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Tariff Reversal Hits Home; ‘A Tiny Win,’ CFO Says
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Good morning, CFOs. What’s next with trade deals in the wake of the Supreme Court's tariff verdict; SOTU address on Tuesday comes on the heels of setbacks as Trump administration aims to focus on first-year accomplishments; winners and losers from the HALO trade.
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A Mexico upholstery plant of Ethan Allen, whose executives are working to understand the tariff ruling’s effect. ETHAN ALLEN
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Corporate and world leaders continue to digest Friday’s Supreme Court ruling reversing President Trump’s tariffs. According to the White House, the Trump administration expects all countries to abide by their commitments, Barron’s reported.
In response, Trump over the weekend said he would increase to 15% a global tariff that will replace many of the duties ruled illegal by the higher court. That’s up from the 10% level the president announced a day earlier on Friday. But the tariffs have so far failed to achieve one of their key stated goals: rebalancing lopsided global trade.
A few issues and other related news to catch you up:
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With the bulk of Trump’s tariffs struck down by the Supreme Court, and a new, temporary global tariff in place, fresh questions hang over the U.S. economy.
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U.S. trade deals with trading partners including Japan, India and the U.K. are effectively nullified with the court’s ruling, Barron's reported. But the ripple effects with China will be key to watch, especially ahead of Trump’s meeting with Chinese leader Xi Jinping in Beijing in April, the AP reported.
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Key quote: “It will give China a moral boost in their negotiations with Trump’s team ahead of the summit, but they are prepared for the scenario that nothing actually changes in reality,” said Sun Yun, director of the China program at the Stimson Center, a Washington-based think tank.
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Headlines
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What to Know About Trump’s New Tariff: WSJ
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Trump’s Options After the Supreme Court Said His Tariffs Are Illegal: Bloomberg
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Europeans to Suspend U.S. Trade Deal Approval Amid 'Pure Customs Chaos': Barron’s
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Trump’s Commerce Secretary Loves Tariffs. His Former Investment Bank Is Taking Bets Against Them: Wired
ICYMI: Meanwhile, our WSJ colleagues reported how the reversal is causing U.S. business to weigh the wisdom of investigating if importers can reclaim billions of dollars in paid levies, and whether that path is worth the political fight to claw back those funds.
Key quote: “My emotional response is muted,” said Mark Mintman, chief financial officer for Kids2, an Atlanta-based manufacturer of baby products and toys, given all of the uncertainty and potential additional tariffs. “I’ll take this as a tiny win.”
Finally, the Journal is inviting subscribers to submit questions ahead of Trump’s first State of the Union of his second term.
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Content from our sponsor: Deloitte
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Elevance Health CFO: ‘Empower People With Tools, Training, and Trust’
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Mark Kaye, CFO of Elevance Health, shares how AI, cross-functional teamwork, and empathy can shape a future-ready finance organization. Read More
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Monday
Earnings: Diamondback Energy, Dominion Energy, Domino’s Pizza, Erie Indemnity, Keysight Technologies, Oneok and Viper Energy
Tuesday
Earnings: American Tower, Axon Enterprise, Bank of Nova Scotia, Constellation Energy, CoStar Group, EOG Resources, Expeditors International of Washington, Fidelity National Information Services, First Solar, GoDaddy, Henry Schein, Home Depot, HP Inc., Keurig Dr Pepper, MercadoLibre, Mosaic, NRG Energy, Realty Income and Workday
S&P Cotality releases its Case-Shiller National Home Price Index for December.
The Conference Board releases its Consumer Confidence Index for February.
Wednesday
Earnings: Agilent Technologies, APA, Bank of Montreal, Circle Internet Group, Heico, IonQ, Lowe’s, Nutanix, Nvidia, Paramount Skydance, Pinnacle West Capital, Pure Storage, Salesforce, Snowflake, Synopsys, TJX Cos., TKO Group Holdings, Trade Desk, Universal Health Services, VICI Properties and Zoom Communications
Thursday
Earnings: AES, Autodesk, Block, Canadian Imperial Bank of Commerce, CoreWeave, Dell Technologies, Emcor Group, Hormel Foods, Intuit, J.M. Smucker, Monster Beverage, NetApp, Public Service Enterprise Group, Qnity Electronics, Rocket Cos., Rocket Lab, Royal Bank of Canada, SBA Communications, Sempra, Solventum, Viatris, Vistra, Warner Bros. Discovery and Zscaler
Friday
The Bureau of Labor Statistics releases the producer price index for January.
The Institute for Supply Management releases its Chicago Business Barometer for February.
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The State of the Union address. The president’s primetime address to Congress on Tuesday comes on the heels of several setbacks, including Friday’s Supreme Court decision ruling against Trump’s signature tariff policy.
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Can Netflix seal the deal? Netflix has a $72 billion deal to acquire Warner’s movie and television studios and the HBO Max streaming platform. Trump demanded over the weekend that Netflix kick former national security adviser Susan Rice off its board, adding another political headache to the streaming company’s pursuit of Warner Bros. Discovery’s key entertainment assets.
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Massive winter storm bearing down on the Northeast and mid-Atlantic. The blizzard is putting states on emergency measures and upended air travel, with airlines canceling more than 8,000 flights scheduled for Sunday and Monday.
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What Else Matters to CFOs
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U.S. investors are going low tech. ULLSTEIN BILD/GETTY
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After a three-year love affair with anything related to artificial intelligence, U.S. investors are flocking to the factory owners, fast-food restaurants and commodity companies that have seemingly strong odds of surviving the technological revolution intact.
Call it the AI immunity trade, HALO—for “heavy assets, low obsolescence”—or just another iteration of the jitters that have periodically rippled through markets since the AI investing boom began. The winners include McDonald’s, Exxon Mobil and tractor maker Deere. Left behind are the perceived potential victims of the AI revolution, a list that has ranged from wealth managers to software firms.
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“The tariffs are an asphyxiating tax, the tariffs are an economic depressant, and they cause people to raise prices when they wouldn’t otherwise.”
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—Rick Woldenberg, the educational-toy business chief executive who sued over President Trump’s tariffs. He said the Supreme Court’s landmark ruling in favor of his business’s legal challenge was an emphatic victory—but he’s already moving on.
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The WSJ CFO Council Summit
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This March 23–24, financial leaders will gather in Palo Alto for The WSJ CFO Council Summit to examine how CFOs are navigating market volatility, evolving trade and regulatory policy and the growing impact of AI on the future of the enterprise. Join the CFO Council and be part of the conversations shaping the future of finance and corporate leadership.
Request Invitation.
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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy. Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew. You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.
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