The Trump 2.0 era may have officially begun this week, but the much-hyped tariff-fueled trade war has not. At least, not yet.

In a wide-ranging session with reporters late Monday, the newly inaugurated Donald Trump threatened to levy 25% tariffs on Canadian and Mexican goods starting as soon as February 1, while saying that tariffs on China — potentially as high as 100% — could be tied to the potential sale of TikTok to a US entity. By Tuesday, world leaders and currency markets had plenty of time to respond to the trade war’s new tentative start date. Tentative being the operative word.

A New Taxation World Order

Trump wasted little time initiating parts of his policy plan via a flurry of executive orders hours after he was sworn into office. But he’s taking a slower tack to institute his trade policy. Instead of Day One import duties, Trump issued a memorandum to multiple federal agencies to evaluate US trade policy and report back by April 1 — which may or may not be in conflict with the February 1 start date he cited later in the evening. 

And that’s not all. Trump on Monday also outlined a series of new or increased taxes that could be levied on foreign companies and nationals operating in the US — in part as retaliation for allegedly unfair taxes levied on Americans in some jurisdictions abroad; he also issued another memo that withdraws the US from an OECD global tax pact agreed to last year that allowed foreign countries to levy “top-up” taxes on US multinational businesses. It’s a signal that tax law may be just as instrumental as tariffs, if not more so, in Trump’s international economic policy plan.

It’s been a lot for markets to process: 

• Trump’s penchant for policymaking from the hip has sent the US dollar into a frenzy; the USD fell against a basket of foreign currencies about 1% during the day Monday after Day One tariffs looked off the table, then rebounded in the evening, only to fall over 1% on Tuesday. “​​We basically got back to where we were, which means that there was no new information,” Geoff Yu, a market strategist at Bank of New York Mellon, told The Wall Street Journal.
• Canadian Prime Minister Justin Trudeau, meanwhile, threatened retaliatory tariffs on Tuesday — though he insisted “the facts bear out [current trade policy] is a win-win relationship.”

Shifting Gears: A senior European Union official told the Financial Times the focus on multinational taxes likely reflects the priorities of major American tech firms: “The conversation on tariffs will be transactional,” he said, “but the real fight will move to where fortunes are at stake and big tech has an interest.” Meanwhile, KPMG head of global tax strategy Grant Wardell-Johnson shared with the FT his view of the new tax fight: “Ultimately, we are seeing international taxation moving from a multilateral domain to a bilateral one based on strong unilateral assertions. It is a new taxation world.”

He wasn’t wearing a lizard-embossed jacket or making any grand pronouncements about the state of artificial general intelligence, but the CEO of Paris-based AI startup Mistral is making it clear he intends to run with the big boys. Though not too big, mind you. 

Speaking at Davos on Tuesday, Arthur Mensch said the company is not looking to be bought and that “the plan” is for the firm to, at some point, go public. Mistral is among a clutch of privately held AI startups like OpenAI and Anthropic that have seen valuations soar as bigger tech giants have thrown their weight (and funding) behind them. 

Public-Facing AI

There are plenty of AI-heavy public stocks on the market at the moment, perhaps the most notable being Nvidia. However, Nvidia is in the enviable position of providing all the hardware that AI-hungry companies need, and other big AI players like Microsoft and Alphabet are behemoths with multiple revenue streams.

For startups like Mistral, AI software is the only product on offer. Like OpenAI, Mistral has backing from Microsoft, and Anthropic has amassed $8 billion in funding from Amazon plus $3 billion from Google, Bloomberg reported Tuesday. In comparison to OpenAI and Anthropic, however, Mistral remains something petite:

• Sifted reported in June of last year that Mistral had closed a €468 million ($486 million) equity funding round at a €5.8 billion ($6 billion) valuation. In November of last year, Sifted also reported that Mistral has just over 100 employees, doubling headcount over a six-month period.
• The Wall Street Journal reported earlier this month that Anthropic was raising funds targeting a $60 billion valuation. In October, OpenAI announced it had completed a $6.6 billion fundraise, reaching a valuation of $157 billion.

Punching Above Your Weight: Ordinarily a two-year-old startup that has already hit a $6 billion valuation wouldn’t be able to play the underdog card, but this is the funhouse mirror world of AI company valuations. In this sense, an IPO for Mistral might carry less risk than the mega-valued Anthropic or OpenAI, whose enormous valuations would be exposed to the whims of public investors. 

No need to accept that LinkedIn DM from a headhunter. You just got promoted.

That was the cheery message for a select few at Goldman Sachs on Tuesday. The toast of Wall Street elevated a new generation of executives to run its investment banking and trading operations, ostensibly to capitalize on an expected boom in equities and deals under President Donald Trump. The move was also clearly designed to block rivals from raiding Goldman’s top talent.

Keeping Everyone Happy

The highly competitive culture at Goldman — internally as much as externally — means the bank’s most gifted staff expect career advancement. And last week, the bank signalled its most senior leaders aren’t going anywhere any time soon.

Goldman handed CEO David Solomon and president John Waldron $80 million retention deals and debuted a new compensation plan that will top up the top brass with a cut of the firm’s lucrative alternative asset funds — in a filing, Goldman’s board hailed the chance to earn carried interest as a benefit normally associated with private equity firms. The other shoe to drop, naturally, was how to keep the ascendant talent on board:

• Goldman tapped new global co-heads for its equities, fixed income and banking businesses, and reorganized its international division. All told, 15 people were elevated to the bank’s high-ranking management committee, expanding its ranks to 39.
• Goldman’s board acknowledged in its filing last week the risk of non-traditional competitors like alternative asset managers raiding its ranks — Citadel Securities and Sixth Street are among those who have poached Goldman talent in recent years. There’s also another dimension to the risk: Solomon and the bank’s senior leaders have been trying for the past year to make younger generations of partners feel as though they are still climbing the ranks.

Those who won promotions can’t complain that they’re not being handed real responsibility. Goldman’s global banking and markets business, where many of the changes announced will take place, rakes in two-thirds of the bank’s net revenue. Investment banking fees, in particular, rose 24% year-over-year in the fourth quarter to $2.1 billion as deal activity continued to rebound.

Bank On This: Headhunters targeting their offer sheets to top talent will remain a fact of life for arguably Wall Street’s most fabled firm. But Goldman has plenty to offer current or aspiring partners with its recent performance alone — fourth-quarter profits more than doubled year-over-year to $4.1 billion, and the bank’s stock price has rallied 66% in the past 12 months.