ago, according to Challenger, Gray & Christmas, which attributed 79% of the month’s 275,000 firings to Musk’s chains. It was the highest monthly total ever, excluding the pandemic.
• Zuck It: Meta chief Mark Zuckerberg has been personally lobbying the president and top officials to stave off an upcoming antitrust trial, The Wall Street Journal reported.

Watchdogs

• No tax on bps: Investment firms are racing to blunt an effort by Britain’s cash-strapped government to increase taxes on their profits. The industry could be facing a two-front war over its cash cow: Trump, too, has suggested ending special exemptions for “carried interest,” which would strike at the heart of the venture and buyout community, home to some of his strongest supporters. (When Obama tried to get rid of carried-interest treatment, Blackstone’s CEO compared the effort to the Nazis’ invasion of Poland.)
• Byte the bullet: TikTok is facing a €500 million fine from Irish authorities, Bloomberg reported, for illegally shipping EU user data back to China. Information leakage from the app’s global operations to its Chinese parent are at the crux of ongoing talks involving the Trump administration, existing TikTok investors, and its would-be savior, Oracle.

Sweeping global tariffs announced by President Trump this week will significantly raise the costs of renewable energy, making it harder for US Big Tech companies to meet their data center energy needs, Semafor’s Tim McDonnell writes.

Higher costs will be passed on to energy consumers at a moment when, as NextEra Energy CEO John Ketchum recently told Semafor, renewables are still the cheapest and most readily available solution to the looming US power deficit. Tariffs on critical minerals, steel, aluminum, and components for power transformers will also make energy projects of all kinds more expensive.