Taking on Trump

Good morning. Canada gets a new leader who says he’s ready to take on Donald Trump. Trade tensions weigh on US assets. And Josh Allen proves he really is MVP. Listen to the day’s top stories.

Mark Carney won the race to become Canada’s next prime minister, putting a former central banker who’s never held a seat in Parliament in charge of the country just as Donald Trump’s administration threatens its economic future. The transfer of power from Justin Trudeau is expected within days, and it’s possible Carney will call a national election soon. He kicked off by warning that Canada will keep in place its retaliatory tariffs against US-made products. Click here for the highlights from his victory speech.

The US economic outlook isn’t looking so hot either. Trump told Fox News that the economy faces “a period of transition,” deflecting concerns about the risks of a slowdown. US government bond markets are signaling traders expect the Federal Reserve will have to cut interest rates to boost activity. “The market’s gone from exuberance about growth to absolute despair,” TD Securities warned. Amid all the turmoil, here’s what big money managers based outside the US are doing with their cash.

There’s no letup in trade tensions. Chinese tariffs as high as 15% will hit a range of US agricultural goods today as Beijing tries to protect its own economy amid signs of deflation. That’s as US Commerce Secretary Howard Lutnick signaled he doesn’t expect a reprieve on 25% levies for steel and aluminum imports scheduled to take effect on Wednesday. But Mexico’s President Claudia Sheinbaum said she’s confident Trump won’t impose reciprocal tariffs on her nation’s exports next month. (Good news for Kendall Jenner...)

There was some signs of thawing in the US’s relations with Ukraine as Trump largely lifted a freeze on intelligence sharing with Kyiv. He also said he expects Ukraine’s President Volodymyr Zelenskiy to come around on a minerals deal—although he accused him of “taking candy from a baby” in maximizing US military aid. And Elon Musk threw his weight behind a US exit from NATO, arguing it “doesn’t make sense for America to pay for the defense of Europe.”

TikTok… A sale of the social platform’s US business may come “soon,” according to Trump. He said he’s negotiating with four different buyers to seal a deal and remove the app from Chinese ownership. As for China’s consumers, they’re growing less keen on one American brand close to the White House: Tesla. It’s rapidly backsliding in the world’s biggest and most advanced EV market, losing out to homegrown upstart BYD.

Deep Dive: China Goes All In on AI

Children are the future…of China’s AI ambitions. Beijing will introduce artificial intelligence courses to primary and secondary schools to further the country’s goal of dominating a sector that the US previously ruled.

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The Big Take

Opinion

There’s never been a better time to be anti-American, and it’s not just anti-Trumpism, Adrian Wooldridge writes. The current antagonism risks immense damage to the country’s long-term interests and it will take many years to regain the trust of the free world.

Before You Go

Big bucks for the big guys. Bills quarterback and NFL MVP Josh Allen got a massive raise to keep him at Buffalo until 2030. He signed a six-year deal worth $330 million, of which $250 million is guaranteed, the AP reported. Meanwhile, star Jets receiver Davante Adams is heading to the Rams on a two-year contract. And among those topping the list of available free agents this week: Josh Sweat and Milton Williams, both Super Bowl winners with the Eagles.

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