In a last-minute “JK,” the US postponed blanket 25% tariffs on imports from Mexico and Canada yesterday, shortly before they were set to go into effect.

Mexico got its break after President Claudia Sheinbaum and Trump connected yesterday morning and reached an agreement pending a further deal. Mexico will send 10,000 troops to the US border to help stop northbound undocumented migrants and fentanyl contraband, and Trump will crack down on the smuggling of weapons into Mexico, according to Sheinbaum.

Later in the day, Canadian Prime Minister Justin Trudeau said that the planned tariffs on goods from his country would also be paused for 30 days, after a phone call with Trump. Trudeau agreed to strengthen border security, appoint a fentanyl czar, and increase anti-crime cooperation with the US through the creation of a joint strike force.

Neighbor trade war avoided (for now)

Though many US business groups opposed the tariffs and economists said Americans would’ve faced higher prices—particularly for cars and fuel—Canadian and Mexican producers stood to lose the most as around 75% and 80% of their exports respectively are US-bound. To give Americans a taste of their own medicine, Canada was prepping its own 25% tariffs on $106 billion of US imports and appealing to maple-leaf patriotism by urging citizens to switch to Canada-made products. Mexico also said it was ready to impose tariffs on US goods.

Yesterday's phone diplomacy looks like an example straight out of a Trumponomics textbook of how to treat tariff threats as a bargaining chip. But a looming trade war between the US and its friendly neighbors—which even had Canadians abandoning politeness—shows that economic ties can’t be taken for granted no matter how tight they seem, according to Axios.

Meanwhile…A 10% import duty on Chinese imports that President Donald Trump ordered did kick in today. China has said it will dispute the tariffs with the World Trade Organization, but it has also signaled a willingness to negotiate—and Trump said yesterday he planned to speak with China within 24 hours.

Big picture: As Trump flexes the US’ economic muscles, America’s allies and adversaries around the globe are making a flurry of trade deals among themselves, per the New York Times. —SK

Trump orders the creation of a sovereign wealth fund. President Donald Trump signed an executive order directing the Treasury and Commerce Departments to create the nation’s first-ever sovereign wealth fund—something he hinted could be used to buy TikTok. These government investment vehicles are more typical in countries with budget surpluses (unlike the US which tends to have a deficit), and the order didn’t specify where the fund would get money from, although Trump has previously said it could be “tariffs and other intelligent things.”

CFPB told to halt work as Treasury sec takes over. Treasury Secretary Scott Bessent was appointed the acting director of the Consumer Financial Protection Bureau after President Trump fired the head of the financial watchdog agency created in the wake of the 2008 crisis. Bessent got right to work implementing the latest signature Trump administration pause, telling the agency’s staff to stop all work on enforcement, litigation, and new rules pending review.

Vanguard slashes fees. The asset management giant announced it had lowered fees by an average 20% on 87 mutual funds and ETFs, a move it says will save investors ~$350 million this year. The reduction is the largest in the firm’s history, putting its average asset-weighted fee at 0.07%, while it’s at 0.44% for the rest of the industry, per Bloomberg. It’s the first major action by Vanguard’s new CEO Salim Ramji, who took over six months ago. He told the Wall Street Journal the firm was able to cut the fees because it had taken in so much new money from clients last year.—AR

USAID—an independent government organization that provides life-saving foreign aid to other countries—is holding on by a thread after Elon Musk and President Donald Trump agreed to shut it down. However, Secretary of State Marco Rubio, who stepped in as the agency’s acting administrator yesterday, suggested he’d work with Congress to overhaul USAID instead of shuttering it completely.

USAID, in a nutshell, managed roughly $40 billion in fiscal year 2023, less than 1% of the federal budget. It’s been around since 1961, and a large portion of its funding goes to humanitarian efforts in Ukraine and health initiatives in sub-Saharan Africa, including programs that distribute life-saving HIV treatments.

But now that aid’s future, and that of USAID’s 10,000 employees and numerous international contractors are in doubt.

• Through the Department of Government Efficiency, Musk forced a leadership change and shut staffers out of the agency’s office while railing against USAID on social media.
• Yesterday afternoon, over 100 USAID employees protested outside of its headquarters in Washington and were joined by Democratic lawmakers.

Zoom out: Musk’s aggressive moves to shutter the agency—something experts say requires an act of Congress—have raised questions about the power the world’s richest man has been handed by Trump to overhaul the federal workforce.—CC

Post-game analysis of Chick-fil-A's chicken-serving has helped the Atlanta-based company speed up its drive-thrus and log more revenue per restaurant than any other fast food joint in the US, the Wall Street Journal reported over the weekend.

Beating out McD’s per-restaurant stats, Chick-fil-A did ~$21.6 billion in sales across ~3,000 US restaurants in 2023, according to QSR Magazine. Per WSJ, car-centric franchises are carrying the herd:

• One Rockford, Illinois location boosted its drive-thru sales by 50% in 2022 after enlisting the help of Chick-fil-A’s Film Studies unit—a team of drone pilots that provides franchisees with aerial footage used to fix slowdowns in drive-thru lanes.
• A new Atlanta franchise that opened last year doesn’t even have a dining area—just a second-floor kitchen and four drive-thru lanes that can serve ~700 cars per hour.
• Food orders at the drive-up window accounted for about 60% of Chick-fil-A’s revenue last year.

Everybody wants to eat in their car: About 43% of fast food orders in the US overall happen at the drive-thru window, and 27% of those meals are downed before exiting the vehicle, according to Circana. That’s probably why McDonald’s is testing out a new Sonic-esque restaurant, CosMc’s, while Chipotle and Shake Shack are adding more drive-up lanes, per WSJ.—ML

With Mark Zuckerberg’s recent fascination with “masculine energy” and gold chains dominating chatter about the Meta CEO, it can be hard to remember his longer-running, much nerdier obsession with making tech you’re willing to wear on your face. But, even as he pushes for efficiency, Zuck is still willing to spend big to make that dream a (non-virtual) reality: Meta’s total investment in VR and AR smart glasses is on track to exceed $100 billion this year, per the Financial Times.

FT estimates that Meta has sunk $80 billion into AR and VR development since it bought Oculus in 2014, investing $19.9 billion into its Reality Labs division last year alone. The division is expected to get another $20+ billion this year. And while Zuckerberg may never convince the rest of us to hang with his avatar in the metaverse, at least these investments might finally be starting to pay off. In 2024, Meta sold 1 million pairs of its Ray-Ban smart glasses—a product Zuckerberg described as “a real hit,” FT reports. In the long run, Meta hopes that dominating smart eyewear will make the company less reliant on reaching users via other companies’ hardware.—AR