Good morning. The EU pushes back against Trump’s latest tariff move. Hedge funds are pocketing a big chunk of their clients’ gains. And LA loves Luka Doncic. Listen to the day’s top stories.

Aluminum coils at the Arconic manufacturing facility in Alcoa, Tennessee. Photographer: Luke Sharrett/Bloomberg

Donald Trump warned that tariffs on steel and aluminum “may go higher” after imposing a 25% levy on all imports of the metals from next month. The European Union was quick to respond, vowing to take “firm and proportionate” countermeasures. While he didn’t include exemptions for trading partners, Trump said he may consider a break for Australia.

The tariff plan probably won’t arrest decades of declining market share and stagnating metals production in the US. Despite the levies imposed during Trump’s first-term in 2018, steel output has continued to fall, and the industry still struggles to compete with Chinese rivals. Read our explainer on why Trump wants higher tariffs on the metals.

Stocks struggled for direction as the latest tariff news spurred caution among traders. They’re looking ahead more to testimony from Federal Reserve Chair Jerome Powell and to key US inflation data this week.

Trade wars, tariff threats and logistics shocks are upending businesses and spreading volatility. Understand the new order of global commerce with the Supply Lines newsletter.

Gaza latest: Israel should call off its ceasefire deal with Hamas if hostages aren’t returned this weekend, Trump said. Today, the president will meet with Jordan’s King Abdullah II, who’s expected to deliver a message from the Arab world that Trump needs to rethink his proposal for a Gaza “riviera.” Read our explainer on why Trump’s Gaza takeover proposal has many obstacles.

Corporate news: Activist investor Elliott has built a more than $2.5 billion stake in oil refiner Phillips 66, and plans to push the company to sell or spin off its midstream business, according to a person familiar with the matter. And Stripe is said to be in talks to arrange sales of shares by employees at an $85 billion valuation.

Deep Dive: Strong January for Tiger Cubs

Tech-focused hedge funds helmed by proteges of the late Julian Robertson (they’re known as “tiger cubs”) shrugged off tariff threats and DeepSeek gyrations to beat the broader equity markets.

• Tiger Global Management, Coatue Management and Whale Rock Capital were among the winners. The gains were driven in part by the surge in Meta shares. That offset losses from Nvidia, which took a hit after DeepSeek rolled out a cheap AI model.
• Speaking of DeepSeek, Chinese electric vehicle maker BYD plans to integrate software from the startup in its cars.
  

The Big Take

Sticking with the hedge fund narrative, a Bloomberg analysis of regulatory filings shows the big firms are charging expenses on anything they deem reasonable. Known as passthrough fees, they can include anything from employee gifts to the cost of booking a private jet.

Opinion

Investors are worried that Trump is serious this time about making tariffs stick, John Authers writes. Though it’s not clear whether the move on steel and aluminum is anything more than brinkmanship, traders in the US rushed to stockpile before tariffs take effect.

Before You Go

Luka Doncic, centre, and LeBron James, left, during the game against the Utah Jazz. Photographer: Ronald Martinez/Getty Images North America

Luka Doncic made a brief and successful debut for the Los Angeles Lakers in a 132-113 win over the Utah Jazz. The former Mavericks star confessed to being a little nervous before the game, the AP reported, but quickly connected with LeBron James, received standing ovations from fans and donated $500,000 to fire recovery efforts in his new community.

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