President Donald Trump's made-in-America drive faces one big problem-factory jobs returning to the U.S. from China might be filled by robots.
While U.S. tariff plans aren't clear ahead of Wednesday's big reveal on so-called Liberation Day, the goal is to bring manufacturing back to the U.S. The effective tariff rate has already increased from 2.5% to 9%, the highest since World War II, according to UBS.
In exchange for short-term pain, the Trump administration has touted the job creation linked to investment announcements from the likes of Hyundai and Taiwan Semiconductor Manufacturing.
However, listen to executives and they're planning for much of that work to be done by robots. Trump's close ally Tesla CEO Elon Musk recently predicted that by 2040 robots will outnumber humans.
A Tesla-made Optimus humanoid servant in every home might be a stretch but AI looks set to turbocharge industrial automation. Hyundai's $21 billion investment in U.S. manufacturing includes a recently opened factory in Georgia where robotic dogs perform quality inspections and the company noted automation is nearly double the level of its existing facilities.
That doesn't mean there won't be opportunities for American workers -- Hyundai said it would create 14,000 new direct full-time jobs in the U.S. by 2028. But that has to be weighed against the cost of tariffs. Alcoa has estimated the 25% levy on aluminum imports will result in the loss of about 20,000 direct U.S. industry jobs.
A new wave of tariffs will spur efforts to cut costs. Liberation Day might be remembered as the time America opened the workplace doors for the robots to take over.
-- Adam Clark
***
Intel's New CEO Warns a Turnaround 'Won't Be Easy'
Turnarounds are tough and Intel's new CEO Lip-Bu Tan used his first public speech since taking the helm at the chip maker from Pat Gelsinger to try to manage expectations.
-- "I fully recognize it won't be easy," Tan said Monday during his keynote
address at the Intel Vision conference in Las Vegas. "It won't happen
overnight."
-- Tan said he plans to change the culture to be more team-oriented and
innovative, while strengthening the balance sheet and cutting down on
bureaucracy, but didn't offer specific details about his strategy.
-- Last week, Tan told Intel investors that he intends to develop
"rack-scale" artificial intelligence server systems in an attempt to
compete with Nvidia in AI hardware.
-- In other AI-related news, the Japanese investment firm SoftBank has
agreed to lead a $40 billion funding for OpenAI, valuing the ChatGPT
maker at $300 billion, according to The Wall Street Journal.
What's Next: Tan is hoping that under his leadership, Intel's AI business can get back on track. The market initially had a positive reaction to his appointment, but Tan has a lot of work to do to turn the company around and create value for shareholders -- including cutting costs and improving its loss-making chip-manufacturing business.
-- Tae Kim and Elsa Ohlen
***
Elections Give Early Read of Voters in President's Second Term
Today's elections in Florida and Wisconsin are an early referendum on the popularity of President Donald Trump's blitz of tariffs, federal worker layoffs, and deportations. But even if Republicans underperform, it might not be enough to prompt a policy reset.
-- Two special elections in Florida will determine whether Republicans can
expand their 218-213 House majority. More breathing room there would make
it easier for the GOP to pass tax increases, budget cuts, and other Trump
priorities on a party-line vote, even if a handful of Republican
lawmakers rebel.
-- The Florida races, and one to fill a Wisconsin State Supreme Court seat,
could be a reality check to Republicans and Democrats on the popularity
of Trump's early accomplishments and what that might mean for the 2026
midterm elections. Stakes are high for Tesla CEO Elon Musk.
-- The billionaire has attempted to save billions of dollars by firing tens
of thousands of federal employees and cutting federal contracts in a way
that some judges say likely violated the law. If voters rebel against
Musk's Department of Government Efficiency, GOP lawmakers could pressure
Trump to slow the effort.
-- Musk has been throwing money at the races. He gave out $1 million checks
to two Wisconsin voters during a town hall on Sunday and he and groups he
supports have spent more than $20 million in that race. Musk's America
PAC has also spent money in Florida's special elections.
What's Next: Even if Republicans do underachieve today, that might not be enough to get Trump to pull back, said Beacon Policy Advisors managing partner Stephen Myrow. He predicted that the economy will likely have to get much worse before congressional Republicans start to push back on DOGE.
-- Joe Light
***
Top Wall Street Biotech Analysts Demand Action on RFK
Two top Wall Street analysts, notable because they are at the same firm once run by current Commerce Secretary Howard Lutnick, are calling on the White House to remove Health and Human Services Secretary Robert F. Kennedy Jr. from the job, saying he is "undermining public health."
-- The new research note from Cantor Fitzgerald biotechnology analysts Josh
Schimmer and Eric Schmidt was spurred by Friday's surprise resignation of
Dr. Peter Marks, a top Food and Drug Administration official responsible
for regulating vaccines. An HHS spokesperson had no comment on the note.
-- The analysts said the forced departure of Marks, who led the FDA's Center
for Biologics Evaluation and Research, had been a "step too far for us."
In the unusually forceful note, they said Kennedy was undermining
healthcare. "HHS cannot be led by an anti-vax, conspiracy theorist with
inadequate training."
-- In his resignation letter, Marks said that he had been willing to address
Kennedy's concerns about vaccine safety but he said Kennedy, a prominent
vaccine skeptic, appeared ready to use his role at HHS to promote vaccine
skepticism. The Cantor analysts said drugmakers needed to speak out
against Kennedy.
-- Lutnick was CEO of Cantor until joining the Trump administration. Other
analyst notes Monday voiced varying degrees of alarm about Marks, but
most focused on near-term impacts on stocks. Moderna stock tumbled nearly
9% and Sarepta Therapeutics dropped more than 9%.
What's Next: John Crowley, the president and CEO of biotech industry group BIO said after Marks' departure that his group was concerned that the "loss of experienced leadership at the FDA will erode scientific standards" and affect the development of new drugs.
-- Josh Nathan-Kazis
***
Gold Posts Best Quarter Since Mid-1980s Ahead of More Tariffs
Gold, a traditional safe haven for risk-averse investors, reached record levels, with futures notching their best quarter since 1986. Tariff uncertainty is a likely reason for futures rising 19% for the quarter, as President Donald Trump prepares to announce a broad slate of import levies, with no exemptions.
-- The most active Gold futures settled at $3150.30 on Monday. It has hit 18
closing highs so far in 2025. That has lifted everything from stocks of
gold miners, as measured by the VanEck Gold Miners ETF, and spurred
consumer demand for gold bars sold by retailers such as Costco.
-- Trump is expected to unveil his tariff plans on Wednesday, an event the
White House press secretary said would be the administration's first Rose
Garden ceremony. "It's time for reciprocity and it's time for a president
to take historic change," Karoline Leavitt, the spokesperson, said. She
confirmed no exemptions.
-- Gold demand also is coming from central banks of countries such as China,
which are buying up the yellow metal to lower their exposure to the U.S.
dollar -- and the potential arm-twisting that comes with it -- after the
freezing of Russian central bank assets.
-- Gold has been in a bull market since September 2022, meaning it could be
overvalued and vulnerable to corrections if early investors sell to lock
in profits. That raises the prospect that higher predictions for gold are
simply chasing the asset's price momentum.
What's Next: Still, analysts have been raising their outlooks. Goldman Sachs expects gold to reach $3,300 an ounce by the end of the year, citing strong central bank demand and money flowing into exchange-traded funds. Morgan Stanley's Amy Gower expects gold to rise to $3,300 to $3,400.
-- Karishma Vanjani and Janet H. Cho
***
Rocket Extends Deal Spree to Build Comprehensive Housing Platform
Rocket Cos. extended its deal spree with a $9.4 billion acquisition of Mr. Cooper Group, the largest U.S. mortgage servicer. The combination would create a behemoth that would service about one in every six U.S. mortgages, furthering Rocket's drive to reshape how people finance, buy, and sell property.
-- Rocket CEO Varun Krishna said the company wants to be a single platform
with lending in the middle. Earlier in March it reached a deal that
valued the online listing portal and brokerage Redfin at about $1.75
billion. Rocket is one of the biggest originators, a business once
dominated by banks.
-- Rocket and Mr. Cooper broadly occupy different parts of the same playing
field when it comes to home loans. Rocket in 2024 derived the largest
chunk of its $5.1 billion revenue from selling its loans, while Mr.
Cooper earned much of its $2.2 billion from loan servicing.
-- After the acquisition, Rocket will service $2.1 trillion worth of
mortgages across roughly 10 million borrowers, including nearly 7 million
Mr. Cooper's clients. The transaction would immediately boost Rocket's
adjusted earnings and generate $100 million in additional pretax revenue,
Rocket said.
-- The mortgage business has seen more consolidation as mortgage rates have
more than doubled, home prices soared to record highs, and home sales
plunged to a 30-year low last year. Everybody is pursuing "the holy
grail" of digital closing, Tomasz Piskorski, a Columbia Business School
professor of real estate, told MarketWatch.
What's Next: Rocket was already expanding in servicing and this deal helps accelerate that. It would triple Rocket's proprietary data, Krishna said. Servicing could also provide more insulation for Rocket when times are tough for home loan origination.
-- Shaina Mishkin and Janet H. Cho
***
-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Rupert Steiner
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 01, 2025 07:13 ET (11:13 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments