Good morning. Just about everyone is impacted by Trump’s latest tariffs. So are markets as traders figure out their next move. And a Big Tech firm is having a rethink on data centers. Listen to the day’s top stories.

Keeping track of it all. From friend, to foe, Donald Trump’s latest trade salvo impacts just about everyone. Although Canada and Mexico, early targets in the trade war, dodged the new levies. While you were sleeping, a 25% tariff on US auto imports that’s expected to increase costs and upend industry supply chains went into effect. Here’s a helpful list of reciprocal tariffs by country announced by the president yesterday.

Reaction was swift. The European Union vowed to retaliate, while China branded the levies a danger to both global supply chains and economic growth. As for Treasury Secretary Scott Bessent, he offered this piece of advice to America’s trading partners: “ As long as you don’t retaliate, this is the high end of the number.” Meanwhile, the suite of tariffs puts the Federal Reserve in a tough spot as it contends with growth and inflation.

Global financial markets reacted big time as well, while US futures plunged on concerns a full-blown trade war may send the US economy into a recession. Haven assets jumped with gold, again, hitting a record. As this all plays out, here’s what strategists and investors have to say about the trade measures.

Trade wars, tariff threats and logistics shocks are upending businesses and spreading volatility. Understand the new order of global commerce with the Supply Lines newsletter.

Also making news out of DC, Senate Republicans unveiled a budget blueprint designed to fast-track a renewal of Trump’s tax cuts and an increase to the nation’s borrowing limit, ahead of a planned vote on the resolution this week. Bessent indicated that the federal government is at risk of running out of room to make good on all of its payment obligations on time.

Middle East latest. The Israeli army carried out multiple airstrikes in different parts of Syria on Wednesday, including the capital Damascus, and “almost completely destroyed” a military airport in another major city. It’s part of Israel’s plan to degrade the war-torn country’s military capabilities. It comes as Prime Minister Benjamin Netanyahu has instituted a new defense doctrine by building military positions in Syria, Lebanon and Gaza.

Deep Dive: Data Center Rethink

The construction site for Ada Infrastructure’s Docklands data center in London, on April 2. Photographer: Betty Laura Zapata/Bloomberg

Microsoft is pulling back on data center projects around the world, suggesting it's taking a harder look at plans to build the server farms powering AI and the cloud.

• Among the locations affected: sites in Indonesia, the UK, Australia, Illinois, North Dakota and Wisconsin, according to people familiar.
• Some of the money spent will have to be written off. During the first six months developing the Wisconsin project, for instance, Microsoft spent $262 million on construction, of which $40 million went to concrete alone.
• It’s hard to know how much of the pullback reflects expectations of diminished demand versus temporary construction challenges. Some companies are powering ahead, because AI needs more data—one recent example: a $10 billion natural gas-powered data center is underway in Pennsylvania.
• At this juncture, it's worth reminding ourselves just how the AI boom has created the most valuable monopolies in history.
  

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The Big Take

Trump accompanied by Oracle Chairman Larry Ellison, SoftBank CEO Masayoshi Son and OpenAI’s Sam Altman at the White House on Jan. 21. Photographer: Andrew Harnik/Getty Images

Trump's second term has sparked a $1.6 trillion corporate pledge parade, with tech giants promising massive US investments. However, history suggests many of these grandiose commitments may not fully materialize.

Opinion

Japan’s stocks plunged on news of the latest tariffs. Photographer: Kiyoshi Ota/Bloomberg

World leaders will have to keep their cool on Trump’s tariff program, John Authers writes. This isn’t the action of serious people, even though its consequences may be very serious indeed.