Tariffs, taxes … and musk
In a week when Vice President Kamala Harris began to lay out some of her economic policies, Thursday was Donald Trump’s turn to lay out his fiscal agenda. It comes as fears of a recession continue Friday’s employment report.
At the heart of the proposals, which he outlined at the Economic Club of New York, were higher tariffs, lower taxes and More Elon Musk. Most of these people cover familiar ground and raise as many questions as they want to answer about how they would govern if re-elected. Still, his comments could be a prelude to what he will be grilled on in next week’s debate with Harris.
Trump tried to draw a sharp contrast with Harris over who would be better for the economy. “I call it America First. This is the policy that built this country, and it is the policy that will save our country. he said The audience included JPMorgan Chase’s Jamie Dimon, Blackstone’s Steve Schwarzman and hedge fund mogul John Paulson.
Trump wants to cut taxes on companies and repeal President Biden’s De-Inflation Act, a law. Popular with many business heads. He has also tried to label Harris as a left-wing extremist.
Harris is trying to keep both Progressives and their corporate backers are on the sidelines. For instance, she has signaled that she would largely keep Biden’s signature industrial policies but has scaled back proposed increases in capital gains taxes.
Whoever wins in November will most likely inherit a sluggish economy. But experts warn that Trump’s policies could push the US into a trade war that will Increase inflation And weakens the economy. Economists at Goldman Sachs said this week that Harris would have the presidency Better for growth Trump would be 2.0.
Here are other takeaways from Trump’s speech:
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He wants to create a commission to oversee federal spending to save “trillions,” an idea first floated by Musk. Even Trump wants a tech mogul to run itBut that could create potential conflicts of interest: SpaceX, Musk’s rocket company, is a major government contractor.
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It will reduce the corporate tax rate from 21 percent to 15 percent. The catch: For supercharged manufacturing, the break would only be extended to companies that make their products in the U.S. and keep jobs onshore. But in the world of global supply chains, Who would be eligible?
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Trump painted the tariffs as a panacea for America’s economic woes. He has long threatened to impose large levies to appeal to working-class voters who fear their jobs going overseas. But Trump now insists that tariffs can also be revenue generators that will help families in some way. Increasing child-care costs. He also paid tribute to the “highly underrated president, William McKinley,” the 19th-century champion of tariffs.Until he wasn’t).
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Trump also promised to lower interest rates. It also doesn’t come with an explanation, because monetary policy is the job of the Fed. But Trump has threatened Break down the long-held principle of central bank independenceSay it more “say.” (In 2019, the last time he spoke at the prestigious club, he Also vented (Part of a long-running feud with the central bank and its chairman, Jay Powell, about the Fed’s interest rate policy.)
Here’s what’s happening
7-Eleven’s owner rejects major foreign takeover bid Seven & I HoldingsThe convenience store chain’s Japanese parent company said the $38 billion offer by Canada’s Alimentary Couch-Tard was too low and could draw opposition from antitrust regulators. (That said, it The door is not completely closed for sale, which would be the largest overseas takeover of a Japanese company.) Seven and I will likely face pressure to come up with a more attractive stand-alone plan.
Saudi Arabia and other oil producers extend production cuts. Empire and seven other members of the OPEC Plus cartel Unexpectedly delayed plansAt least until December, to start ramping up production. The move comes in response to a drop in oil prices due to weak global demand and increased supply from non-OPEC producers. The price of Brent crude, the international benchmark, rose slightly on the news, but remained well below its 2024 peak.
The Transportation Department opens an investigation into frequent-flyer programs. The department is investigating whether offers from the four largest US airlines – United, Delta, American and Southwest – have been received. Damage to customers Through methods including depreciation of rewards, additional fees and dynamic pricing. Across the Atlantic, Britain’s Competition and Markets Authority is investigating whether Ticketmaster Adequately disclosed its use of dynamic pricing Tickets on sale for the Oasis reunion tour.
The power behind the Paramount Throne
Larry Ellison made his name, and fortune, co-founding and leading the tech giant Oracle. But the 80-year-old is adding another title, thanks to his son’s deal-making: Paramount’s controlling shareholderreplacing Shari Redstone in the role.
The elder Ellison’s involvement in financing the $8 billion takeover of Paramount by David Ellison’s Skydance has long been public. But the role he played in the new company’s hierarchy has only just come to light, raising big questions about who is really in the driver’s seat at the media behemoth.
What we know now. A Skydance-led group is buying the majority controlling interest in Paramount currently held by Redstone. A filing with the FCC seeking to transfer control of Paramount’s TV station breaks down the company’s new ownership:
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Pinnacle Media, the Ellison family investment vehicle, will own 77.5 percent of National Amusements, which owns Redstone’s controlling stake.
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An entity affiliated with Redbird Capital Partners, the investment firm backing Skydance, will control the remaining 22.5 percent.
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Lawrence J. Sayonara, a media company controlled by an Ellison revocable trust, will gain control of Paramount’s licensed television broadcast stations. Larry Ellison is listed as the controlling shareholder of that trust.
Who is in charge? Skydance has said that David Ellison, who is set to become Paramount’s CEO, will have operational control of Paramount after the deal closes. But the news raises questions about how much it will affect his father.
“Maybe Larry Ellison will give David free rein,” Boston College Law School professor Brian Quinn told DealBook. “Maybe, Larry will call all the shots, or maybe just the big shots.”
DealBook has another big question: What happens to Larry Ellison’s controlling stake when he dies?
Larry Ellison may face further scrutiny. The tech mogul has long been an influential figure in tech and finance circles. A prolific Republican donor, he hosted a fundraiser for Donald Trump in 2020, but recently Rival candidates endorsed in GOP presidential primary.
Intel’s Unclear Future
What will happen to Intel? The Biden administration made a big bet on the storied chip maker, seeing it as key to reviving the domestic semiconductor industry.
But a run of horrendous earnings and setbacks has raised questions about Intel’s future Judging board meeting next week To figure out how to reverse the decline closely watched in Silicon Valley and Washington.
Qualcomm is said to be looking to buy pieces of its rival. The chip maker has seen the potential To acquire parts of Intel’s design businessReuters reported. Of particular interest is the PC Client unit, which makes laptop and desktop computer chips.
Intel is weighing drastic changes. The company said it would cut 15,000 jobs, cancel its dividend and cut capital spending after reporting disastrous second-quarter results. Intel can do it too Trim its stake in MobileyeAn autonomous driving tech company, OR Sell businesses like AlteraIts programmable chip unit.
AI is a big reason why Intel lags behind its peers. Intel CEO Pat Gelsinger is three years into a five-year turnaround plan. But the board told him last year Accelerate the company’s AI efforts Or the company could miss the boat, reports the Financial Times. So talks to SoftBank Produce an AI chip to take on Nvidia fail
Investors have chastised Intel, wiping about $70 billion off its value over the past year during an AI boom that added about $1.4 trillion to Nvidia’s market value.
Will Intel split? The company is mulling various options, including spinning off its product-design and manufacturing businesses or selling its foundry division. Investors cheered the news, sending shares down nearly 10 percent afterward Bloomberg reported Possible plans.
Ben ThompsonThe author of the influential tech newsletter StraightCherry, says a split is the only solution, an idea he pushed when Gelsinger became CEO in 2021. Whatever happens, the prospect of Intel leading an American chip-making renaissance is dubious. “The world of tech has moved beyond Intel; This is the only opportunity for US leading edge manufacturing to do the same,” he wrote in a note this week.
Which venture capitalists are thinking small
The world of venture capital is dominated by mega-firms that have raised billions of dollars from scores of different funds. That has led to a tsunami of cash for start-ups, often forcing them to grow quickly to justify those investments.
Such an incident has also happened Disastrous resultsSome encourage investors to push back. Among them is Nick Chirles of Asylum Ventures, which oversees a $55 million fund dedicated to small tech companies. He Explained his approach To Erin Griffith of The Times:
Most venture capital funds raise money from outside investors and deploy it to dozens of start-ups over two to three years. Start-ups then raise numerous rounds of funding with the aim of selling or going public and seeking returns for investors.
But Asylum plans to make only four or five investments a year in the long term, Mr. Chirls said. It will also focus on supporting start-ups that need only a small amount of money – as little as $500,000 – to get going.
“It’s rare,” Mr. Chirls said. “Not hundreds of them.”
He said he was inspired by A24, an independent movie company known for hits like “Everything Everywhere All at Once,” which promotes small, unusual projects that big Hollywood studios won’t touch.
That said, many venture capital firms are still eager to shower large sums of money on start-ups, especially if they focus on Artificial intelligence. But other investors applaud the think-small approach. “We’re still a small minority,” Bryce Roberts, who runs Indie.vc, told the Times. “My hope is that it begins to validate this approach.”
The Speed Read
Deals
Elections, Politics and Policy
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Federal judge pro tempore Another aspect blocked President Biden’s student debt relief plan, along with seven Republican state officials who oppose it. (NYT)
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Confiscation of phones from federal agents Some of New York City’s top officialsIncluding the police commissioner, further destabilizing the administration of Mayor Eric Adams. (NYT)
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