The questions facing a new Trump era

Good morning on this Inauguration Day. Welcome to Round 2 of President Donald Trump. No matter your politics, it is likely to be a historic ride.

For business and policy leaders, the next administration is expected to be filled with deals of all sorts — from White House agreements brokered over secure phone lines with foreign powers to congressional backroom pacts to headline-making deals negotiated by Wall Street.

This is a transactional president, perhaps the most transactional ever. He wants to engage with the business community, which is a big distinction from the Biden administration. He takes great pride in publicly name-dropping the C.E.O.s he’s talking with. “Today, I spoke with Tim Cook of Apple,” he told supporters last night. “He said they’re going to make a massive investment in the United States because of our big election win.”

Trump is rooting for big business, until he isn’t. He’s fickle. And uncertain.

That poses a big challenge for business leaders: How and when might Trump’s unpredictability emerge? Is there a red line? C.E.O. calculations have been that a second term means that uncertainty — something many dislike — is a certainty. But many think that they can manage it, or at least they tell themselves they can.

After Trump’s 2016 win, he invited tech C.E.O.s to meet with him (that was, of course, a photo op). They showed up, though many came reluctantly. Others joined his administration’s various councils only to depart when he said things that appeared to cross a line.

This time, many are all-in — at least for now. Some genuinely support him, or at least think he was better than the alternative. Others have taken an “if you can’t beat ’em, join ’em” attitude. Or it may be that his threats, real and imagined, are working. He said as much in a candid moment about his threats to arrest Mark Zuckerberg, Meta’s C.E.O., and the company’s decision to abandon fact-checking on the platform, saying Zuckerberg’s decision was “probably” the result of those threats. (Many of these same people rebuked him after the Jan. 6 attack on the Capitol in 2021).

We will see how long the love affair with business lasts. It may be longer than some skeptics suggest. Now that he’s in power, the business community needs Trump to like them: It’ll need his support if deals and investments are to flourish; it needs him to push the corporate tax rate lower; and the crypto world needs him. (He also needs it given his and his family’s forays into the sector). All of this raises all sorts of questions, as we get into below.

We’ll be here, every morning, reporting on all of it, as well as raising and asking tough questions. I imagine there will be a lot of them. — Andrew Ross Sorkin

TikTok’s fuzzy future

TikTok users in the United States breathed sighs of relief on Sunday after the video platform began to resume service, thanks to Donald Trump’s pledge to suspend a ban of the app.

But while the president-elect took credit for saving the hugely popular app — “So I like TikTok! I had a slightly good experience, wouldn’t you say?” he said at a rally on Sunday — his thinly sketched proposal leaves some big questions unanswered.

What Trump said: His “initial thought,” he wrote on Truth Social, was a 50-50 joint venture between ByteDance, TikTok’s Chinese owner, and an unspecified American entity. It represented Trump’s favorite thing — a deal — and on the surface had some appeal.

Trump added that he envisioned ByteDance handing over half of the company to the U.S. and that the U.S. wouldn’t pay a dime. “Whether you like TikTok or not, we’re going to make a lot of money,” he said.

But hold on a second. Trump hasn’t addressed the thorny national security concerns that persuaded a bipartisan group of lawmakers and President Biden to back the TikTok ban, not to mention who controls the ByteDance algorithm that is the key to the app’s success.

Moreover, it’s not clear how Trump can legally get around the ban. While he has promised to issue an executive order saving the app, the law is still on the books — though Trump can choose how aggressively to enforce parts of it, legal experts say.

Republicans and their allies criticized Trump’s efforts to circumvent the law:

• Senator Tom Cotton, the Arkansas senator who chairs the Senate Intelligence Committee, warned on X that any company that aids “communist-controlled TikTok could face hundreds of billions of dollars of ruinous liability under the law.”

• Speaker Mike Johnson added that he expected the law to be enforced: “The law is very precise, and the only way to extend that is if there is an actual deal in the works,” he said on “Meet the Press” on Sunday.

• Joe Lonsdale, the venture capitalist who’s close to Trump allies like Peter Thiel, wrote on X, “Tomorrow he becomes POTUS, NOT King. Congress and SCOTUS were clear. He can give TikTok 90 days, then if it’s not sold, any company facilitating it is breaking the law.”

• And Elon Musk reiterated that while he didn’t believe in banning TikTok, he found it “unbalanced” that TikTok be allowed to operate in the U.S. but X remains blocked in China. (That said, China’s vice president, Han Zheng, met with Musk and other business leaders to say his country was open to American business.)

What next? Trump will need to flesh out his proposal in the coming days to persuade lawmakers and others that it’s legally sound. Meanwhile, other bidders for TikTok are circling, including the billionaire Frank McCourt, who has assembled a group that wants to buy the app without its key algorithm, and reportedly Perplexity, an artificial intelligence start-up.

For ByteDance’s U.S. investors, which include General Atlantic, Susquehanna and Sequoia, a preferred course — second only to keeping the whole thing intact — may well be to spin the company to themselves. But if China won’t let them keep the algorithm, what would they be left with?

Executive orders galore

In between the dining, dancing and speechifying, President-elect Donald Trump is expected to unveil a flurry of executive orders on Monday.

First up, according to Stephen Miller, Trump’s deputy chief of staff, are major policy shake-ups for energy, immigration and border security, work protections for federal employees, as well as halting or scaling back key planks of the Biden administration’s climate agenda.

D.E.I. is also in the cross hairs. President Biden’s diversity, equity and inclusion measures for federal agencies are expected to be rolled back, just as big companies, such as Meta and Amazon, plan to eliminate or revamp some of these policies.

Electric vehicle credits are on the chopping block. Trump has long promised to undo the Inflation Reduction Act, a law that has supporters among some oil executives. It also extends credits to electric vehicle customers. Withdrawing those could dent sales of E.V.s.

That said, Elon Musk, Tesla’s C.E.O. and a key Trump ally, has suggested his company could weather a pullback.

Crypto bulls rejoice

Stock and bond markets are closed in the United States for Martin Luther King’s Birthday. But crypto trading is available — and it has helped mint Donald Trump as the latest crypto billionaire.

This weekend saw a frenzied rally for Donald Trump and Melania Trump meme coins, prompted by Trump himself. “GET YOUR $TRUMP NOW,” the president-elect told his followers on Truth Social this weekend.

It rallied further when Robinhood, the trading platform that made a big donation to Trump’s inauguration fund, began letting its customers trade the $TRUMP coin.

Bitcoin, which hit a record on Monday, and other digital tokens have soared since Election Day on the hope that the incoming administration will loosen regulation around the sector. That said, the rally in $Trump and $Melania tokens has astounded longtime market watchers.

Ethics watchdogs see the coin as a “profound conflict of interest” for Trump. Though organizers of the Trump coin say that buying it is neither a political donation nor an investment contract, skeptics say it raises questions about the president-elect benefiting from an industry he is supposed to be regulating.

There’s also the question of whether foreign governments could buy into the coin, potentially violating the foreign emoluments clause of the Constitution.

“This may represent the single worst conflict of interest in the modern history of the presidency,” Norm Eisen, a White House ethics adviser during the Obama administration, told The Washington Post.

The big money behind the inauguration

As Donald Trump prepares to take office, one thing is becoming especially clear: Washington is increasingly becoming a city where it pays to pay up.

The inaugural committee has already raised more than $170 million, shattering a record set by the first Trump committee.

Corporations as well as donors have opened their wallets. Apple, Google, Meta and Microsoft all gave millions to Trump this time, taking advantage of the more-permissive rules around donations for post-election activities such as the inauguration.

“Corporate America has embraced President Trump,” Brian Ballard, a powerful lobbyist and Trump fund-raiser, told The Washington Post. “Every corporate client I have wants to be a part of it.”

Critics of such donations point to a pay-to-play culture. An analysis by OpenSecrets of giving to the first Trump inauguration found that more than half of the 63 federal contractors who gave won multimillion-dollar bids in 2017.

Among them:

• For-profit prison operators, including CoreCivic and Geo Group, saw huge increases in contract awards.

David Rubenstein, the billionaire co-founder of the Carlyle Group, put it bluntly to The Times:

Big donors, he said, “would like to get the policies they believe in from the federal government — more oil drilling, easier antitrust policy, more favorable crypto policy, less bank oversight. They also want more support for helping American companies invest overseas, and have ready access to government officials.”

How Trump’s inauguration stacks up

The inauguration of Donald Trump as president will be a pricey and star-studded affair.

Carrie Underwood, Rascal Flatts and the Village People are set to perform. And Snoop Dogg headlined Friday’s black-tie “Crypto Ball,” a $2,500-a-ticket gala that hailed Trump as “the first crypto president.”

Inauguration celebrations have changed significantly over the course of American history: The more lavish the festivities, the greater the statement. On the unpretentious side were those for Thomas Jefferson and Jimmy Carter. The co-chairman of Carter’s inaugural committee told The Times that the goal was “an inauguration which is traditional but modest in one, not extravagant.”

Barack Obama declined corporate donations for his first inauguration (though he still managed 10 official balls and a performance by Jay-Z) before accepting them for his second inauguration. President Biden’s pandemic-marred inauguration ended with fireworks, but there were no galas.

Trump’s festivities may draw comparisons to those of Ronald Reagan, whose 1981 inauguration fund set a record by raising $8 million (about $29 million in today’s money). As The Times described the day:

In white and black tie, in sequins and sables and clouds of perfume, Republican revelers stepped out tonight to the most lavish series of inaugural balls ever held in the nation’s capital.

It was an evening of shiny black limousines and nostalgic swing bands, of glittery Hollywood celebrities and wealthy Western oil men. The aura of big money was everywhere.

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The retail industry’s report card for the critical holiday shopping season is in.

American shoppers surprised analysts, economists and even retail executives by spending more than expected in November and December. But a closer read shows that not all retailers are benefiting.

Retail sales during the holiday season increased 4 percent from a year earlier, according to data from the Commerce Department. Purchases of cars, clothes and electronics helped bolster sales.

Over the last week or so, some retailers have signaled how business went during the holidays — with more reports to come in February. Target’s November and December total sales rose nearly 3 percent from the prior year, pushed higher as people put more clothes and toys in their shopping carts. Abercrombie & Fitch said sales had exceeded expectations and predicted growth of 7 to 8 percent over the 2023 holiday shopping season.

Lululemon, the maker of $98 leggings and other athletic wear, said it anticipated sales growth of 11 to 12 percent in the fourth quarter. “I still see a consumer that’s healthy,” Calvin McDonald, chief executive of Lululemon, said in an interview.

For some retailers, though, customers did not seem in a mood to splurge.

Signet Jewelers, which owns Kay Jewelers, Zales and Jared, said its comparable sales would decline as much as 2.5 percent in the fourth quarter because of weaker-than-expected sales in the days leading up to Christmas. When it came to “fashion gifting,” customers “gravitated to lower price points even more than anticipated,” Joan Hilson, Signet’s chief financial and operating officer, said in a statement, and the company did not have enough of what shoppers were seeking.

Macy’s, which warned analysts in December that its customers were holding back, said sales were roughly flat during the fourth quarter. The department store chain is in a monthslong process of closing 66 of its 479 stores, from Philadelphia to Sacramento, with more to come through 2026. But it said comparable sales had increased at the Macy’s locations that it sees as its future, as well as Bloomingdale’s and the beauty chain Bluemercury, which it also owns.

Macy’s is not the only chain that is contracting. Kohl’s, which has had 11 consecutive quarters of declining sales, said it would shutter 27 “underperforming” stores by April. The department store chain has more than a thousand stores.

Since 2022, as inflation curtailed consumer spending and shoppers limited their visits to favored stores, foot traffic and sales have slowed. The bounce that the holiday season usually offers retailers was not able to save all of them.

In the last month, a number of struggling retailers — the fabric and crafts chain Joann, the Container Store and Party City — declared bankruptcy. Party City and Big Lots, which declared bankruptcy in September, are closing all of their stores.

“If there’s a company out there that was sort of praying for holiday to really save them, my guess is that it probably didn’t save them,” said Isaac Krakovsky, a retail sector leader at the consultancy EY, who is in frequent communication with retail executives. “It probably gave them enough time to limp along for a little further because of the promotional nature of holiday.”

The forecast for the U.S. economy also remains foggy. Some forecasters expect U.S. economic growth in 2025 to be around 2 percent, once adjusted for inflation, which would be a modest slowdown from roughly 2.5 percent growth in 2024. But the International Monetary Fund said on Friday that it expected U.S. economic growth to accelerate slightly this year.

Many analysts are reluctant to see the surprising strength of the holiday shopping season as an indication of how consumer spending might pan out in 2025, given the many uncertainties with the incoming Trump administration and how fiscal policies may affect buying decisions.

“There’s a question mark on what policies are announced in January that could make the consumer think twice before their spending,” said Mickey Chadha, a vice president at Moody’s Ratings. “It could be tariffs, it could be immigration, it could be taxes. There are a lot of different policy changes that could impact the mind-set of the consumer.”

Mr. Krakovsky, the EY consultant, echoed that sentiment.

“We’re not seeing this as an indication of gangbuster growth coming in the next year,” he said. “It’s cautious growth expected in 2025.”