Why Investors Appear Unfazed by the Latest Trump Tariffs

DealBook|Why Investors Appear Unfazed by the Latest Trump Tariffs

Elon Musk’s growing power in government appears to be making some of his businesses more of a magnet for investors. Case in point: Banks have managed to sell off most of the $12.5 billion worth of debt owed by X, his social network, to eager buyers. Investors are essentially betting that the company’s future is brighter because of his role at the heart of government.

It’s a different situation from what worries many Musk skeptics — that he will use his vast influence to directly benefit companies like SpaceX. It’s also worth flagging that the scrutiny on Musk may have ended up costing Tesla that potential State Department contract we wrote about on Thursday. More on all that below.

Markets shrug off tariffs threat

Tariffs, schmariffs: Investors on Friday are largely brushing off President Trump’s latest trade-war barrage. Stocks have rallied in China, a major target on his tariffs hit list, while the dollar has fallen.

This is all playing out just hours after Trump unveiled his long-awaited plan for reciprocal tariffs against all trading partners, which, along with his levies on steel and aluminum imports and still-unresolved threats against Canada and Mexico, could still upend global trade.

What gives? To the seeming relief of investors, there was little detail in Trump’s latest executive order. And the measures won’t be enacted until early April at the earliest, giving federal agencies time to study how to calibrate country-specific levies.

“Markets had to decide whether the president was being a protectionist or a pushover, and for now are erring toward pushover,” Paul Donovan, the chief economist at UBS Global Wealth Management, wrote in an investor note on Friday. “The delay is seen as an opportunity to do ‘deals’.”