- In today’s CEO Daily: Diane Brady on Commerce Secretary Howard Lutnick and the Canadian reaction to trade tariffs.
- The big story: Worst-case scenario for Ukraine, best-case scenario for Russia.
- The markets: Indexes are tanking globally as Trump's tariffs come into effect.
- Analyst notes from JP Morgan on the U.S. economy, Saxo on European defense stocks, Convera on Trump, and Wedbush on Palantir.
- Plus: All the news and watercooler chat from Fortune.
Good morning. Here we go again. CEOs everywhere are on edge this morning as the U.S. vowed to impose 25% tariffs today on its closest trading partners. I spoke to dozens of leaders last month to see how they’re navigating the uncertainty.
My efforts to reach Commerce Secretary Howard Lutnick went unanswered. I had perhaps naively hoped we could talk — I’ve interviewed him over the years in other contexts and have a lot of respect for him as an entrepreneur, leader, and philanthropist in supporting victims of 9/11. Meanwhile, my colleagues and I were unable to load the Commerce Department’s website yesterday, as it repeatedly generated an “error 503/service unavailable” message. This on a day when so many business leaders are desperately seeking guidance on critical policy changes.
As a dual citizen who started my career in Toronto, I know that Canada’s fortunes are historically linked to the U.S. but the dependency is mutual. Canada is America’s largest export market and its second-largest trading partner, with highly integrated supply chains in areas like autos and energy. The Kaplan Group points out that U.S. companies have 83% exposure to Canada in the business of lead products, which means tariffs could add significant costs to batteries, construction materials, and electronic components. That’s just one example.
I’ll bring you insights from leaders in Mexico in the coming weeks. On the issues being used to justify tariffs, though, Canada and Mexico are not equally culpable. U.S. Customs and Border Protection agents seized 43 pounds of fentanyl crossing the Canadian border last year, compared with 22,000 pounds coming from Mexico. They arrested 24,000 illegal immigrants crossing from the north vs. more than 2 million people from the south.
Lutnick did tell Fox News that “both Mexico and Canada have done a reasonable job on the border,” which infuriated one Canadian CEO I spoke to yesterday. “This game of chicken has to stop,” he told me, noting that he’s already trying to reduce his exposure to the U.S. as much as he can, regardless of whether there’s yet another last-minute reprieve on tariffs. “I don’t know why this administration is so hell-bent on sabotaging its own economy.”
By the time you read this, the tariffs may be delayed once again — bringing relief and continued uncertainty. Add in anger, as a growing number of Canadians are now refusing to buy U.S. products and travel south of the border because of the sudden hostility against their country, which this administration also wants to annex as a 51st state. With Wall Street now worried about the health of the U.S. economy, let’s hope Washington can back away from tariffs and focus on shared wins.
More news below.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
