Did a Wine Importer Just Sink Trump's Trade War?
Featuring Jeanna Smialek
Produced by Olivia NattAlex Stern and Jessica Cheung
Edited by Marc Georges and Paige Cowett
Original music by Rowan Niemisto
Engineered by Alyssa Moxley
A panel of federal judges ruled on Wednesday that many of President Trump's tariffs were illegal, a decision that has threatened to derail his trade agenda.
Victor Schwartz, the wine importer at the center of the case, explains why he decided to take on the president, and Jeanna Smialek, the Brussels bureau chief for The Times, discusses what options Mr. Trump has to save his trade war.
Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.
Victor Schwartz, a small wine importer and the lead plaintiff in a lawsuit against Mr. Trump's tariffs.
Jeanna Smialek, the Brussels bureau chief for The New York Times.
The U.S. Court of International Trade said Mr. Trump had overstepped his authority in imposing his 'reciprocal' tariffs globally.
An appeals court spared the tariffs while it considered the challenge.
From March: Wine businesses were struck with fears of disaster under the threat of huge tariffs.
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The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, M.J. Davis Lin, Dan Powell, Sydney Harper, Michael Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, Nina Feldman, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Sophia Lanman, Shannon M. Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Olivia Natt, Daniel Ramirez, Brendan Klinkenberg, Chris Haxel, Maria Byrne, Anna Foley and Caitlin O'Keefe.
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Forbes
a few seconds ago
- Forbes
Intel Stock To $60?
Intel stock (NASDAQ: INTC) surged nearly 7% on Tuesday after reports that the Trump administration could take a 10% stake in the company by converting CHIPS Act grants into equity. Moreover, Japan's SoftBank also revealed a $2 billion investment it had made betting on Intel's revival. So could this finally be the catalyst Intel stock needs to drive a rally? In this analysis, we outline the key trends and numbers, namely revenues, margins, and valuation multiples that could line up to take Intel stock toward $60 per share. A potential 2x plus move might sound far-fetched, but remember the stock traded around these levels just about three years ago. Granted, Intel isn't TSMC when it comes to manufacturing tech, and it isn't a scratch on Nvidia when it comes to high performance chip design. But it is the largest U.S. fab - and in an era where Washington is prioritizing self-sufficiency in semiconductors, that has real value. Yes, Intel has been weighed down by PC market weakness, share losses to AMD, repeated manufacturing stumbles, and the AI shift toward GPUs. Yet with government backing, a domestic manufacturing edge, and a turnaround plan in motion, Intel stock has real levers that could drive a rebound. That said, if you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception. Intel Revenue Recovery Intel's sales have faltered of late. Intel revenues declined from $79 billion in 2021 to $53 billion in 2024 as Intel's CPU sales declined due to the cooling off of the PC market post-Covid-19, and also due to market share gains by rival AMD. The rise in mobile devices and increasing demand for AI chips - areas where Intel has a limited presence - have also hurt. While the PC market is recovering with sales projected to grow by low single-digits this year, consensus estimates project a 2% dip in sales for Intel this year to about $52 billion. That said, there are a couple of trends that could drive a reversal. Foundry business upside: There are increasing signs that Intel's foundry bet isn't taking off the way the company had expected. The foundry business lost nearly $13 billion last year. However, the market for foundry services is actually booming. Taiwan's TSMC - the world's largest foundry player - sees its AI-related chip revenue doubling in 2025 and rising at a mid-40% levels over the next five years. Intel, meanwhile, has captured little of this surge. But unlike rivals that rely heavily on Asian fabs, Intel still operates substantial U.S. manufacturing capacity, making it the only realistic domestic player to drive Washington's push to re-shore semiconductor production as a national security priority. Trump wants domestic semiconductor production, and Intel already has it in spades. Building this capacity from scratch takes years. With the right policy tweaks, Trump could tilt the playing field toward Intel. See How Intel's 2nm node compares with TSMC It's not like Intel hasn't been innovating either. Intel says that its new 18A process will offer higher performance and lower power consumption compared to TSMC's competing node. Still, TSMC's chips are expected to lead in terms of density and cost, and TSMC has been much more efficient at manufacturing its chips. Currently, most of Intel's publicly announced foundry wins have come from non-traditional semiconductor players such as Amazon, Microsoft, and MediaTek. As Intel's tech continues to get better, companies like Apple and Nvidia might even feel obligated to use Intel's services to stay in the administration's good graces. More competitive chips: Intel's latest CPUs are also seeing better reviews. Preliminary benchmarks from PassMark show that Intel's new Arrow Lake-based Core Ultra 9 chip outperforms AMD's competing Ryzen 9 processor by about 7% in CPU benchmarks. Additionally, it is 34% faster than the previous generation i9-14900HX, with single-thread performance improving by 9%. Unlike Intel's AI-focused Lunar Lake chips, these new processors prioritize raw performance for demanding productivity and creative workloads. Over the past two years or so, companies have likely under-invested in traditional CPU-based computing while aggressively securing GPUs, driven by FOMO, or the "fear of missing out" on securing the compute capacity needed for AI deployment. As CPU-related spending potentially rebounds, Intel might be better-positioned to benefit after years of market share losses in both the client and server markets. The broader recovery of the PC market, coupled with stronger products, is likely to help Intel boost its revenue. Intel is also doubling down on the AI processor space with its Gaudi 2 and upcoming Gaudi 3 AI accelerators and this could also provide the company with some incremental upside. If Intel can see a revenue rebound, with sales growing by about 7% annually between 2025 and 2028, revenues could grow from $52 billion in 2025 to about $64 billion. Intel's Margins Have Room For Expansion Intel's adjusted net margins (net income, or profits after expenses and taxes, calculated as a percent of revenues) have been on a declining trajectory - they fell from levels of around 29% in 2021 (and the years before that) to just about 8.5% in 2023 due to sales declines and considerable losses in the foundry business. The metric fell to negative levels in 2024 as Intel posted losses. That being said, multiple trends point to a recovery. Firstly, Intel has been looking to cut costs considerably. Intel's 2024-2025 cost-cutting plan includes reducing $1.5 billion in operating expenses while laying off roughly 25,000 employees (approximately 23% of its workforce). Moreover, as Intel's next-generation manufacturing technology matures, utilization rates of its production facilities could improve, via more in-house manufacturing of Intel's latest chips and fabrication for third parties. Separately, more competitive CPU products might also drive up Intel's pricing power and margins. It's not hard to imagine margins recovering to about 20% by 2028. How Does This Impact Intel's Valuation? Now at the current market price of close to $25 per share, Intel trades at about 200x estimated 2025 earnings and about 37x consensus 2026 earnings. If we combine the scenario we detailed above - which assumes revenue growth of roughly 1.23x between 2025 and 2028 to about $64 billion, with margins growing from negative levels in 2024 to about 20% in 2028, this would mean that adjusted net income could grow to almost $13 billion. Good times make it easier to imagine even better times - and when that happens, investors could begin to see Intel in a more favorable light, re-assessing Intel's recovery path. For example, if Intel's investors assign it an earnings multiple of 20x following its stronger growth trajectory, this could translate into a stock price approaching $60 per share by the end of 2028, assuming earnings of $13 billion or about $2.95 per share. What about the time horizon for this positive-return scenario? While our example illustrates this for a 2028 timeline, in practice, it won't make much difference whether it takes three years or four. If the turnaround takes hold, with Intel improving its key metrics, we could see meaningful gains in the stock. This is a storied company with a glorious past and valuable know-how in a growing market. Our analysis suggests that a win could be at hand - it just may not be very quick, and may require patience. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 - S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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Trump thinks owning a piece of Intel would be a good deal for the US
SAN FRANCISCO -- President Donald Trump wants the U.S. government to own a piece of Intel, less than two weeks after demanding the Silicon Valley pioneer dump the CEO that was hired to turn around the slumping chipmaker. If the goal is realized, the investment would deepen the Trump administration's involvement in the computer industry as the president ramps up the pressure for more U.S. companies to manufacture products domestically instead of relying on overseas suppliers. The Trump administration is in talks to secure a 10% stake in Intel in exchange for converting government grants that were pledged to Intel under President Joe Biden. If the deal is completed, the U.S. government would become one of Intel's largest shareholders and blur the traditional lines separating the public sector and private sector in a country that remains the world's largest economy. In his second term, Trump has been leveraging his power to reprogram the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are helping to power the craze around artificial intelligence, to pay a 15% commission on their sales of chips in China in exchange for export licenses. Trump's interest in Intel is also being driven by his desire to boost chip production in the U.S., which has been a focal point of the trade war that he has been waging throughout the world. By lessening the country's dependence on chips manufactured overseas, the president believes the U.S. will be better positioned to maintain its technological lead on China in the race to create artificial intelligence. That's what the president said August 7 in an unequivocal post calling for Intel CEO Lip-Bu Tan to resign less than five months after the Santa Clara, California, company hired him. The demand was triggered by reports raising national security concerns about Tan's past investments in Chinese tech companies while he was a venture capitalist. But Trump backed off after Tan professed his allegiance to the U.S. in a public letter to Intel employees and went to the White House to meet with the president, who applauded the Intel CEO for having an 'amazing story.' The company isn't commenting about the possibility of the U.S. government becoming a major shareholder, but Intel may have little choice because it is currently dealing from a position of weakness. After enjoying decades of growth while its processors powered the personal computer boom, the company fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone's 2007 debut. Intel has fallen even farther behind in recent years during an artificial intelligence craze that has been a boon for Nvidia and AMD. The company lost nearly $19 billion last year and another $3.7 billion in the first six months of this year, prompting Tan to undertake a cost-cutting spree. By the end of this year, Tan expects Intel to have about 75,000 workers, a 25% reduction from the end of last year. Although rare, it's not unprecedented for the U.S. government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM. U.S. Commerce Secretary Howard Lutnick told CNBC during a Tuesday interview that the government has no intention of meddling in Intel's business, and will have its hands tied by holding non-voting shares in the company. But some analysts wonder if the Trump administration's financial ties to Intel might prod more companies looking to curry favor with the president to increase their orders for the company's chips. Intel was among the biggest beneficiaries of the Biden administration's CHIPS and Science Act, but it hasn't been able to revive its fortunes while falling behind on construction projects spawned by the program. The company has received about $2.2 billion of the $7.8 billion pledged under the incentives program — money that Lutnick derided as a 'giveaway' that would better serve U.S. taxpayers if it's turned into Intel stock. 'We think America should get the benefit of the bargain,' Lutnick told CNBC. 'It's obvious that it's the right move to make.'
CNBC
a few seconds ago
- CNBC
Hassett likely to be Trump's pick for Fed chief, though Warsh is more qualified, CNBC survey finds
President Donald Trump will tap his top economic advisor Kevin Hassett to be the next Fed chair, according to respondents to a special Jackson Hole Edition of the CNBC Fed Survey. But when asked who the president should pick, Hassett ranked a more distant fourth. Hassett, the director of the National Economic Council, firmly led the pack when asked who the president will choose from among 11 names currently being considered. He was followed by Fed Governor Christopher Waller and former Fed Governor Kevin Warsh. But when asked who the president "should" pick, Warsh took the No. 1 spot, closely followed by Waller and former St. Louis Fed President James Bullard. Fed Vice Chair for Supervision Michelle Bowman was in fifth after Hassett. "I think that Trump's familiarity with (Hassett) in the job that he did during the pandemic makes him a high candidate for Trump, who appreciates and awards loyalty," said Richard Steinberg, senior global market strategist with Focus Partners Wealth. While maintaining that Hassett is qualified, Allen Sinai of Decision Economics said he's concerned about Fed independence if he gets the job. "The politics of low interest rates for political reasons — a very strong view and push by the Trump administration — is a macro risk if it is seen in markets as a takeover by the administration," Sinai said. In the survey, 41% of respondents think the next Fed chair will conduct monetary policy independently of the president and 37% said it would be in coordination; 22% were unsure. Trump has campaigned hard for the Fed to cut rates, repeatedly insulting Powell, but Powell and the Federal Open Market Committee have so far resisted because of concern over potential inflation from tariffs. Bowman and Waller both dissented in July in favor of a rate cut. Survey respondents see two rate cuts this year from the Fed --- in September and December --- but also high inflation. The forecast for the consumer price index 12-month inflation rate remains at around 3% this year and 2.9% in 2026, suggesting the Fed will have to deal with above-target inflation for a while. Nearly two-thirds of respondents believe "substantial" impacts from tariffs on inflation are yet to come. "The Fed is caught between a rock and two hard places," said Richard Bernstein, CEO of Richard Bernstein Advisors. "Political pressure to cut rates and fiscal stimulus coming vs. the ongoing strength in the leading indicators of employment and inflation." As a result, Powell may not be as dovish about rate cuts as markets hope in his Jackson Hole, Wyo. speech. The Fed gathers each August for a symposium at which there are no votes but the chair traditionally delivers a keynote speech that often has indicated what's ahead. Almost 70% of respondents think the Fed chair will be neutral in his comments with 14% believing he will be dovish. Another 14% think he won't even discuss monetary policy or the economic outlook. "Powell's comments at Jackson Hole may be more balanced than the market is currently anticipating as he needs to weigh both downside risks to employment and upside risks to inflation," said Douglas Gordon, managing director at Russell Investments. Powell could discuss the Fed's effort to revisit its long-term strategy, with some expectation he addresses the Fed's controversial average inflation targeting. Respondents are divided over how to fix the central bank or whether it needs fixing at all. Just 11% say the Fed process of making monetary policy needs major reforms with 85% saying it needs either modest or little to no reform. On specific issues, a 41% plurality say the Fed should get rid of the dot plot where Fed officials anonymously indicate individual forecasts for the funds rate. But 37% say keep it as is, with another 19% saying it should be kept with individual forecasts linked to the rate outlook. When it comes to the 2% inflation target, 52% want to retain it but 44% want the Fed to adopt a range from about 1.4% to 2.7%. A 44% plurality want to eliminate the Fed's average inflation targeting, while 37% want to keep it. In average inflation targeting, the Fed takes account for prior misses in hitting its target, and could tolerate higher inflation for a while to account for inflation having run below target in previous years. Some have said this led the Fed to be more tolerant of inflation during the pandemic and slowed its decision to tighten policy.
