This is the published version of Forbes’ CEO newsletter, which offers the latest news for today's and tomorrow's business leaders and decision makers. Click here to get it delivered to your inbox every week.

President Donald Trump has dubbed Wednesday “Liberation Day,” though it seems many businesses and economists feel that what the day will bring is quite the opposite. In two days some of the steep reciprocal tariffs that Trump has talked about since the campaign trail are said to be announced, specifically in terms of what nations, what goods and what percentages. But April 2 will also be the day that the 25% exemption on new taxes on imports from Mexico and Canada expires, and a new 25% tariff on imported cars, announced last week, takes effect.

Trump has said that the tariffs will liberate the U.S. from being “ripped off by virtually every country in the world.” But the way that many businesses view it is quite different. The vehicle tariff applies to both vehicles and parts, which Cox Automotive Chief Economist Jonathan Smoke said will bring vehicles the highest effective tariff rate since World War II, writes Forbes senior contributor Ed Garsten. Because vehicle parts are made and vehicles are assembled throughout the world, based on factories and supply chains set up under former trade agreements, Cox estimated a U.S.-made car will cost $3,000 more, and one made in Canada or Mexico will cost $6,000 more. Cox Automotive also estimates a disruption to manufacturing by mid-April, with 20,000 fewer vehicles made per day—a 30% production hit.

Soon after the tariffs were announced, J.D. Power predicted that Americans would flood car dealerships over the weekend to make purchases before the new taxes go into effect, for a projected 9.6% increase in sales compared with March 2024, Garsten writes.

All this is perhaps a precursor to what this week and weekend will look like, depending on how much time there is between the announcement of the reciprocal tariffs and their enactment. While tariffs on large-ticket items like autos represent more immediate consumer costs than tariffs that impact electronics, athletic gear, gas or furniture, it’s likely that consumers will also try to make those purchases quickly to beat the clock. And what happens to commerce once tariffs take effect is another big question. For his part, Trump said in a Saturday night interview with NBC that he “couldn’t care less” if car prices increased because of the new tariffs, saying people would start buying American-made vehicles—but not addressing that those might be much more expensive as well.

AI use is more widespread throughout different companies, and it’s time to consider how the technology can be used to make certain enterprises more successful. I talked to Quent Capital founder and portfolio manager Gregg Fisher about what will make a company truly successful as AI continues to develop and grow. An excerpt from our conversation is later in this newsletter.

ECONOMIC INDICATORS

The markets began last week with some buoyancy, with investors thinking that the tariffs Trump plans to announce on Wednesday wouldn’t be as high or sweeping as initially thought. But that came crashing down after the vehicle tariff announcement. By Thursday morning, several automakers’ stocks had fallen on markets worldwide, with Honda’s shares down 2.5%, Subaru’s almost 5% lower, and Jaguar and Land Rover owner India’s Tata Motors dropping more than 5.5%. In the U.S., markets dropped across the board on Friday, with the Nasdaq falling 2.7%, the S&P down 1.97%, and the Dow losing 1.69%.

Friday’s stock market tumble was about more than tariffs, though. The federal government released February’s personal consumption expenditures index and found core inflation, excluding food and fuel, was 2.8% compared to last year. This is not only higher than the Federal Reserve’s target of 2% inflation but slightly more than economists’ expectations of 2.7%. From January to February the PCE price index increased 0.3%, while the core index was up 0.4%.

Considering many economists have predicted tariffs can drive inflation up, these figures a week before rates are announced and new tariffs go into effect do not sound promising.

This week started on a low economic note, as stocks worldwide fell following Trump’s Sunday comments on Air Force One that there would be no exceptions when it comes to reciprocal tariffs. A Sunday client note from Goldman Sachs upped its forecast for a recession in the next year to 35%, and Moody’s Investors Service, which was the last credit rating agency to give the U.S. the highest possible position, changed its outlook to negative, writes Forbes senior contributor Erik Sherman.

Consumers are already predicting the worst. The University of Michigan’s monthly consumer sentiment survey showed consumers’ feelings about the current state of the economy dropped 12% to 57% in March, adding up to a 30% decline since November. Inflation expectations are also up to 5%, marking three consecutive months of increases. Survey director Joanne Hsu writes this reading is comparable to peak post-pandemic inflation and exhibits “substantial uncertainty.”

FROM THE HEADLINES

Leading up to 2025, analysts and economists said this would be a huge year for M&A. And while 2025 has seen some large deals in the tech, healthcare and beverage space, the M&A space hasn’t exactly been booming. Forbes’ Hank Tucker writes there have been declines in deals—down 24% through March compared with 2024, and 45% fewer than 2021. Trump’s rapidly changing and uncertain economic policies are likely to blame, with tariffs and threats thereof continuing to shake up the stock market—including driving losses for leading investment banks. But without more solid stock market performance, experts told Tucker, it’s difficult for acquiring companies to confidently pursue targets with values that are constantly fluctuating.

EY Americas Vice Chair for Strategy and Transactions Mitch Berlin told Forbes CEO earlier this year that the deals will eventually happen; it’s just a question of when.

NOTABLE NEWS

The Covid-19 pandemic is in the rearview mirror for most big businesses, but many small businesses still haven’t recovered, writes Forbes’ Brandon Kochkodin. The Fed’s annual Small Business Credit Survey, which surveyed more than 7,600 firms with fewer than 500 employees, showed that last year more businesses saw a drop in revenue than an increase. This is the first time in three years this survey has revealed more revenue backsliding than growth. The survey also showed the most common operational challenge was reaching customers and growing sales—seen by 57% of companies—and three-quarters found the rising cost of goods, services and wages to be a financial challenge. However, Kochkodin writes, it’s not all gloomy. Fewer companies raised their prices last year than in the past, meaning they may not have added to their revenues with price hikes.

TOMORROW’S TRENDS

How To Be A Long-Term AI Success Story

AI is on its way to becoming a ubiquitous technology, and it’s worth asking what makes a successful AI company. Gregg Fisher, founder and portfolio manager of innovations investor Quent Capital, spends a lot of time thinking about the companies that will see the most success down the road. He devoted a recent blog post to what actually makes a successful-in-the-long-run AI company, and I talked to him about what that means. This conversation has been edited for length, clarity and continuity.

What do you think of the way investors, the markets and Wall Street at large are looking at AI companies today?

Fisher: At some point, narrative influences the behavior of markets to the point where the prices of things become so absurd that they are fantastic businesses and fantastic industries. They’re just too expensive. It‘s like 10 or 20 companies seem to be getting all the energy. There’s a whole lot of AI beneficiaries out there that you’ve never heard of or wouldn’t think about.

The place where the greatest opportunity might exist is medical technologies. And we’re seeing that. There’s a business that I talked to recently who I’ve been invested in. It's called Butterfly Networks. They created a $2,000 sonogram machine. Imagine being in the middle of nowhere in Africa and you’re pregnant. It’s a struggle. Is your baby healthy? Is it a girl or a boy? Not too long ago, there was no internet there, and there certainly weren't any $50,000 sonogram machines. And there certainly weren’t any doctors that even knew how to read the sonograms if they were there. Out comes this $2,000 thing you could buy and plug into your iPhone. It’s solar powered. It connects to the internet through satellites. Ultimately, what spits out is a high level of precision that is faster using AI and all sorts of research and data that makes that accessible all over the world.

There’s so much of this popping up. This has nothing to do with Nvidia.

We are at the beginning of the generative AI boom. How long do you think it will take for this space to get mature enough that we are not saying, ‘This is a company that uses AI,’ but instead, ‘This is a company that does this great thing’?

Another couple of weeks. (laughter)

We don’t talk about Amazon as a cool company using the internet. That was cool back when I was young in the business in the ‘90s. It wasn’t the internet providers that hit the home runs. It was the businesses that figured out how to use the internet to distribute their products. There will be a time where businesses succeed for any reason, and maybe they find ways to embrace technology to make them great businesses, and then we’ll all know about them. Then they’ll be in the S&P 500 and very good companies that are very profitable that you want to own for your retirement.

There is a whole world of these smaller, emerging, fast-growing companies that are using AI in ways that you may not be thinking about and that are not that obvious to people. Even only a couple analysts might be looking at them, let alone the rest of the world.

For an up-and-coming company using AI that wants to be the next Google and not the next America Online, what advice would you give them to succeed in this space?

Think about customer needs. The greatest companies in the world think like entrepreneurs, and it’s the science of entrepreneurship: What are some of the problems in the world that can be solved? If there’s some way to solve those problems using advanced data analytics to hire less people, be more efficient, or get it done in a better way. Think about places where you can solve a serious problem and do it in a faster, smarter way using advanced data analytics. Focus on the customer, focus on the client, solve their problems, and whether you’re using AI or not, you’re likely to be successful.

FACTS + COMMENTS

Cloud computing company CoreWeave made its market debut on Friday. Cofounder and Chief Development Officer Brannin McBee told Forbes’ Phoebe Liu that the company priced its shares at a lower value than anticipated, but the future looks promising.

$40: Share price after CoreWeave’s first day on the market, slightly above its initial price of $39

$23 billion: Valuation of CoreWeave after a day of trading

‘I think we raised exactly what we needed for the business’: McBee told Liu

STRATEGIES + ADVICE

AI agents offer vast potential to improve efficiency for many departments in the average business. While there is a lot that they can do, here are five tasks you should make sure are always done by humans.

In a world where you’re competing with every other company to employ top talent, company culture can be a huge differentiator. Here’s how to instill a culture that makes people want to work for you for the long haul.

QUIZ

Last week, which foreign auto manufacturer announced a $21 billion investment to boost its manufacturing in the United States?

A. Toyota

B. Volkswagen

C. Honda

D. Hyundai

See if you got it right here.