Business
Column: Did business leaders do enough to head off Trump's tariff saber-rattling? Obviously not
Former Treasury Secretary Lawrence H. Summers posted some well-chosen words Saturday about Donald Trump’s bewildering and pointless tariff war, which had been launched earlier that day.
In a string of tweets he called the 25% tariffs Trump proposed on goods from Canada and Mexico “inexplicable and dangerous,” joined the near-unanimous chorus of economists in predicting that the tariffs would raise domestic prices on “automobiles, gasoline, and all kinds of things that people buy,” and noted that the arbitrary imposition of tariffs would lead other countries to view the U.S. as a “bad partner,” which will “undermine our economy, our power and our national security.”
The tariffs, Summers wrote, are “an important test for the business community,” which knows that “this is not a pro-business strategy … I hope business leaders have the courage to say so.”
CEOs have kept their powder dry from public discourse knowing that Trump hates the humiliation of being trapped in a corner and can lash out like a wounded animal.
— Jeffrey A. Sonnenfeld, Yale
If only.
Summers’ plea came late, after the tariffs were announced. But with a few notable exceptions, America’s business leaders were silent about the sheer madness of Trump’s launching a trade war without legitimate justification.
In the months, weeks and days before the announcement, they spoke vaguely about how they would navigate tariff barriers affecting their own industries, but little about the broader ramifications. And even the fiercest critics of the tariffs bent a knee to Trump’s ostensible but exaggerated rationale for the tariffs, the flow of fentanyl and undocumented workers coming into the U.S. from Canada and Mexico.
For the most part, the business community’s pushback against tariffs played out via news releases covered largely by the business press, if at all. The impending economic crisis warranted a more direct response in which business leaders tried to seize the stage back from Trump, outlining in ways that ordinary Americans would understand the costs that every American household will shoulder if the tariffs continue.
They didn’t do that.
Business leaders may have calculated that Trump’s breast-beating about imposing higher tariffs was just talk, or part of a negotiating strategy. As it happened, they appear to be right. Monday, hours before the tariffs were to take effect, Trump backed away, agreeing to pause the tariffs for a month, pending negotiations with both cross-border partners.
But Trump’s actions rattled the financial markets, which didn’t fully recover losses sustained while the tariffs appeared to be imminent. Also rattled was the faith of foreign governments in America’s steadfastness, which may not recover as long as Trump is in the White House.
“CEOs have kept their powder dry from public discourse knowing that Trump hates the humiliation of being trapped in a corner and can lash out like a wounded animal,” says Yale business professor Jeffrey A. Sonnenfeld, whose insights into chief executive thinking are unmatched.
Let’s go deeper into the business community’s unsuccessful campaign, such as it was, against the tariffs.
On Saturday, the U.S. Chamber of Commerce called foul on Trump’s citing the Carter-era International Emergency Economic Powers Act as the statute giving him unilateral authority to impose tariffs by citing an “emergency situation” caused by “illegal aliens and drugs” coming from beyond the border.
“The imposition of tariffs under IEEPA is unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains, chamber Senior Vice President John Murphy said.
On Jan. 16, in her annual address on the state of American business, chamber CEO Suzanne P. Clark warned that “blanket tariffs would worsen the cost-of-living crisis, forcing Americans to pay even more for daily essentials like groceries, gas, furniture, appliances, and clothing. And retaliation by our trading partners will hit our farmers and manufacturers hard, with ripple effects across the economy.”
The National Assn. of Manufacturers also issued a strongly worded response, noting that “a 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses — employing millions of American workers — will face significant disruptions.”
From there, however, there’s a sharp drop-off in the vigor of comments from American industry about tariffs with the potential to upend the global economy. At General Motors, the American automaker most exposed to the impact of the tariffs, CEO Mary Barra wanly addressed the issue during the company’s fourth-quarter earnings announcement conference call Jan. 28.
Barra noted in response to a question that GM builds trucks in Mexico and Canada, “so we can look at where the international markets are being sourced from. So there’s plays that we can do on that perspective to minimize the impact if there are tariffs either on Canada or Mexico…. We’re doing the planning and have several levers that we can pull.”
That was it; no observations about tariff policy itself or its broader economic implications.
A spokesperson told me Monday that the company had “no new statements … at this time” and referred me to its trade groups, the Alliance for Automotive Innovation and the American Automotive Policy Council.
The council has merely asked that its cars and parts be exempted from any new tariffs without making any observations about the consequences of a tariff war. On Saturday, the alliance observed that “seamless automotive trade in North America accounts for $300 billion in economic value” and added, “We look forward to working with the administration on solutions that achieve the president’s goals and preserve a healthy, competitive auto industry in America.”
Drug overdose deaths have been falling sharply since mid-2023, raising questions about Trump’s rationale for tariffs at the Mexican and Canadian borders.
(Centers for Disease Control and Prevention)
I’ve written before that counting on corporate leaders to stand firm against policy threats to American democracy or the U.S. economy is a mug’s game. But these tariffs took direct aim at American businesses, which should have gotten them more stirred up.
The Business Roundtable, an organization of CEOs of top U.S. corporations, was especially mealymouthed. In a statement issued Sunday, it said, “We agree with the President’s goals of securing our borders and stopping the flow of illegal drugs into the country…. Business Roundtable hopes that Mexico, Canada and the U.S. can quickly reach a deal to strengthen security at the border.”
I asked the Roundtable whether it had anything to add, and got a rather snarky response from Michael Steel, its head of communications, that my question “seems a bit OTBE’ed at the moment.”
Steel meant “overtaken by events,” by which he was referring to an announcement Monday that Trump had decided to put Mexican tariffs on hold for a month, based on Mexico’s purported agreement to send 10,000 troops to the border.
As it happens, Mexico had already reached a similar agreement with the Biden administration without Biden’s having had to threaten to trash the global economy. There’s no indication that the 10,000 troops will be additional to the 15,000 troops deployed earlier. Trump is also said to be planning a talk with Canadian Prime Minister Justin Trudeau.
Could American CEOs have headed off the tariffs chaos either by a more focused publicity campaign or more jawboning with Trump? That’s impossible to say, in part because business leaders haven’t been out in front of Trump’s tariff policy in any broadly public way, and because no one can be sure why Trump had decided to impose steep tariffs on America’s most important trading partners without provocation.
More than two dozen CEOs had contacted Trump privately, Sonnenfeld told me, but their efforts to dissuade him plainly didn’t stop him from announcing the tariffs.
The corporate reaction to Trump’s tariff obsession shows that business leaders are still afraid of confronting Trump directly even as his policies threaten to erode their sales and profits, not to mention to undermine the rule of law in the U.S. in ways they will regret.
We know this because even the sternest statements from business organizations embraced Trump’s stated rationale of securing the borders. As a preface to its statement objecting to the tariffs, the Chamber of Commerce said “the President is right to focus on major problems like our broken border and the scourge of fentanyl.”
This isn’t an expression of fact about the border; it’s a shibboleth, designed to communicate that, all things considered, the chamber is still down with Trump’s leadership in general terms.
The truth is that Trump’s rationalizations don’t stand up to scrutiny. Under Biden, enforcement at the Mexican border was sharply stepped up, with 54,000 “encounters” recorded in September 2024, down from 250,000 in December 2023, according to the Migrant Policy Institute. In part this was the result of stronger enforcement by the Mexican government.
On fentanyl, the Centers for Disease Control and Prevention and the Drug Enforcement Administration both documented major victories in stemming the flow of illegal fentanyl into the country and sharply reduced overdose deaths. Drug overdoses peaked at about 114,000 in the year that ended June 2023, were down to less than 90,000 in the year that ended August 2024 and seemed destined to continue falling. Trump has claimed that 300,000 people are dying every year from drugs smuggled from Mexico, but that figure has never been true.
Nor is fentanyl smuggling a significant issue on the Canadian border; in fiscal 2024, U.S. agencies seized 21,000 pounds of fentanyl at the Mexican border, but only 43 pounds at the Canadian border.
All this points to the basic instability of American foreign relations in the Trump regime. Our business leaders need to acknowledge that such a situation won’t be good for anybody, and poses a particular threat to our relations with countries that have been loyal allies of the U.S.
That gives new meaning to the quip once offered by Henry Kissinger, in a different context: “It may be dangerous to be America’s enemy, but to be America’s friend is fatal.”
After the dot-com bubble burst in the early 2000s, Candace Nelson reevaluated her career. She had just been laid off from a boutique investment banking firm in San Francisco’s tech startup scene, and realized she wanted a change.
From her home, she launched a custom cake service that soon morphed into an idea for a cupcake-focused bakery. Nelson and her husband — whom she met at the Bay Area firm where she had worked — then pooled their savings, moved to Southern California and together opened Sprinkles Cupcakes from a 600-square-foot Beverly Hills storefront.
The store quickly sold out on opening day in 2005, and over the next two decades, the Sprinkles brand exploded across the country, opening dozens of locations of its specialty bakeries as well as mall kiosks and its signature around-the-clock cupcake ATMs in several states.
“It was an unproven concept and a big risk,” Nelson told the Times in 2013, at which point the business had 400 employees at 14 locations and dispensed upward of a thousand cupcakes a day from its Beverly Hills ATM alone.
But now, the iconic cupcake brand is no longer.
Sprinkles abruptly shut down all of its locations on Dec. 31, leaving hundreds of retail employees across Arizona; California; Washington, D.C.; Florida; Nevada; Texas; and Utah in a lurch with little notice, no severance and scrambling to fulfill a surge of orders from customers clamoring to get their last tastes.
Candace Nelson, the founder of Sprinkles cupcakes, in Beverly Hills in 2018.
(Mel Melcon / Los Angeles Times)
Although Nelson long ago exited the company, having sold it to private equity firm KarpReilly LLC in 2012, she shared her disappointment with its fate on social media.
“As many of you know, I started Sprinkles in 2005 with a KitchenAid mixer and a big idea,” Nelson said in the post. “It’s surreal to see this chapter come to a close — and it’s not how I imagined the story would unfold.”
The company, now headquartered in Austin, Texas, made no formal announcement regarding the closures and Nelson has not said more than what she posted online. The company did share a comment with KTLA, saying “After thoughtful consideration, we’ve made the very difficult decision to transition away from operating company-owned Sprinkles bakeries.” Neither Nelson nor representatives of Sprinkles and KarpReilly responded to The Times’ requests for comment.
Sprinkles’ demise comes at a tough time for the food and beverage industry. At brick-and-mortar food retail locations, the non-negotiable ingredient and labor costs can be high. And shifting consumer sentiments away from sugar-filled sweets and toward more healthy and functional options, strained pocketbooks, as well as pushes by federal and state governments to nix artificial colors and flavoring, are creating uncertainties for businesses, those in the food industry said.
A 24-hour cupcake ATM at Sprinkles Cupcakes in Beverly Hills in 2012.
(Damian Dovarganes / Associated Press)
“Over the last 10 years the consumer has wizened up tremendously and is looking at the back of the label and choosing where to spend their sweets,” said David Jacobowitz, founder of Austin-based Nebula Snacks, an online food retailer.
At the same time, it’s also not uncommon for businesses owned by private-equity firms to close on a whim, where relentlessly profit-driven decisions might be made simply to pursue more lucrative projects. In recent years, private-equity deals have been seen to milk businesses for profit by slashing costs and quality, and have appeared to play a role in the breakup of some legacy retail brands, including Toys ‘R’ Us, Red Lobster, TGI Fridays and fabrics chain JoAnn Inc. On the flip side, private equity can help infuse much-needed cash into a business and extend its life.
Stevie León and her co-workers received a text the night before New Year’s Eve informing them the franchise Sprinkles location in Sarasota, Fla., where they worked would close permanently after their shifts the next day.
León, 33, said her position as a scratch baker mixing batter and frosting cupcakes overnight had been a dream job, since she had been searching for ways to develop baking skills without paying for expensive schooling.
“I really thought it was my forever job and it was taken away literally in a day,” she said. “I’m just taking it one day at a time.”
Ivy Hernandez, 27, the general manager at the Sarasota store, said that after the news was delivered to her boss, the franchise owner, they rushed to learn their options to keep the store afloat but quickly learned it could be legally precarious to continue operating. The store had been open less than a year.
A nearby corporate store, Hernandez said, had been in disarray for months, with employees contending with broken fridges and lapsed ingredient shipments, as managers implored higher-ups to pay the bills so the business could operate properly.
“It really felt like they were trying to do everything they could to screw everyone over as hard as possible until the end,” Hernandez said.
Sprinkles did not respond to questions about the franchise program or allegations of mismanagement in the lead-up to the closure.
A person walks by Sprinkles on the Upper East Side in New York City in 2020.
(Cindy Ord / Getty Images)
The obsession with tiny cakes in paper cups traces back to an episode of “Sex and the City” aired in 2000 showing Miranda and Carrie savoring cupcakes on a bench outside a West Village bakery called Magnolia’s Cupcakes.
“Big wasn’t a crush, he was a crash,” Carrie says to Miranda as she peels down the wrapper on a cupcake topped with bright pink buttercream frosting. She punctuates the quip by taking a big bite, leaving a glob of frosting on her face.
The scene sparked a tourism phenomenon for the bakery — which went on to create a “Carrie” line of cupcakes — and helped propel the burgeoning cupcake industry and companies like Sprinkles Cupcakes, Crumbs Bake Shop and Baked by Melissa to new heights.
Within a decade there was already talk of a “Cupcake Bubble,” coined by writer Daniel Gross in a 2009 Slate article where he argued that the 2008 economic recession laid the groundwork for a proliferation of cupcake stores across America, because a lot of people could figure out how to make tasty cupcakes cheaply and scale up without a huge capital investment.
Amid the decimation of many other local retail businesses, one could take over storefronts in heavily trafficked areas for cheap. As a result, “casual baking turned into an urban industry,” Gross said.
The cupcake fervor hit its peak when Crumbs, which had started as a single bakery on Manhattan’s Upper West Side in 2003, went public in a reverse merger worth $66 million in 2011. The wildly popular mini-cakes were selling at $4.50 a pop. But it became clear very quickly that it had grown too large, too fast. It closed in 2014 after it lost its stock listing on Nasdaq and defaulted on about $14.3 million in financing.
Analysts at the time said consumers were cooling on opulent desserts and suggested tougher times were ahead for bakeries that focused solely on cupcakes.
But Baked by Melissa has thus far proved those analysts wrong. The company has remained privately owned, and according to its founder, is focused on nationwide e-commerce operations — and on expanding the brand beyond sweets. Founder Melissa Ben-Ishay has gained a following on social media by sharing recipes for nutritious, easy-to-make meals.
“Businesses that prioritize quick value increases to get acquired often crash,” Ben-Ishay told Forbes last year. “We’re committed to maintaining product quality and steady, long-term growth.”
Before its unceremonious and sudden closure, Spinkles company leadership had pushed to diversify its business as part of a strategy to recover from a pandemic-era lull.
Chief Executive Dan Mesches told trade publication Nation’s Restaurant News in 2021 that comparable sales had grown since pre-pandemic years. He said the company had ramped up its direct-to-consumer and off-premises offerings and created a line of chocolates made to look like the tops of their cupcakes. The company also introduced a new franchise program with the goal of opening some 200 locations in the U.S. and abroad over three years.
“Innovation is everything for us,” Mesches said.
Sprinkles was known for, among other things, inventive and somewhat corny methods of customer delivery. Besides the trademark ATMs, the company’s vending machines found at many airports made loud, attention-drawing jingles, drawing dramatic complaints and jokes from TikTok travelers. In the 2010s, the company debuted a custom-built truck — “the Sprinklesmobile” — to deliver cupcakes to cities without physical locations.
Frances Hughes, co-founder of online wholesale marketplace Starch, said there’s no question that gourmet sweet treats are still in vogue. But brick-and-mortar locations are much more risky, with more unpredictability. Having large fixed costs makes a business “extremely sensitive to small changes in traffic or frequency,” while online or e-commerce models can be more flexible.
“I think cupcakes as a product still have demand. But the novelty paths that support that rapid retail expansion have passed,” Hughes said.
When Nelson, the Sprinkles founder, posted her somber message about the closure, she asked people to share memories of the company. Many offered heartfelt responses, her comments flooded with stories, for example, of poor college students making the trek to the Beverly Hills location for a limited number of first-come, first-served free cupcakes.
But many of the comments also criticized Nelson’s sale to private equity.
“You sold it to PE and expected it to not close?? What planet are you living on? I don’t begrudge you for selling as that’s entirely your choice but to think any PE firm cares about a company in the slightest is insanity,” one Instagram user said.
Nicole Rucker, an L.A.-based pastry chef and owner of Fat+Flour Pie Shop, said she didn’t observe a decline in the quality of the product after the private-equity takeover. She has been a longtime admirer of the company, driving up from San Diego to sample the cupcakes when its store opened. The simple attractiveness of the box and the logo, and the consistency in the way cupcakes were decorated, “was inspiring,” she said.
“It had a strong hold on people for years,” Rucker said.
Rucker said however that when a private-equity-owned business shutters, she doesn’t feel sadness: “I would rather give my money to a fellow small-business owner, because I would rather know that every dollar and every sale matters.”
Michelle Wainwright, the owner and founder of Indiana-based bakery Cute as a Cupcake! said that although the niche cupcake industry may no longer be in its heyday — with “Sex and the City” no longer airing and competitive baking show “Cupcake Wars” (which Candace Nelson served as a judge on) now canceled — they are still versatile treats, with great potential for creativity.
And they are sentimental to her, because she uses her grandmother’s recipe.
“Cupcakes are still a winner,” Wainwright said. “It’s my belief that a life with out cupcakes is a life without love.”
Semiconductor testing equipment company FormFactor is laying off more than 200 workers and closing manufacturing facilities as it seeks to cut costs after being hit by higher import taxes.
The Livermore, Calif.,-based company plans to shutter its Baldwin Park facility and cut 113 jobs there on Jan. 30, according to a layoff notice sent to the California Employment Development Department this week. Its facility in Carlsbad is scheduled to close in mid-December later this year, which will result in 107 job losses, according to an earlier notice.
Technicians, engineers, managers, assemblers and other workers are among those expected to lose their jobs, according to the notices.
The company offers semiconductor testing equipment, including probe cards, and other products. The industry has been benefiting from increased AI chip adoption and infrastructure spending.
FormFactor is among the employers that have been shedding workers amid more economic uncertainty.
Companies have cited various reasons for workforce reductions, including restructuring, closures, tariffs, market conditions and artificial intelligence, which can help automate repetitive tasks or generate text, images and code.
The tech industry — a key part of California’s economy — has been hit hard by job losses after the pandemic, which spurred more hiring, and amid the rise of AI tools that are reshaping its workforce.
As tech companies and startups compete fiercely to dominate the AI race, they’ve also cut middle management and other workers as they move faster to release more AI-powered products. They’re also investing billions of dollars into data centers that house computing equipment used to process the massive troves of information needed to train and maintain AI systems.
Companies such as chipmaker Nvidia and ChatGPT maker OpenAI have benefited from the AI boom, while legacy tech companies such as Intel are fighting to keep up.
FormFactor’s cuts are part of restructuring plans that “are intended to better align cost structure and support gross margin improvement to the Company’s target financial model,” the company said in a filing to the U.S. Securities and Exchange Commission this week.
The company plans to consolidate its facilities in Baldwin Park and Carlsbad, the filing said.
FormFactor didn’t respond to a request for comment.
FormFactor has been impacted by tariffs and seen its growth slow. The company employs more than 2,000 people and has been aiming to improve its profit margins.
In October, the company reported $202.7 million in third-quarter revenue, down 2.5% from the third quarter of fiscal 2024. The company’s net income was $15.7 million in the third quarter of 2025, down from $18.7 million in the same quarter of the previous year.
FormFactor’s stock has been up 16% since January, surpassing more than $67 per share on Friday.
Two people allegedly used $100 counterfeit bills at dozens of In-N-Out Burger restaurants in Southern California in a wide-reaching scam.
Glendale Police officials said in a statement Friday that 26-year-old Tatiyanna Foster of Long Beach was taken into custody last month. Another suspect, 24-year-old Auriona Lewis, also of Long Beach, was arrested in October.
Police released images of $100 bills used to purchase a $2.53 order of fries and a $5.93 order of a Flying Dutchman.
The Los Angeles County District Attorney’s Office charged Lewis with felony counterfeiting and grand theft in November.
Elizabeth Megan Lashley-Haynes, Lewis’s public defender, didn’t immediately respond to a request for comment.
Glendale police said that Lewis was arrested in Palmdale in an operation involving the U.S. Marshals Task Force. Foster is expected in court later this month, officials said.
”Lewis was found to be in possession of counterfeit bills matching those used in the Glendale incident, along with numerous gift cards and transaction receipts believed to be connected to similar fraudulent activity,” according to a police statement.
A representative for In-N-Out Burger told KTLA-TV that restaurants in Riverside, San Bernardino and San Diego counties were also targeted by the alleged scam.
“Their dedication and expertise resulted in the identification and apprehension of the suspects, helping to protect our business and our communities,” In-N-Out’s Chief Operations Officer Denny Warnick said. “We greatly value the support of law enforcement and appreciate the vital role they play in making our communities stronger and safer places to live.”
The company, opened in 1948 in Baldwin Park, has restaurants in nine states.
An Oakland location closed in 2024, with the owner blaming crime and slow police response times.
Company chief executive Lynsi Snyder announced last year that she planned to relocate her family to Tennessee, although the burger chain’s headquarters will remain in California.
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