• In today’s CEO Daily: Geoff Colvin on the effect of Trump’s tariffs on corporate profits.
• The big story: Forecasters eye a global recession.
• The markets: Worst since Covid in 2020.
• Analyst notes from JPMorgan, Wedbush, UBS, and Oxford Economics on the risk of economic contraction under the new global trade rules.
• Plus: All the news and watercooler chat from Fortune.

Good morning. Today’s worldwide economic chaos, sparked by President Trump’s new tariffs, may be shocking, but it isn’t new. A similar story played out eight years ago, in Trump’s first term as president. A look at what he did, and the repercussions that followed, is instructive for business leaders, investors, and consumers. And it is by no means encouraging.

Unlike in his current term, Trump back then didn’t immediately launch a trade war. He devoted his first year as president to easing business regulation and getting a historic tax cut through Congress. CEOs were jubilant. But then, in January of his second year, he showed why he had declared himself Tariff Man. He imposed tariffs on China and then quickly broadened tariffs to more countries. The party was over. Specifically:

Tariffs helped a few U.S. companies but also injured thousands of others. For example, Trump imposed tariffs on imported steel—great for the handful of U.S. steelmakers but a painful cost increase for the thousands of U.S. manufacturers that use steel. Expand the steel example across the economy and the result was a hard punch to profits. During Trump’s first year in office (2017), before he imposed tariffs, U.S. corporate profits rose 8%. In the following five quarters, with tariffs, profits lurched into reverse, shrinking 1.5%, annualized.

Stock prices got whacked. From Trump’s 2016 election until tariffs began in January 2018, the S&P 500 rose at a 27.3% annualized pace. But with tariffs added, the S&P rose at just 3.8% annualized (January 2018 to November 2019).

CEOs reversed their view of Trump. Immediately after Trump won in 2016, bosses raised their confidence as measured by the Conference Board, and confidence varied slightly up and down around that new level during Trump’s first year in office. But soon after he declared his trade wars, CEO confidence plunged to levels not seen since the worst days of the financial crisis in 2008-09.

Note that Trump is executing his main economic policies in the reverse order he followed in his first term. Back then he got the tax bill done first, then turned to tariffs. Now, having declared a historic trade war, he will spend much of 2025 on that tax bill, many elements of which are scheduled to sunset on December 31. He will try to keep that bill’s tax cuts and even cut taxes further. If he succeeds, he might regain his currently ebbing support from business leaders, investors, and consumers. But that’s a big “if” and a big “might.” — Geoff Colvin

More news below.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

This story was originally featured on Fortune.com

Alexa, do you have time for an elevator pitch?

The Alexa Fund, which began in 2015 as a way to seed new startups in Amazon’s then-burgeoning voice ecosystem, is widening its net beyond its namesake platform. The tech giant’s venture arm recently announced several new hardware- and AI-centric investment areas, along with four startups it’s backing as part of that expanded scope.

The announcement follows Amazon’s long-awaited overhaul of its Alexa platform with a slew of new generative AI features. It also comes after Amazon pushed into the foundation model game for the first time with the new family of Nova models it announced last December.

Alexa Fund Director Paul Bernard said Alexa’s expanded capabilities offer more avenues for startups to engage in the platform, although that’s not the fund’s sole focus anymore.

“Our mission is not really about advancing Alexa’s cause, per se, like we start with making bets on these themes that have applicability for many parts of Amazon,” Bernard told Tech Brew. “At the same time, Alexa is getting more capabilities. Alexa has ears, Alexa has eyes, Alexa has screens. And so the applicability of these technologies to Alexa is relevant, and is only going to get more relevant.”

The Alexa Fund will cover five new areas:

• On-the-go: Bernard said this category spans new devices and sensors beyond smartphones, as well as conversational AI and other AI-related mobile products that set the stage for an app-free future, where “customers are removed from the constraints of iOS and app stores.”
• Generative media: “There will be an AI YouTube, there will be an AI Netflix, and we’re interested in things happening in that area,” Bernard said.
• Specialized AI experts: This includes AI agents and chatbots focusing on domains like education, health and wellness, and travel.
• Next-generation architecture: Bernard wants to explore what might come after the current generation of transformer-based models.
• Robotics: Eventual generalized robots and other physical embodiments of AI.

Along those lines, the fund announced new investments in NinjaTech, an AI agent-based assistant platform; AI media generation studio Hedra; Ario, an AI organization assistant for parents; and HeyBoss, a code-free app development platform.

In addition to funding, Alexa Fund also offers founders access to Amazon’s resources, including APIs and software developer kits (SDKs) and partnership opportunities with Amazon businesses. But with a company as vast as Amazon, there’s not necessarily a guarantee that other parts of the company won’t be competing with a given startup.

“Amazon’s a big company, and oftentimes teams at Amazon don’t know what other teams at Amazon are doing. There’s certain things that are self-evident…areas where Amazon is so focused on a product or an experience where it doesn’t make sense for us to be an investor. In most areas, though, it’s very ambiguous, and especially in the world of AI, where so many of these things are going to combine and work together in some complementary way,” Bernard said.

“You’d be surprised at the sophistication of founders in understanding the world is complex and that things are very fluid, and they need to make their own calculations about the virtues of working with us as a fund that has a demonstrated track record of bringing value to our companies.”

Amazon is far from the only tech company using a venture arm to back companies that might complement its AI goals. Salesforce expanded its AI investment fund to $1 billion last September, OpenAI backs a variety of different AI startups, and Cisco rolled out its own $1 billion AI fund last June, among many other similar efforts.

This report was written by Patrick Kulp and was originally published by Tech Brew.

This story was originally featured on Fortune.com

Asian shares slid further Friday after U.S. President Donald Trump’s tariffs sent shudders through Wall Street at a level of shock unseen since the COVID-19 pandemic pummeled world markets in 2020.

Everything from crude oil to Big Tech stocks to the value of the U.S. dollar against other currencies has fallen. Even gold, a traditional safe haven that recently hit record highs, pulled lower after Trump announced his “Liberation Day” set of tariffs,’ which economists say carries the risk of a potentially toxic mix of weakening economic growth and higher inflation.

Markets in Shanghai, Taiwan, Hong Kong and Indonesia were closed for holidays, limiting the scope of Friday’s sell-offs in Asia.

Tokyo’s Nikkei 225 lost 4.3% to 33,263.58, while South Korea’s Kospi sank 1.8% to 2,441.86.

The two U.S. allies said they were focused on negotiating lower tariffs with Trump’s administration.

Australia’s S&P/ASX 200 dropped 2.2% to 7,684.30.

In other trading early Friday, the U.S. dollar fell to 145.39 Japanese yen from 146.06. The yen is often used as a refuge in uncertain times, while Trump’s policies are meant in part to weaken the dollar to make goods made in the U.S. more price competitive overseas. The euro gained to $1.1095 from $1.1055.

Trump announced a minimum tariff of 10% on global imports, with the tax rate running much higher on products from certain countries like China and those from the European Union. Smaller, poorer countries in Asia were slapped with tariffs as high as 49%.

It’s “plausible” the tariffs altogether, which would rival levels unseen in more than a century, could knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5%, according to UBS.

That’s such a big hit it “makes one’s rational mind regard the possibility of them sticking as low,” according to Bhanu Baweja and other strategists at UBS.

Trump has previously said tariffs could cause “a little disturbance” in the economy and markets. On Thursday he downplayed the impact.

“The markets are going to boom, the stock is going to boom and the country is going to boom,” Trump said as he left the White House to fly to Florida.

The S&P 500 sank 4.8% to 5,396.52 and the Dow Jones Industrial Average dropped 4% to 40,545.93. The Nasdaq composite tumbled 6% to 16,550.61.

Some of the worst hits walloped smaller U.S. companies, and the Russell 2000 index of smaller stocks dropped 6.6% to pull more than 20% below its record.

Four of every five that make up the S&P 500 declined.

Best Buy fell 17.8% because the electronics that it sells are made all over the world. United Airlines lost 15.6% because customers worried about the global economy may not fly as much for business or feel comfortable enough to take vacations. Target tumbled 10.9% amid worries that its customers, already squeezed by still-high inflation, may be under even more stress.

Investors knew Trump was going to announce sweeping new tariffs, and fears surrounding it had already pulled Wall Street’s main measure of health, the S&P 500 index, 10% below its all-time high.

Some analysts and investors believed Trump might use tariffs simply as a tool for negotiations, rather than as a long-term policy. But he indicated Wednesday that he sees them as a way to bring factory jobs back to the United States, which could take years.

The Federal Reserve could cut interest rates to support the economy, but lower rates can push up inflation, already a worry given that U.S. households are bracing for sharp increases to their bills due to the tariffs.

Yields on Treasurys tumbled in part on rising expectations for coming cuts to rates, along with general fear about the health of the U.S. economy. The yield on the 10-year Treasury fell to 4.04% from 4.20% late Wednesday and from roughly 4.80% in January.

A report Thursday said fewer U.S. workers applied for unemployment benefits last week, better than economists were expecting. A separate report said activity for U.S. transportation, finance and other businesses in the services industry grew last month, but by less than forecast.

Also early Friday, U.S. benchmark crude oil shed 70 cents to $66.25 a barrel. Brent crude, the international standard, was down 64 cents at $69.50 a barrel.

This story was originally featured on Fortune.com

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