Donald Trump is building a reputation for himself as the flip-flopper in chief — the president who, after announcing a bold new policy today, is more than likely to reverse it tomorrow.

Why it matters: In a chaotic and unpredictable world, the federal government normally acts as a stabilizing force. Under Trump, it has become the primary driver of the chaos.

The big picture: Across-the-board tariffs on Mexico and Canada — two of America's three largest trading partners — have been on and then off and then on and then off. Colombia knows the feeling.

• The government put 80 million square feet of its real estate up for sale, only to then take the "for sale" sign down.
• Trump has fired federal employees at the CDC, the FDA, the National Nuclear Security Administration, and the Department of Agriculture, only to then re-hire them.
• He touted the use of military aircraft to carry out high-profile deportations, only to suspend the flights after finding them costly and inefficient.

For the record: "This is the art of the deal," a White House spokesman tells Axios about the tariff reversals, adding that the General Services Administration and individual agencies, rather than Trump himself, are responsible for other executive-branch actions.

• Elon Musk is also distancing himself from the firings of federal workers.

Flashback: In a matter of days, Trump denounced Ukrainian President Volodymyr Zelensky, then made up and invited him to Washington, then chastised him in the Oval Office, then expressed openness to rebuilding ties, then cut off arms and intelligence sharing.

Zoom in: Republicans in Congress have repeatedly found themselves boxed in by Trump's flip-flops.

• He spent weeks equivocating on whether Congress should pass his agenda in one bill or two — then blindsided the Senate by backing House Republicans' one-bill approach.
• He promised not to cut Medicaid, then backed a House GOP budget plan that could force exactly that in order to meet its proposed spending cuts.
• He has vowed to achieve the unthinkable by balancing the budget — while endorsing trillions of dollars in tax cuts, plus new campaign promises like no tax on tips or overtime.

Follow the money: The stock market, for one, is tiring of such shenanigans. On Wednesday, stocks fell on news that tariffs were being imposed — and then on Thursday, when those tariffs were suspended, stocks fell again.

• Foreign investors like French energy company Engie are on the record as saying that they need clarity and predictability in order to invest in the U.S. — something that's clearly missing at the moment.
• "I'm not even looking at the market," Trump told reporters in the Oval Office Thursday, disavowing his longtime favorite metric for economic success.

Zoom out: In crypto, a rug-pull is any project that's announced and then abandoned — often at great expense to anybody who believed the initial announcement.

Between the lines: Elon Musk — who may or may not be the head of DOGE, depending on who you ask — is at least partially responsible for the administration's "move fast and break things" ethos.

• "We will make mistakes. We won't be perfect. But when we make a mistake, we'll fix it very quickly," Musk said in a Cabinet meeting last week, pointing to the reversed cancellation of Ebola funding.
• DOGE has made plenty of mistakes, but has not always been transparent about fixing them — quietly pulling down billions of dollars from its online "wall of receipts" on multiple occasions.

The bottom line: This is just exhausting.

Donald Trump famously believes that "trade wars are good, and easy to win," as he tweeted in 2018. The market, however, believes the opposite: That a trade war is bad, is easy to lose, and could plunge the U.S. into an avoidable recession.

Why it matters: Trump 1.0 listened to the market. Trump 2.0 is very different.

• Traders are no longer convinced they can rely on the "Trump put," the idea that the president will reverse course on policies the market doesn't like.

What they're saying: The clearest articulation of the Trump administration's attitude to the market came from Treasury Secretary Scott Bessent.

• "Wall Street's done great," he said Tuesday, "but we have a focus on small business and the consumers. So we are going to rebalance the economy."

Between the lines: Bessent singled out "the level of the 10-year bond" as "one of the biggest wins for the American people."

• A former macro hedge fund manager, Bessent knows the decline in long-term interest rates is a function of pessimism about future growth, and expectations that the Fed is going to have to keep rates low to stimulate employment.

By the numbers: On February 11, the market put just a 1% probability on the Fed cutting rates four times this year, assuming each cut is 25 basis points.

• Today, the probability of at least four cuts has risen to 30%. The probability of three or more rate cuts has ballooned to 62%.
• Given the stubbornness of inflation, which is likely to become even more stubborn as higher tariffs start to bite, the only reason for the Fed to cut that many times would be a significant economic slowdown, or perhaps even a recession.

The big picture: There is "a new reality of higher domestic prices and weaker growth, owing to Trump's tariff measures," George Vessey, the lead macro strategist at Convera, wrote in a note.

• That in turn is causing the dollar to weaken, which is the opposite of what should happen when tariffs rise, according to textbook economics.
• It's true that all things equal, U.S. tariffs should cause the dollar to strengthen, as fewer dollars get sold to pay for imports.
• But these tariffs are so big, and so potentially damaging to the U.S. economy, that — according to foreign exchange markets — domestic macroeconomic effects are likely to dwarf the effects of capital flows.

Zoom out: The dollar has historically benefited from "safe haven" status. It's a reliable store of value during volatile times.

• When the president of the United States is the person causing all the volatility, however, the dollar looks less attractive on that front.

The bottom line: The stock market is not the economy, especially when it's dominated by megacap tech companies.

• But there are many other indicators of where the markets think the economy is headed, and all of them are flashing "very worried."

President Trump imposed sweeping tariffs Tuesday on America's largest trading partners, triggering a global trade war that promises to affect the wallets of everyday Americans.

Why it matters: After running — and winning — on a promise to curb inflation, Trump's trade war threatens to raise prices for everything from food and clothes to cars and computers.

• Some estimates suggest just Tuesday's tariffs alone could cost the average U.S. household $830 a year — and that's before you factor in the cost of anticipated retaliatory tariffs from Canada, China and Mexico.
• Already, the impacts are escalating — the map above, for example, was based on a 10% China tariff, which has now been raised to 20%.

Tariffs on the top U.S. import partners

Zoom out: More than 40% of all U.S. imports come from Mexico, Canada and China — over $1.3 trillion worth in 2024 alone, per Census data.

• The tariffs will affect big-ticket items like machinery and cars, but also consumer staples — everything from beer (more than 80% of U.S. imports come from Mexico) to oats (almost all U.S. imports come from Canada).

Tariffs as a regressive tax

Zoom in: Tariffs are generally regressive, in that they more heavily affect lower-income people who spend a greater share of their resources on goods, particularly necessities like food and fuel.

• As data from the Progressive Policy Institute shows, even before Trump's new levies this week, the existing U.S. tariff system already charged much higher rates for low-cost products than their luxury counterparts.

The China trade deficit

Between the lines: Tariffs, especially on China, do move the needle on trade a little, but over time it tends to rebound.

• The trade deficit with China has been more than $200 billion for 20 years now, and Chinese retaliatory tariffs will offset some of the benefit of the new duties Trump assessed.

Fentanyl realities

The intrigue: In assessing tariffs on Canada and Mexico in particular, Trump cited the flow of fentanyl across both borders.

Yes, but: As U.S. Customs and Border Protection data shows, over the last 40 months, fentanyl volume that's trafficked through Mexico is almost 1,000x the amount coming through Canada.

• In January 2025 alone, CBP stopped almost half a ton of fentanyl at the Mexican border — and about half an ounce at the Canadian border.

The next tariffs

What to watch: The tariffs are a long way from over — the White House has made clear more are coming, and they'll stack up on top of each other.

• Steel and aluminum tariffs come in next week, which will particularly impact automakers and beverage companies, among others.
• Reciprocal tariffs on April 2 could affect dozens of countries, with as-yet unknown impacts on almost everything the country imports.

Go deeper: Tariff worries, Trump cuts signal emerging economic growth risks

Editor's Note: This story has been updated with additional details on the tariff map.

President Trump has proposed abolishing the EB-5 visa for immigrants willing to invest in the U.S., and replacing it with a "gold card" that, he said, could see enough demand to eliminate the national debt.

Why it matters: For all of Trump's debt-busting dreams, realistic demand for any such program is likely to be in the thousands of people, not the millions.

• Indeed, according to experts, when it comes to "golden visas" there could be more demand from Americans looking to emigrate than there is from non-Americans looking to immigrate.

Where it stands: The gold card is designed to replace the EB-5 investor visa, which gives out green cards in return for investment in the U.S. economy.

• The minimum cost of an EB-5 ranges from $800,000 to $1.05 million, substantially all of which takes the form of an investment and thus doesn't reduce the applicant's net worth.
• Between 2017 and 2024, an average of 8,823 EB-5s were issued per year, per the EB-5 visa data dashboard.

Between the lines: Trump's proposed gold card costs five times as much as an EB-5 — $5 million — and the money would go straight to the government, where it could help reduce the national debt.

Flashback: Both the U.K. and Australia have tried similar "golden visa" programs. Both were wound down after interest peaked at a few hundred applications per year, said London School of Economics professor Kristin Surak, author of "The Golden Passport: Global Mobility for Millionaires."

• "If it's a donation, the interest will be in the very low thousands per year," Surak told Axios.

Zoom in: Anybody with a "gold card" would be obligated to pay U.S. tax on their global income, said Atossa Araxia Abrahamian, author of "The Hidden Globe: How Wealth Hacks the World."

• That makes U.S. tax residence significantly less attractive to the global ultra-rich than most other jurisdictions.
• Besides, Abrahamian noted, the trade in golden visas from places like Portugal and Malta, both E.U. member states, has been going on for long enough that most ultra-rich people who want one already have one.

Zoom out: When it comes to the global market in golden visas, "one of the most remarkable changes in the past few years is the huge increase in interest from U.S. citizens" looking to gain residence in countries like Portugal, according to Surak.

• "People are looking to secure access to the U.S.," she said, "but U.S. citizens are also looking to hedge their bets and secure a Plan B elsewhere."

The bottom line: It's very unlikely that there would be more demand for the gold card than there is right now for the EB-5, to say nothing of enough for Trump's $50 trillion goal.

Who's going to be left holding the $400 billion bag? That's the ultimate question that undergirds the debate over the future of the post office.

Why it matters: The U.S. Postal Service suffers under a system of pension obligations that is seen at no private company and in no other government department.

• But there's also historically been no appetite in Congress to fix this longstanding problem.

Driving the news: The White House on Friday denied a Washington Post report that President Trump intended to dissolve the USPS board and take control of the Post Office — but Trump did say that he wanted some kind of Commerce Department "merger" that would ensure the agency "doesn't lose massive amounts of money."

The big picture: Per a comprehensive report that was released last year by the USPS inspector general, the Post Office ended fiscal year 2022 with pension and healthcare liabilities of $409 billion — against assets of just $290 billion.

• Retirement costs alone make up about 12% of the USPS's total expenses — but the Post Office has no control over where that money goes, how it's invested, or how it's disbursed.

By the numbers: The Post Office has more than 700,000 retirees and survivors collecting benefits — and employs more than 500,000 people who will collect pensions in the future.

• The agency pays $10 billion per year into federal pension programs it doesn't control.
• That money is invested extremely conservatively, with a 100% allocation to Treasury bonds. As a result, the funds actually lost money, in real terms, in both the 2021 and 2022 fiscal years.
• According to the inspector general's report, the $155 billion deficit in the Post Office's retirement funds at the end of fiscal 2021 would have been a $963 billion surplus if that money had been invested in a standard portfolio of 60% stocks and 40% bonds since inception.

The intrigue: Other federal agencies receive money from Congress to make required employer contributions; the Post Office doesn't.

• Private pension plans, and even some government plans, including the National Railroad Retirement Investment Trust and the Retirement System for Tennessee Valley Authority, are allowed to invest their money in stocks and other assets that provide higher long-term returns than Treasury bonds. The Post Office isn't.

The bottom line: More than a million workers have some kind of Post Office pension. Who's going to pay them that money, and where it's going to come from, will ultimately determine the fiscal viability of the Post Office as a business.

As Donald Trump pivots away from Europe and toward Russia, he's putting at risk the deepest and most important economic relationship in the world: that between the U.S. and Europe.

Why it matters: The U.S. economy has reaped enormous dividends from the way in which the U.S. government has provided a security guarantee to Europe. If that guarantee goes away, the dividends might, too.

The big picture: "No two other regions in the world are as deeply integrated as the U.S. and Europe," per AmCham EU, which collates such figures.

• More than 60% of foreign investment into the U.S. comes from Europe, and in the other direction, more than 60% of foreign investment by the U.S. goes into Europe.
• Similarly, U.S. companies employ about 5 million Europeans, while European companies employ some 5 million Americans.
• European companies are major employers in several Trump-supporting states, including BMW in South Carolina, Volkswagen in Tennessee, Airbus in Alabama, and Siemens in Texas and the Carolinas.

Zoom out: "Security goes hand in hand with interdependence," Abraham Newman, a Georgetown University political scientist, tells Axios.

• "From the Marshall Plan to the creation of the EU, the U.S. made the bet that if you solved security issues it would generate huge new wealth for U.S. companies. And it did," he says.
• Former U.S. Treasury secretary Hank Paulson tells a story of a Chinese official saying to him that "you have all the good allies." Effectively, China has always been stymied, in terms of competition with the U.S., by the fact that America is strongly allied with Europe.

Between the lines: The depth of the U.S.-EU relationship dwarfs anything that Russia can offer. Even before Russia first invaded Ukraine in 2014, for instance, U.S. goods exports to Russia were a mere $11 billion, roughly one-third of U.S. exports to Belgium alone.

• Russia, per the New York Times, claims American losses due to pulling out of Russia have totaled more than $300 billion. But that doesn't mean there's anything close to $300 billion of opportunity in reopening Russia to U.S. business.
• Edward Fishman, a former Russia sanctions lead at the State Department, tells Axios: "The U.S. is much better at turning off economic activity than we are at turning it on."
• Even if all U.S. sanctions on Russia were lifted tomorrow, most American companies would still be extremely wary of reentering a country led by Vladimir Putin, and would likely stay away.

What's next: If Europe no longer benefits from U.S. geostrategic protection, that in turn will affect the way American companies are viewed on the continent, per Georgetown's Newman.

• As U.S. companies become increasingly viewed as a mask for U.S. power, he says, the rhetoric surrounding them will move from complaints about fair competition to worries that they represent a security threat.

The bottom line: If Europe starts seeing the U.S. as an enemy superpower, the negative consequences for the U.S. domestic economy would likely be enormous.

As the world seeks ways to retaliate against U.S. tariffs, so-called "first buddy" Elon Musk appears to be high on the list of targets.

Why it matters: Targeted retaliation is designed to give supporters of Donald Trump an incentive to try to persuade him to deescalate any trade war.

• No Trump supporter is closer to the president than Musk.

Driving the news: China is slow-walking approval of Tesla's autonomous driving technology, the FT reported on Monday, with authorities seeking to use that approval "as a bargaining chip in trade negotiations with Trump."

• The White House, in response to state lawsuits, has said Musk has "no actual or formal authority" to make decisions himself.

The big picture: A key aspect of negotiating with Trump is being able to influence him directly.

• It helps explain why a Brookings Institution analysis found that Chinese retaliatory tariffs will affect more than twice as many workers in counties that voted for Trump in 2024 as workers in counties that voted for Kamala Harris.
• Similarly, when Trump announced 25% tariffs on all Canadian imports, the premier of British Columbia, David Eby, banned alcohol from red states in government-run BC Liquor Stores.

How it works: Canadian politicians like Eby have offered a playbook of sorts.

• Doug Ford, the premier of Ontario, said he's "ripping up the province's contract with Starlink," a unit of Musk-owned SpaceX, explaining that "Ontario won't do business with people hellbent on destroying our economy."
• Canadian politicians like New Democratic Party leader Jagmeet Singh and Liberal Party leadership candidate Chrystia Freeland called for a 100% tariff on Tesla imports.

Where it stands: Musk's businesses have substantial international exposure. The U.S. accounts for less than half of Tesla's total sales, which means foreign governments in general, and China in particular, have a significant amount of control over how many cars he can sell.

• SpaceX, too, has many foreign clients. Its rockets have launched satellites for countries like Australia, India, Turkey, Spain and South Korea, while Starlink's fastest growth is seen in countries like Nigeria and Kenya.
• X, Musk's social network, was found in breach of Europe's Digital Services Act, even as it faces multiple other complaints related to General Data Protection Regulation as well as election interference.
• Possible remedies, all of which will be handed down when U.S. relations with Europe are plumbing historic lows, range from massive fines to an outright ban.
• In Tesla's most recent list of risk factors in public filings, there's nothing about Musk's closeness to Trump, but there is a note that Musk's work at DOGE could end up meaning he spends less time running Tesla.

The bottom line: Musk's fortunes have until now seen a boost from his close association with Trump, although that already seems to be waning.

• If the rest of the world starts to think of his companies as being a proxy for Trump, and therefore worth attacking, the value of his Trumpiness might even turn negative.
• "Elon Musk's visionary leadership has been central to Tesla's rise," Saxo analyst Jacob Falkencrone wrote in a note this month, "but in 2025, his political and personal controversies are becoming a major investor concern."

The Foreign Corrupt Practices Act stands at the center of the global fight against bribery and corruption, and for the time being, it has been largely neutralized by Donald Trump.

Why it matters: The president's executive order pausing FCPA enforcement may act as a green light for corporate executives, both foreign and domestic, who have a high risk appetite and few ethical scruples about bribes and other forms of corruption.

• In turn, that risks putting law-abiding corporations at a competitive disadvantage when it comes to procuring government contracts.

Context: Congress passed the act in 1977 to root out the "foreign corporate payments problem," as law professor and FCPA expert Mike Koehler wrote in 2012.

• At its heart, the law prohibits giving "anything of value" to foreign officials to influence their behavior or secure business advantages.

The intrigue: While Trump's executive order claims that "American citizens and businesses" have suffered from FCPA enforcement, nine of the 10 biggest FCPA prosecutions have been against foreign companies, including Airbus, Siemens and Ericsson.

• Public U.S. corporations are subject to a vast range of anti-corruption laws, all of which continue to be enforced, which means weakening the FCPA might embolden foreign corporations more than domestic ones.
• "I don't think that non-American firms feel that they are as constrained as American firms by a lot of the American corporate governance statutes," Duke University law professor Rachel Brewster tells Axios.

Yes, but: The FCPA remains the law of the land, and the order is explicitly couched in terms of "eliminating excessive barriers to American commerce abroad."

• That suggests the Justice Department might pause enforcement for U.S. companies while keeping foreign corporations in its crosshairs, which Brewster describes as "a kind of legal industrial policy" where the DOJ concentrates its prosecutions on foreign firms in general, and Chinese firms in particular.
• The FCPA "could be a pretty powerful tool," Brewster says, in terms of the U.S. arsenal of retaliation against foreign countries engaged in a trade war.
• Michael DeBernardis, an FCPA attorney at Hughes Hubbard & Reed in Washington, agrees: "It wouldn't shock me to see the FCPA focused on non-U.S. companies."

Between the lines: DeBernardis expects that the most likely companies to try to take advantage of the pause will be U.S. companies involved in industries often faced with solicitation of bribes.

• While large public companies are unlikely to change their ways, private companies might be willing to take bigger risks. "I could certainly see certain companies or higher risk industries changing their calculation as to what the risk of an FCPA violation is based on this," DeBernardis says.

Flashback: Trump himself faced FCPA constraints when he attempted to build a hotel in Azerbaijan over a decade ago, per reporting from the New Yorker's Adam Davidson.

• As he was finalizing the deal in 2012, Trump went on CNBC to complain that the FCPA was "a horrible law and it should be changed."

The bottom line: While Trump didn't get his wish during his first term in office, things seem to be going very differently this time around.

The decision by President Trump to impose sweeping tariffs on Mexico and Canada is a stark repudiation of his own approach between 2017 and 2020.

Why it matters: No one yet knows whether these tariffs are an attempt by a transactional president to extract concessions from U.S. trading partners, or whether they're intended to become a permanent feature of the post-Trump landscape, designed to create a self-sufficient country much less reliant on international supply chains.

The big picture: This is the third major reconceptualization of North American trade since the end of the Cold War.

• Bill Clinton's NAFTA, which came into law in 1994, was an attempt to maximize trade and growth across North America.
• Trump 1.0's USMCA, which came into effect in 2020, was a renegotiation of NAFTA where the U.S. fought narrowly for its own best possible deal, with less concern for the consequences in Mexico and Canada.
• Trump 2.0's tariffs effectively tear up USMCA and the concept of trade deals. In their place is an isolationist ideology that, if sustained, could cause massive economic harm not only in the U.S. but around the world.

What they're saying: Trump's executive orders, entitled "Imposing Duties To Address The Flow Of Illicit Drugs Across Our National Border," explicitly say the tariffs are a response to "the sustained influx of illicit opioids."

• This announcement leaves open the possibility that should the fentanyl trade be addressed to Trump's satisfaction, the tariffs will be rolled back.
• Indeed, analysts at Goldman Sachs wrote in a note Sunday that "in light of their potential economic effects and the fact that the White House has set general conditions for their removal, we think it is more likely that the tariffs will be temporary but the outlook is unclear."
• "The national emergency we face is not about drugs or immigration," United Auto Workers president Shawn Fain said in a statement Sunday, urging Trump instead to "immediately seek to renegotiate our broken trade deals."

Between the lines: If the aim of the tariffs is to encourage companies to move manufacturing jobs from Mexico and Canada back to the U.S., then Trump will need to signal they are intended to be permanent. So far, that signal hasn't come.

The bottom line: Trump is unpredictable, and even he is probably unclear on how he would like to see his latest trade war play out.

• Even if this one is resolved quickly, however, Trump has now made clear that he can and will impose his beloved tariffs at any point and for almost any reason.

Cars that are made in America aren't only made in America — they're made across North America.

• As a result, Trump's across-the-board tariffs on all trade with Mexico or Canada risks making U.S. autos much more expensive than foreign imports.

Why it matters: The U.S. auto industry could shut down within a week, by some estimates, thanks to these tariffs. Even if it doesn't, there is no automaker that's set up to operate in a world of high-friction North American border duties.

The big picture: With modern supply chains, a single component in a vehicle can cross the U.S. border between six and eight times before final assembly.

• Trump's order makes it clear that duty is payable every time any component crosses into the U.S. — there's no "drawback" allowed that limits the tariff to just the value added abroad.

Zoom out: What that means is that the 25% tariffs won't just be payable on full vehicles that have their final assembly in Mexico, like the Chevrolet Equinox or the Ford Maverick.

• They're also going to affect nearly all of the components in nearly all cars made in North America, often multiple times over.
• Aside from the actual tariffs themselves, there's also no infrastructure in place to even place a precise dollar value on all the components that travel back and forth, let alone fill out customs paperwork on them.

The bottom line: If you add up all the tariffs that are going to apply to U.S.-made vehicles, they could easily end up dwarfing total tariffs on finished cars imported from Europe, Japan, or Korea.

• Far from boosting the U.S. auto industry, these tariffs, if they stay in place for any length of time, could end up decimating it.

The penny is seemingly immortal: Thousands of people have tried to kill it, but every time it has survived.

Why it matters: It now meets what might be its most formidable adversary yet, in the form of Elon Musk.

Driving the news: A post from the official DOGE account on X makes clear what everybody who has studied the subject already knows — that pennies are, quite literally, weighing down the American economy.

• "Few things symbolize our national dysfunction more than the inability to stop minting this worthless currency," wrote Caity Weaver in a 7,500-word jeremiad for the NYT Magazine last September.

By the numbers: The 240 billion pennies lying around the U.S. collectively weigh about 600,000 tons — the weight of three Nimitz-class aircraft carriers.

• The overwhelming majority of them made their way after being minted to some retailer, where they were given out in change. After that, they just stopped being used, because almost no one actually spends pennies.
• In fact, cash broadly is increasingly rare as a form of payment. Only about 16% of payments are made in cash, per the Federal Reserve banks, and cash is no longer the most popular form of payment even for purchases under $25.
• Then there's the cost — in fiscal 2024 the U.S. Mint reported each 1-cent penny cost 2.72 cents to produce, the 17th consecutive fiscal year the coin cost more to make than it was worth.

The big picture: The penny is such an anachronism that many of the original arguments for its abolition can now be applied to nickels and dimes, too.

• The last time the U.S. discontinued a coin was in 1857, when the half-cent sensibly disappeared. That coin was worth almost twice as much as a contemporary dime.

For the record: A DOGE spokesperson, asked whether they intend to abolish the penny, responded with "Shouldn't you ask Treasury?"

• Treasury didn't respond to a request for comment.

The bottom line: Dimes and smaller denominations serve no useful purpose. In a rational country, the nation's pockets would be weighed down with them no longer.

The markets have started pricing in an AI future that's going to be cheaper and more accessible than they had previously assumed.

Why it matters: The less money that companies need to spend on the AI equivalent of picks and shovels — Nvidia chips and the electricity needed to power them — the more profitable they will be.

Follow the money: What looked like a broad-based rout early on Monday turned out to be much more selective by market close.

• Each index generally fell in direct proportion to the weight of Nvidia. The Dow, which Nvidia joined in November with a relatively small weight, went up.
• While Nvidia lost $600 billion of market value in a single day, for instance, Apple gained more than $100 billion.

What they're saying: "If you still believe that AI is going to be big, this news out of China should only make you feel better," Siebert chief investment officer Mark Malek wrote on Monday.

• His argument is that DeepSeek's technological breakthrough will only serve to multiply the amount of performance that companies can get per dollar invested in AI.

The big picture: The market's theory of AI — at least up until the end of last week — was that, broadly, bigger is always better.

• Companies would see their share prices rise just on an announcement that they had bought a large number of Nvidia chips, even if they were extremely vague as to what they intended to do with them.
• Similarly, energy companies have been soaring on the grounds that there's no such thing as too much electricity when it comes to powering the AI revolution.

Reality check: DeepSeek has now shown it's possible to produce a state-of-the-art AI that needs fewer and less-powerful chips, less energy, and much less up-front investment.

• That seems bad for Nvidia, which has an effective monopoly on AI chips, and it's also bad for power companies who were counting on surging demand from data centers.

Where it stands: Last week, the markets believed that without billions of dollars in funding, it was impossible for rivals to compete with OpenAI. This week, they're not so sure.

• The markets were also pricing in massive compute costs for the biggest consumers of AI. Google, Meta, Amazon and Microsoft are expected to spend over $300 billion between them on capital expenditures this year.
• You can be sure that all four of them are revisiting those assumptions this week, asking if they can get the same bang for many fewer bucks.
• If some of the $500 billion earmarked for Stargate, for instance, can be redirected to other purposes that could fund a lot of very profitable opportunities.

Between the lines: The biggest market trend of recent years has been linked to the concept of "positive returns to scale." This is the idea that the bigger you get, the harder it becomes for anybody to compete with you, and the more your margins grow.

• That helps explain the enormous sums that investors have poured into AI companies in recent years.
• If AI is the future of business, however, and if powerful AI tools are available at low cost to any company on the planet, then, as Axios' Dan Primack wrote, Silicon Valley's enormous investment in foundational AI models may never see any returns at all.

The bottom line: What's bad for the companies looking to sell AI products is likely to be good for the companies looking to buy them.

• And there are many more of the latter than there are of the former.

This story has been corrected to indicate that Nvidia is a component of the Dow.

Elon Musk, the world's richest man, standing behind a podium bearing the Seal of the President of the United States, on Monday twice gave what scholars, journalists and rights groups said was a Hitlergruß, or Nazi salute.

• It doesn't seem to have done him (or his company Tesla) any visible harm.

Why it matters: Musk shrugged off accusations of Nazi symbolism as "dirty tricks," laughingly thanking the Anti Defamation League after they said it was merely "an awkward gesture."

• His reaction only served to further inflame much of the glee with which the sign was received within the far right.

Context: Musk has been making inroads into the far right for some time, endorsing the hard-right AfD in Germany, failing to stop the posting or amplification of pro-Nazi content on his social media site X, and responding to an antisemitic post on X as "the actual truth."

• Musk apologized, saying "it might be literally the worst and dumbest post I've ever done," and went on an apology tour to Auschwitz.

Follow the money: Financial markets have been bidding up Tesla stock as Musk has cemented his bonds to President Trump.

• On Tuesday, Tesla shares closed largely unchanged from their previous levels, indicating that in the eyes of the market, Musk did no harm to his position.
• The stock is up 65% since Trump's election, far outpacing peers and the market.

Between the lines: Steve Bannon, a self-appointed avatar of alt-right America, has called Musk "evil" and wants him removed from the White House.

• Musk's body language (regardless of his intent), insofar as it gains him the support of Bannon's base, will help neutralize that threat.

The bottom line: Musk seems to have roughly the same degree of control over his right arm as Dr. Strangelove.

• He also seems be just as central to the inner workings of the U.S. government.

The $TRUMP memecoin — a financial asset that didn't exist on Friday afternoon — now accounts for about 89% of Donald Trump's net worth.

Why it matters: The coin (technically a token that's issued on the Solana blockchain) has massively enriched Trump personally, enabled a mechanism for the crypto industry to funnel cash to him, and created a volatile financial asset that allows anyone in the world to financially speculate on Trump's political fortunes.

• Follow Axios' live coverage of Inauguration Day.
• After another massive overnight rally, as of Sunday morning Trump's crypto holdings were worth as much as $58 billion on paper, enough -- with his other assets -- to make him one of the world's 25 richest people.

Where it stands: While the Biden administration broadly took the view that memecoins like $TRUMP are securities subject to SEC regulation, the incoming Trump administration has pledged to be much more crypto-friendly and to regulate such coins with a light or nonexistent touch.

For the record: The coin's official website, GetTrumpMemes.com, urges visitors to buy coins with either dollars or crypto in order to "Celebrate Our Win & Have Fun!"

• The coin is "not intended to be... an investment opportunity," per the site, which says that it "has nothing to do with any political campaign or any political office."
• That hasn't stopped investors from making millions by speculating on the price of the coin, which was launched while Trump was reportedly hosting a "Crypto Ball" in Washington.

By the numbers: Some 200 million of the 1 billion total coins have already been released and are being actively traded. The rest, which are owned by Trump-controlled entities, will be able to be sold at various points over the next three years, starting in April.

• On average, Trump's companies will be able to sell some 24 million coins per month into the market, which at current prices (which keep moving), would amount to an income of $1.73 billion per month, or $20.7 billion per year. (Although no one has a clue what the value of the coin will even be this afternoon, let alone three years from now.)
• Not to be outdone, Melania Trump launched her own coin MELANIA Sunday night, almost immediately achieving a market capitalization north of $5 billion.

Flashback: During the first Trump administration, there were worries that individuals were able to enrich the president by staying at his hotel in Washington.

• Since then, Trump has listed a meme stock where he controls more than 50% of the shares — and, now, has a meme coin that's even less tethered to reality.
• Both of them represent a much more direct way of funneling money to Trump than staying at his hotel did.

Between the lines: The emoluments clause of the Constitution, written in 1787, hardly envisaged a world where a president could conjure billions of dollars of wealth out of nowhere just by endorsing a meme.

• In the present day, it's impossible to track who's going to be buying this coin over the next three years and thereby directing their money directly at Trump.
• Given the Supreme Court's expansive view of presidential immunity, there's a good chance that any such action will be deemed lawful.

The bottom line: Trump has just delivered a masterclass in the ability of a president to turn power into wealth.

Editor's Note: This story has been updated to reflect the $TRUMP coin's latest prices.

If capitalism without bankruptcy is like Christianity without hell, as former astronaut and Eastern Airlines CEO Frank Borman famously put it, then the U.S. over the past decade or so has been a joyous church indeed.

Why it matters: We're now beginning to see signs that the days of very few bankruptcies might be coming to an end, thanks in large part to the Fed.

How we got here: The financial crisis of 2008 to 2009 saw a sharp rise in bankruptcies, as you'd expect.

• It also caused the Fed to cut interest rates to zero and to keep them there for many years.
• It led bank regulators to get stricter about the amount of risk they allowed banks to take on, even as borrowers also started to get worried about the consequences of having too much debt.
• The result was a years-long decline in bankruptcy filings, as smaller debts became easier to refinance in an easy-money era.

Where it stands: A recent uptick in the numbers suggests that era might have ended with the Fed rate hikes of 2022. As CEA chair Jared Bernstein tells Axios, "we know this variable is pretty highly elastic to rate rises."

The big picture: Bankruptcy — a process that wipes out debts and allows fresh starts — is a necessary part of any dynamic economy.

• Fewer bankruptcies isn't always a good thing. It can be a sign of excessive risk aversion on the part of both lenders and borrowers, a paucity of what John Maynard Keynes characterized as "animal spirits."
• As University of Illinois law professor Robert Lawless notes, bankruptcy filings are not a good measure of the health of the economy. "Note how bankruptcies declined as the economy went into recession in the early 2000s," he said of the chart above.

By the numbers: Bankruptcy filings by companies with assets or liabilities greater than $2 million if they're public (or $10 million if they're private) rose to 694 in 2024. That's up 9% from 2023 and up a whopping 87% from a record low of 372 in 2022, per S&P Global.

• Overall, business bankruptcies in U.S. courts rose to 22,762 in 2024, up 33% from 2023 and up 73% from 2022.
• Those numbers are less precise than they seem, since the default setting on most bankruptcy-filing software is "consumer" rather than "business" and many business filers don't check that box.
• Meanwhile, many large corporate bankruptcies involve simultaneous filings from hundreds of subsidiaries, which can result in the numbers being exaggerated.

Yes, but: The absolute number of bankruptcies is still low, even after the recent increases.

• In 1997, for instance, there were 54,252 business bankruptcy filings, and 6.1 million business establishments in the U.S., for a ratio of 0.9%.
• By 2024, that ratio had fallen to 0.3%.

The bottom line: When rates rise, they bite harder. But an economy with more bite isn't always a bad thing.

The world's CEOs are much more worried about global trade wars now that Donald Trump has been elected president than they were a year ago, according to a new survey from the Conference Board.

Why it matters: While no one knows exactly what tariffs the upcoming Trump administration is going to impose on which countries, the one certainty is that substantially all such tariffs will be met with retaliatory counter-tariffs. Or more simply: a trade war.

• As Axios noted on Monday, rapidly introduced tariffs could trigger speedy retaliation from major allies, including a broad-based 25% Canadian tariff on all U.S. imports.
• Such actions would make the 2018 trade war look minuscule.

Zoom out: The 2025 list of the top geopolitical worries also includes "foreign investment restrictions" and "greater risk of conflict in Asia-Pacific," both of which have risen sharply from their position last year.

The other side: Geopolitical worries don't seem to have dampened broader economic optimism.

• While 55% of U.S. CEOs said the risk of an economic downturn or recession was going to be a high-impact issue in 2024, that number has fallen to less than 40% in 2025.
• Similarly, the proportion of U.S. CEOs worried about high borrowing costs fell from 28% in 2024 to 16% in 2025.

Between the lines: As CEOs get more optimistic on the economy, a new Deloitte survey of North American CFOs shows a huge uptick in their risk appetite, too, since the election.

• 67% of CFOs say "now is a good time to take risks" — a six-year high.
• That figure is up from just 12% in the third quarter.

The bottom line: Global CEOs seem to have taken Baron Rothschild's admonition to heart: "The time to buy is when there's blood in the streets, even if the blood is your own."

Mark Zuckerberg moved further in the direction of MAGA on Monday, when he appointed three white men, including UFC chief executive and Trump friend Dana White, to the board of directors of Meta.

Why it matters: We're a long way from 2022, when Peter Thiel resigned from the same board in order to be able to support Trump-aligned candidates.

By the numbers: After Thiel's resignation, the Meta board was 44% female — five men and four women. Today, it's 23% female — 10 men and three women.

• In terms of corporate control, of course, only one vote matters. Thanks to his Class B shares, Zuckerberg will always have the final say.
• The company did not return a request for comment on the changes.

Between the lines: Seven of the 10 men — Marc Andreessen, John Arnold, John Elkann, Drew Houston, Hock Tan, Tony Xu, and Zuckerberg himself — are billionaires.

• White might not have reached the $1 billion mark quite yet, but he's well on his way.

Driving the news: The reinvention of Facebook can be seen in the departure of liberal Democrat Nick Clegg as the company's policy head, and his replacement by prominent Republican Joel Kaplan.

• It can also be seen in the $1 million that Meta donated to a Trump inauguration fund, a donation made by many other tech companies.

The bottom line: As Axios has reported, the fate of Big Tech over the next four years depends on who has Trump's ear at critical junctures.

• Zuckerberg seems to be doing everything he can to ensure that Meta is in exactly that position.

There is a broad-based desire to wrest Fannie Mae and Freddie Mac from federal control once Donald Trump takes office.

Why it matters: These two companies are the backbone of the U.S. housing market — together they support around 70% of U.S. mortgages.

• Messing with their structure poses risk to the economy, and at the very least could raise mortgage rates even further.

State of play: Last week, the Treasury Department and the Federal Housing Finance Agency, which oversees the two companies, released a roadmap for how privatization could work.

• In a sign that investors believe there's a real chance privatization could happen during Trump 2.0, stocks of government-sponsored enterprises (GSEs) jumped on the news.
• Mortgage Bankers Association chief lobbyist Bill Killmer told Axios it's highly likely that the issue will at least be examined during the new administration, following several other reports.
• Trump did not address the GSEs during the campaign or since his election. "No policy should be deemed official unless it comes directly from President Trump," Karoline Leavitt, spokeswoman for the transition, said in an email.

Reality check: This roadmap is a memo from a lame-duck administration, and the incoming Trump team could simply reverse it.

• But the idea was to put up some guardrails up so the incoming administration doesn't act too recklessly in getting rid of federal oversight, said Jim Parrott, who was a housing adviser in the Obama administration.
• He describes it as "a good governance move just to make sure that the new guys don't f--k things up too badly."

Zoom in: The roadmap lays out a process for privatization. It requires that the federal government gather public comment before making any moves and that Treasury be involved.

• But it doesn't go into the nitty-gritty details of how the process would work.

The big picture: Any such process would be pretty gnarly.

• Various policymakers and politicians have been trying to do it for years, without success. An effort during the first Trump administration fell short.

Flashback: Fannie Mae and Freddie Mac lost over $200 billion after the financial crisis hit in 2008 — vastly more than they had in cash.

• They were the epitome of "too big to fail," so the government bailed them out by lending them billions of dollars they found themselves unable to repay.
• Those debts were eventually restructured in a series of events that ended with the government owning 80% of the companies and having full rights to their profits, whether retained or paid out.
• Common shareholders are left with nothing.

Between the lines: Fannie and Freddie are now very profitable, which means they would be very valuable were they fully public companies where profits flowed to shareholders.

• However, such an action would involve Treasury giving up a valuable asset, while it's still owed an enormous amount of money.
• Its "liquidation preference" — money owed to Treasury after earnings were retained to beef up capital — is $212 billion from Fannie Mae alone.

What's next: Fannie and Freddie both exist to borrow money on the capital markets at a risk-free rate. They can do that at the moment because they are part of the government.

• As private companies, however, without a government guarantee, they would almost certainly lose their triple-A credit rating — and their debt would be considered risky for the purposes of calculating bank capital.
• Both things would make their borrowing costs rise substantially, cutting into their profits. Those higher borrowing costs would then flow through into higher mortgage rates for the general population.

Between the lines: Most housing experts, both liberals and conservatives, say the key to privatization is giving these entities an explicit guarantee of a federal backstop in case things go badly.

• In theory, a procedure called credit risk transfer can achieve this without leaving the government with a multitrillion-dollar contingent liability. In practice, that only increases the costs of GSEs even further.

The bottom line: No one has yet come up with a plan that extracts the GSEs from government control, repays Treasury what it's owed, makes sure the GSEs pose no systemic risk to the financial system, and prevents mortgage rates from rising.

• Probably because such a plan is all but impossible.

Read more: Bill Ackman gets back into activism

Filing a legal complaint is rapidly becoming the self-publishing option of choice for individuals looking to make explosive public allegations — regardless of whether they actually care about a judge finding in their favor.

Why it matters: In an era of steadily declining trust in media, the dry formalities of a legal template provide not only an imprimatur of institutional credibility, but also the freedom to go into extreme amounts of detail without seeming petty, tedious or self-indulgent.

Driving the news: Actress Blake Lively is in a war of legal filings with her co-star Justin Baldoni.

• Lively's complaint immediately changed her public reputation.
• As communications guru Lulu Cheng Meservey said on X: "What happens with the legal complaint from here? In my opinion, it doesn't even matter. She's won."
• Baldoni then filed his own lawsuit laying out his side of the story. It's framed as a defamation suit against the New York Times, but in practice fires back in the PR war with Lively. (The Times denied defaming Baldoni.)

Flashback: Similar tactics were employed by actress Sophie Turner, who fired off a legal complaint against her soon-to-be ex-husband that invoked international child abduction clauses through the Hague Convention.

• Legal filings have also been part of Drake's arsenal in his longstanding rivalry with Kendrick Lamar.
• Women have used lawsuits as a way to go public with accusations that powerful men — including Sean Combs and Leon Black — have committed sexual assault. (Both denied wrongdoing and neither were convicted of a crime, but the suits impacted both of their careers — and, in the case of Combs, helped land him in jail.)

When billionaire investor Bill Ackman wanted various Business Insider journalists and editors to be fired for publishing a story about his wife, he made public a 77-page letter from his lawyer, Elizbeth Locke.

• "The demand letter reads remarkably similarly to the pleadings of a lawsuit," Ackman noted on X. "If needed, we can convert the demand letter into a complaint and file a lawsuit."
• Ackman was clear that his end goal was to "end Business Insider's unethical and unprofessional practices" — which is not the kind of thing that can be forced by a judge in a court of law.
• Ackman demanded that then-Business Insider editor-in-chief Nicholas Carlson be fired — something that Mathias Döpfner, the CEO of BI's parent company, reportedly seriously considered.
• Carlson has since departed the company for other pursuits, taking BI founder Henry Blodget with him. John Cook, the editor of the contentious articles, also departed, for the Wall Street Journal.

Where it stands: The internet has given the power of the printing press to everyone — but for that very reason, self-published posts on X or Medium or a personal blog are often treated with a healthy degree of skepticism, and serious journalists often avoid reporting on them.

• By framing allegations in the form of a legal complaint, accusers give themselves an institutional imprimatur, much as Émile Zola did when he published "J'Accuse" on the front page of the newspaper L'Aurore.

The bottom line: Lawsuits are often used just as a way of inflicting expensive litigation on others. Now they're also being used to try to bring about outcomes no jurist can hand down in judgment.

If Donald Trump succeeds in significantly reducing the U.S. trade deficit with China, he'll do so against the force of history — and of market expectations.

Why it matters: By placing the trade deficit with China at the top of the list of things he wants to slash, Trump is facing off against trillions of dollars' worth of deeply entrenched global trade patterns.

By the numbers: The trade deficit with China — our imports minus our exports — has been larger than $200 billion since 2005. It reached a record high of $418 billion in 2018, Trump's second year in office.

The big picture: The U.S. imports an astonishing array of goods from China, and it exports very little in the other direction.

• The tariffs imposed on China during the first Trump administration, which were then kept in place by President Biden, did relatively little to change that dynamic.
• During Trump's first term, when imports fell, exports fell too, blunting the effect on the trade deficit.
• That pattern would likely be repeated if he follows through on his pledge to impose a 60% tariff on goods from China: Our exports would end up being similarly taxed in retaliation.

The bottom line: For the time being, the market seems to be reasonably sanguine when it comes to the threat of a trade war.

• Maybe that's because no such thing has happened in the lifetimes of today's traders, and maybe it's because the sheer force of money flowing between China and the U.S. seems impossible to significantly disrupt, whatever Trump might dream.