Friday 25/04/25

Donald Trump urges Vladimir Putin to stop attacks on Ukraine (Financial Times, Henry Foy, Christopher Miller and Max Seddon) highlights Trump’s latest musings on Ukraine, this time criticising Putin over the latest major airstrikes on Ukraine. Ironically, Russia launched the strikes just as Trump was criticising President Zelenskyy for delaying peace. The drama continues…

Meanwhile, China tells US to ‘cancel all unilateral tariffs’ if it wants talks (Financial Times, Joe Leahy, Wenjie Ding and Demetri Sevastopulo) shows that China’s not in a conciliatory mood as it demanded that the US “completely cancel all unilateral tariff measures” if it wanted any kind of engagement on trade talks. It also confirmed that there are are currently “no economic and trade negotiations between China and the United States” despite Trump’s comments to the contrary. China views the tariff measures as economic bullying. From where I’m standing, it looks like Trump is already caving (at least to some degree) as he’s already pulled back on some tariffs by allowing exemptions for smartphones, semiconductors and electronics…

As for tariff consequences, Corporate America puts Wall Street on alert over damage from trade war (Financial Times) highlights concerns expressed by company chiefs from industries including transport, energy, telecoms and homebuilding in recent quarterly earnings calls, Consumer giants ring warning bells over Donald Trump’s trade war (Financial Times, Madeleine Speed and Gregory Meyer) mentions specific examples like PepsiCo and Proctor & Gamble cutting their full year outlooks and Unilever and Nestlé talking about having to hike

prices to take the tariffs into account. For Baby Strollers, There’s No Way Around China Tariffs (Wall Street Journal, Jon Emont) gives a really good example of what it means for real consumers on the ground. New parents in America are finding that it’s almost impossible to buy baby stuff that doesn’t come from China – and it’s even harder to find toys that aren’t made there either! About 95% of imported baby strollers come from China and about 75% of toys and infant furniture also originate there. * SO WHAT? * The thing is that while Trump and chums talk about short term pain for long term gain, real companies and real people are suffering. This cannot go on forever. Trump needs to put together robust and reliable trade deals fast – particularly with China – otherwise I would have thought that any kind of support for what he’s doing right now will just evaporate.

Elsewhere, UK edges closer to youth visa deal with the EU (Financial Times, George Parker and Andy Bounds) we see that Britain is getting closer to creating a post-Brexit youth visa scheme with the EU. Brussels wants to bring up a “youth experience scheme” at UK-EU “reset” talks to be held in London on May 19th. The scheme would allow people under 30 from the EU to spend up to three years in the UK and vice-versa but Downing Street is fully aware that there could be backlash from the UK side, particularly from those who are sensitive to immigration issues who say that such a system could be open to abuse.

Elon Musk forced back to the boardroom as Doge ‘blowback’ pummels Tesla (Financial Times, Joe Miller, Kana Inagaki and Rafe Uddin) follows on from what I said yesterday about Musk turning his attention back to running Tesla and suggests that his top priority should be repairing relations with Beijing while Tesla sales plunge in Europe despite rebound in electric car demand (Daily Telegraph, Matt Oliver) gives further evidence of the EV maker’s downfall as figures from the European Automobile Manufacturers Association (ACEA) show that Tesla’s sales in the EU fell by 37% in Q1 of 2025 while overall EV sales in the bloc rose by 24%. * SO WHAT? * I know that this is going to sound somewhat defeatist but I really believe that Tesla is going to continue to fall from grace. As I’ve said before, Trump doesn’t seem to be interested in pushing the EV agenda in the US, the European buyers are losing interest in the brand and it’s getting absolutely spanked in China with superior domestic makers who have better and cheaper tech. It seems to me that the only real value it has now is its tech and its driverless capability. In fact, US to loosen rules on self-driving vehicles criticised by Elon Musk (Financial Times, Stephen Morris and Kana Inagaki) shows that there is some good news for Musk incoming on this because the US

transportation secretary is about to make it easier to deploy self-driving cars on US roads. Despite this, I know this is a bit punchy but I think Musk should sell Tesla while it still has value, keep a chunky stake in it so he’s still got skin in the game but concentrate more of his efforts on SpaceX (particularly Starlink), xAI and X. I think he should sell to a trad car manufacturer that’ll have superior distribution capacity.

Talking of trad car makers, Nissan warns of $5.3bn loss from higher restructuring costs (Financial Times, Harry Dempsey and Kana Inagaki) shows that the Japanese car maker slashed its annual guidance and announced major cuts to its global production capacity and headcount. Tariffs won’t make things any easier either. * SO WHAT? * This disastrous performance makes finding a suitable partner even more urgent following collapsed talks with Honda earlier this year. Interestingly, Foxconn has expressed an interest in partnering up with it – which could certainly prove to be pretty interesting!

Former EY and PwC bosses launch UK boutique targeting Big Four clients (Financial Times, Stephen Foley and Ellesheva Kissin) shows that some accountants can be interesting 😁 as the former head of EY and the former COO of PwC are joining forces to launch a rival accounting and consulting firm, Unity Advisory, backed by PE money from Warburg Pincus. They want to nick British clients and partners from the Big Four. A launch is expected in June and it has already started to recruit. Unity will offer tax and accounting services, tech consulting and M&A advice – but it will not have an audit business because that is where heavy regulatory scrutiny tends to kick off. * SO WHAT? * This sounds quite interesting as I imagine it’ll pitch itself as the Big Four alternative without the baggage and conflict of interest worries of their much bigger rivals. It’s all good in theory but it will have to prove itself!

I thought I’d include Private equity in the time of Trump (Financial Times, Robert Armstrong) because what it talks about is something that I’ve been wondering about myself recently! Market volatility and unpredictable trade policies have led to a reduction in flotations and M&A activity which has meant that the likes of KKR, Blackstone and Carlyle have fewer options when it comes to exiting their investments. * SO WHAT? * This problem means that large investors are now looking at ways to sell out of illiquid private investment funds which is making the problem worse. I would have thought that PE firms that have cash piles could snap up some pretty good bargains now as market conditions are getting “yippy” but there is also increased risk that investments

could blow up in their faces or they could alternatively end up wearing the assets for longer than planned unless trading conditions improve and get more predictable from here.

Boutiques are stuck with pricey idle bankers (Financial Times, Lex) is an interesting article which draws attention to the widening gap between deal expectations at the beginning of the year and the reality of the deal drought right now. * SO WHAT? * Although big investment banks will be feeling the pain of lower-than-expected advisory fees, at least they have their trading activities to keep the lights on. However, M&A advisory specialists like Moelis & Co, Lazard, Evercore and PJT are more exposed to deal reticence and their expensive staff costs will look increasingly unsustainable unless activity picks up significantly from here.

Meanwhile, Revolut aims to start UK banking service this year as profits surge (The Times, Ben Martin) shows that the fintech group is moving in the right direction as its annual profits breached the £1bn mark for the first time and it’s now on track to offer a banking service in the UK this year. Customer balances increased by 66% over last year while employee numbers climbed from 8,152 to 10,133. Revolut was granted a banking licence in the UK last July and since then it has been making preparations to launch its UK banking operations later on this year. There are expectations of an IPO, but at the moment it looks like the likely listing venue will be New York.

In a quick scoot around some of today’s other interesting stories, Democratic lawmakers warn top law firms that deals with Donald Trump may be illegal (Financial Times, Stefania Palma and James Fontanella-Khan) shows that Democratic legislators sent letters to nine law firms – including Paul Weiss, Scadden and Kirkland & Ellis – saying that their agreements to support Trump’s preferred causes with pro bono work and to ditch diversity policies in recruitment could violate federal and state laws. The lawmakers said that there were many “conflicts of interest” in the deals. * SO WHAT? * This is all very well, but the fact is that Trump is at the beginning of his term, he’s putting allies in positions of power and attacking all areas – including academia and the media – that could take him to account. If law firms don’t want to go out of business there aren’t many options open to them. I agree with what the lawmakers have said but, in practice, I think that the firms have had no option but to cave.  More power to those who are resisting, however. It takes a lot in this environment to say no to Trump.

In tech news, Google owner beats forecasts and announces $70bn share buyback (The Times, Louisa Clarence-Smith) shows that Alphabet outperformed Wall Street’s revenue and profit expectations for Q2 thanks to robust sales in its search advertising business. It added to the feelgood by announcing a whopping $70bn share buyback programme as well! CEO Sundar Pichai said that this performance was powered by its ongoing investment in AI which has been helping its search business. Advertising revenue from Google makes up 75% of Alphabet’s overall revenue! Sales from cloud computing were also strong.

Elsewhere, Intel to cut jobs and capex as Trump tariffs cloud outlook (Financial Times, Michael Acton) highlights ongoing difficulties at Intel as it announced plans to cut capex and swathes of managers as part of a bigger turnaround effort. Its guidance was also reduced for the current quarter thanks to the effect of Trump’s tariff plans. It sounds like the turnaround has got a long way to go!

Then in Comcast Loses Broadband Customers, Takes Theme-Park Hit From L.A. Fires (Wall Street Journal, Patience Haggin) we see that the media company’s revenues managed to beat analyst expectations by a whisker. On the downside, its profits fell by 12.5%, it lost more broadband customers than expected and the LA fires hit theme park revenues. * SO WHAT? * The company is saying that it is “well positioned to handle whatever lies ahead” but I guess no-one can say that with complete certainty – particularly as they are exposed to discretionary consumer spending given most of their business areas. If consumers feel the pinch because of Trump’s tariffs then Comcast might start to feel it as well… 

Back home, UK consumer confidence dips to lowest level since 2023 amid tariff concerns (The Guardian, Richard Partington) cites the latest data from GfK which shows that UK consumer confidence has hit a new low thanks to worries about the impact of Trump’s tariffs and “Awful April” changes. This is unsurprising but it’ll be interesting to see how long it’ll take for us to bounce back!

This guy does amazing things with cabbage! Now there’s a sentence you probably never thought you’d see! Worth a watch – it’s impressive 👏👏👏