Trump Drops 25% Tariffs on Cars & 'Family Dollar' Sold for $1B

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0:27Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Toyotathon is on hold after President Trump announced 25 % tariffs on foreign cars. Then Dollar Tree is offloading Family Dollar for$1 billion. It's Thursday, March 27th. Let's ride.

0:48In today's edition of Wanna Feel Old, The Office premiered on NBC 20 years ago this week, and the nostalgia marketing is in full swing. The restaurant chain Chili's, which played a major role in The Office, announced it would open its first location in the show's setting of Scranton, Pennsylvania on April 7th. But it won't be any old Chili's. It'll have chalk art mural decor that matches Chili's locations in the early 2000s, pay homage to the chain's many cameos on the show, and Brimback, the awesome blossom onion appetizer that was pulled from menus in 2008. Of course, several members of The Office cast are being enlisted in an ad campaign.

1:27Toby, will you feel God in that Chili's? I mean, everything Chili's touches these days turns to baby-backed gold. Sales at restaurants opened for at least a year, about 31 % last quarter. That is the third straight quarter of double-digit growth. Remember the triple-dipper appetizer that went viral on TikTok? Mozzarella sticks pulling apart. It's still powering sales growth. And in 2023, Chili's actually brought back its I want my baby-backed, baby-backed, baby-backed ribs commercial. So clearly they are leading into this nostalgia vibe, which is super in right now. And I do tell you what, Neil, I actually do feel God in this Chili's tonight.

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3:26dot com slash campaign. Terms and conditions apply. Hope you're either making plans to move to a walkable city or are ready to learn how to fix a transmission because it's not going to be cheap to buy a new car in the coming months. Yesterday, President Trump announced that he's slapping a 25 percent tariff on all imported cars and auto parts, betting that Americans are willing to stomach higher sticker prices today for the promise of the domestic auto market roaring back to life tomorrow. Speaking from the Oval Office yesterday, Trump said the move is meant to supercharge U.S. auto manufacturing and deliver, quote, tremendous growth and revenue for the U.S.

4:02The pitch is simple. If you build in the U.S., you dodge the tariffs. Import, you gotta pay up. Here is where we'll add the necessary disclaimer that, yes, he could change his mind and roll these back. But Trump did make it clear yesterday that these tariffs are, quote, permanent no matter what. Still, if you're finding it hard to take him at his word, that's understandable. The big three automakers in the U.S., GM, Ford, and Stellantis, were previously granted a one-month exemption for vehicles that comply with the USMCA trade deal, a grace period that has now expired. The move will hit a big chunk of the U.S.

4:35auto market. About 45 % of all light vehicles sold here are imports, including 3.6 million built in Mexico and Canada, and another 3.7 million shipped in from Japan, Korea, and the EU. As to be expected, auto stocks slipped about 5 % in after-hours trading as Wall Street Digest said the reality of more expensive cars and potentially disrupted supply chains. Neil, these are set to go into effect next week on April 3rd. Should we all buy a bike? I mean, I'm always advocating for more biking. Analysts at Wedbush Securities called this a hurricane-like headwind that is about to rock the global auto sector, sending the average car price in the United States, up between$5 ,000 and$10 ,000.

5:19Nearly half of all new passenger vehicles sold in the U.S. were assembled outside the U.S. And then vehicles assembled in the U.S. contain nearly 60 % of foreign-sourced parts. So when you're talking about all those parts crossing borders from Mexican factories to American factories and back to Canada, before they're finally at your dealer's lot, every single time that crosses the border, That is going to get hit with a 25 percent tariffs. Auto industries, auto companies globally are set to have$75 billion in annual costs loaded up upon them, according to Bernstein. And they are going to pass along those costs to customers.

5:56Trump and the Trump administration kind of acknowledges that there might be short-term disruption for their long-term goal of bringing—of, you know, supercharging the domestic auto manufacturing industry, but that's just not how this global auto supply chain has worked over the past few decades under free trade agreements, where you have factories spread out across the world, across North America, especially without any tariffs. Right. You're correct in the fact that the auto industry is global, and it's almost been designed like that. Certain countries specialize in different parts for different types of cars, and it has been built on this assumption that there would be little to no tariffs.

6:35So that is why we say this is a big supply chain disruption coming because it just undermines what has been, you know, the global norm over the last few decades. Which companies are going to be the most affected like this? You look at companies like Volvo, Mazda, Volkswagen. These have the lowest percentage of parts assembled in the US. Then you look at companies like Rivian, Tesla, Ford. Those are at the top end of domestic manufacturers who source and build most of their cars inside the United States. So you'll kind of see these auto company stocks even out over the coming days as the market digests which companies are better prepared to withstand this tariff wrench that's been thrown into their supply chains.

7:16These tariffs did have some supporters. And one powerful group that said they endorsed these tariffs is the United Auto Workers Union. Sean Fain, who's the head of that union, said the tariffs would end the free trade disaster that has devastated working-class communities for decades. It ends the race to the bottom in the auto industry, fixes broken trade deals. So, labor unions in the United States, who represent auto workers, applauded this. Meanwhile, on the other side of the border, Canadian Chamber of Commerce and other Canadian politicians were absolutely irate, as they have been over tariffs for months.

7:54Doug Ford, the premier of Ontario. Ontario is the bastion of the Canadian auto industry, employs a million people, said he wants to inflict as much pain as possible on Americans while protecting Canadian jobs. So we're starting to see a trade war play out where the United States slaps tariffs on other countries and then they retaliate on the United States. And then finally, just to zoom out, we've said, look at that April 2nd date. That's the day the The administration says they will unveil these reciprocal tariffs on a much wider range of imports. Those April 2nd tariffs, though, have been kind of being soft launched as not being as bad as most expect.

8:32Yesterday, Trump said the announcement would be, quote, conservative. So it seems like the White House is kind of trying to downplay what might happen on that early April date. Sometimes$1 plus$1 doesn't equal$2. sometimes it equals negative$8 billion actually, which is a result of the ill-fated tie-up of Dollar Tree and Family Dollar that is now officially coming to an end. Dollar Tree is closing the chapter on its acquisition of its once rival chain, offloading the brand for$1 billion to a pair of private equity firms. Dollar Tree originally bought Family Dollar for$9 billion, looking to add scale in order to take on bigger rivals, but also to keep it out of the hands of another rival chain, Dollar General, a decade ago.

9:15The plan seemed sound enough at the time, especially since dollar stores were all the rage coming out of the financial crisis in 2008, as Americans were looking to pinch their pennies. Plus, Dollar Tree mainly targets suburban middle-income shoppers, while Family Dollar is more entrenched in urban communities, so the synergies were supposed to synergize. But messy stores, rising prices, and overexpansion ended up hampering the acquisition, leaving Family Dollar vulnerable to competition from mega chains like Walmart and Amazon. Neil, I tell you one thing. If I had a dollar, for how many times I just said dollar in that intro, I could buy Family Dollar myself.

9:52You could. I mean, this sale price is much lower than what it was bought for 10 years ago. Family Dollar is just kind of a disaster of a business. It recorded an operating loss of$1.8 billion in the latest fiscal year, closed 1 ,000 of its locations last year. It also got this record fine from the DOJ for$42 million for violating safety standards after it was found to have sold items that were stocked in a rat-infested warehouse. So absolutely nothing went right for Family Dollar after Dollar Tree bought it in 2015. and we've all felt this feeling of a weight being lifted off of our shoulders where we had a tough conversation and now we don't have to do it anymore and selling family dollar by Dollar Tree is exactly what that is.

10:42And I thought you were going to say we all felt the feeling of walking to a dollar store and realizing that, wait a second, nothing really costs a dollar anymore. I mean, their prices range all the way up to products that are$10. Dollar Tree is actually looking to boost its business by closing some underperforming stores. getting rid of family dollar, but also leaning into more pricey items like costs in that$7 range. So it's just a different industry or a different playing field that these companies are operating in right now because there is kind of this existential threat facing this entire dollar store industry.

11:15It's been under pressure from inflation over the last few years, low-income shoppers. I've also felt a lot of pressure to just afford basic necessities, and increasingly they're opting for bigger chains like Walmart. So as low income Americans fortunes have kind of grown worse over the last couple of months and years, more shoppers are kind of opting to skip even on those basic necessities, which obviously proves to be not great for the business for these dollar stores. When you hit the bars with your banker friends this weekend, they are buying the first round and probably the second. Average Wall Street bonuses surged 34 percent to a record $47.5 billion, according to the New York State Comptroller.

11:56It's the first significant increase in bonuses since the COVID pandemic and reflects the 90 % jump in Wall Street profits last year. A bigger pie means bigger slices for each worker. The average annual bonus per Wall Street employee jumped by about a third to nearly$245 ,000, about three times the median annual income in the United States. This is all great news for bankers, of course, but it's also great news for finance obsessed New York City, where one in 11 workers are tied directly or indirectly to the securities industry. Wall Street workers have to pay taxes on those bonuses and they'll send$600 million more in state income tax revenue and$275 million more for the city compared to 2023.

12:40Those numbers are closely watched by the state's money counters because New Yorker New York receives 19 % of its taxes from Wall Street alone. Whether the good times will last is unclear. The New York comptroller warned that, quote, increasing uncertainty in the economy amid significant federal policy changes may dampen the outlook for parts of the securities industry in 2025. So maybe you grab the third round. I do want to dig into how the comptroller calculates these bonuses because it's pretty interesting. Basically, they only are reflecting cash bonuses from 2024 and deferred bonuses from previous years that have been cashed in.

13:18So technically, the comptroller's 2024 figures are actually representative of previous year's bonuses because they probably understate the total because most bonuses as you move up the food chain in Wall Street are not paid in cash, but they're actually paid in deferred stock. A managing director, for instance, might get 50 % of its bonus in deferred stock. So by only measuring cash, you're actually undercounting a lot of what these bonuses are actually coming in at. But on the other hand, they might overstate the total as well, because as you said, bank stocks had this huge run up in 2024. So maybe a lot of these directors are looking at their deferred stock bonuses going, this is the time to cash in.

13:58I mean, JP Morgan had an incredible year last year. They're up over 50 or sorry, Goldman Sachs is up over 50 percent over the past year. So if you're sitting there with all this deferred stock, of course, you're going to cashed in as the market kind of reaches a frothy level. So it's a little more complex than just saying record bonuses. All these people are getting$244 ,000 in cash into their bank accounts. It's got more nuance than that. It's got more nuance, but the bottom line is that the banking sector did really well last year, and people were paid handsomely for that. The question now turns to this year is, can this run last?

14:34You mentioned the banking index was up a ton last year. All these banks scored record profits, JPMorgan record profits. But the start of the year has been a little slower than expected. And you have recruiters and other people in the HR industry around finance saying maybe there could be some job losses if the deal making doesn't pick up as expected. Deal volume in the US was actually down 0.7 % this year so far compared to the same period last year. If you take out Google's acquisition of Wiz, which is$32 billion. The deal volume is actually down 9 % from the previous year. So investment bankers are hoping that the deal activity starts to pick up as expected this year because that will lead to even more bigger bonuses next year.

15:20Up next, we got more numbers, courtesy of Neil, coming your way.

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16:40You should not receive a live vaccine when treated with EPCLIS. Before starting EPCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call 1-800-LILY-RX or 1-800-545-5979. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will shock you more than the two brothers on White Lotus. For my first number, if it feels like everyone you know is talking about the government's signal group chat, they are. The Atlantic story describing how its editor was mistakenly included in a group chat where officials planned an attack in Yemen has easily become the top news story of the year globally, according to Axios.

17:19The article, headlined, The Trump administration accidentally texted me its war plans, has the most social media engagement of any English language article of 2025 since it was released on Monday, likely due to its shock factor, implications for national security, and extreme memeability. It's great news for The Atlantic, the 167-year-old magazine that's had trouble evolving its business model as the news industry went from print to digital. Well, having an article go nuclear is one way to make money. A spokesperson for The Atlantic told Axios this story was one of the top subscription driving stories for the magazine of all time.

17:58New subscribers probably kept rolling in yesterday because The Atlantic published a new article with more messages from the group chat after Trump administration officials claimed the text contained no classified information. Obviously, this story was a bombshell, but it is just a continuation of a pretty big transformation the Atlantic has undergone over the last few years. Coming out of the pandemic, traffic started taking a nosedive as people just ventured out into the real world. Laureen Powell Jobs, who is the Atlantic's owner, was ordering company leadership to basically figure it out, dig the company out of a hole.

18:29And part of that turnaround strategy was raising subscription prices by 50%, making it harder for readers to read stories without paying, which sounds counterintuitive. But they also made this switch from day-to-day news coverage to diving much deeper into stories. Couldn't be us. We are day to day for life. But they were kind of leaning into these more deeply reported stories. So they saw the revenue grow 10 % in 2023, reached$100 million. They also signed this really great distribution deal with Apple News Plus. So all of a sudden, all these factors came together. And obviously, the story and the headline was a huge part of it.

19:05But they kind of set themselves up for success with the groundwork they laid over the previous months. For my next number, a Netflix series has broken a major television industry barrier, becoming the first streaming show to top the UK's most watched TV charts. If you guessed the show is Adolescents, bingo, that's the one. This four-part series, launched two weeks ago, has taken the UK and the world by storm over its unsparing portrayal of a 13-year-old boy suspected of killing a female classmate and the role smartphones may have played in radicalizing the boy. Adolescence impact has been felt well beyond the Netflix top 10 list, entering the broader conversation around kids going down social media rabbit holes.

19:46Since the show was released, the UK's education secretary said she would begin researching what a smartphone ban in English schools might look like. Prime Minister Keir Starmer even weighed in, mentioning that he was watching the show with his two kids at home and vowed to take action to address the, quote, fatal consequences of young men consuming harmful content online. Toby, the co-creator of Adolescence, Jack Thorne, has made a couple of shows now hoping to stir political debate. He's found that a major commercial success with this one. Yeah, this is absolutely a show that is meeting the moment where it's at right now.

20:18I mean, look at all the laws that are on the books right now in relation to children in social media. Last year, Australia banned children under 16 from social media. Denmark is also looking to ban smartphones in schools. France has already implemented a similar law in their country. So this is clearly kind of the topic du jour of the moment when it comes to kids in smartphones. And I will say, too, Britain in general tends to love taking their how to think from TV shows. Because remember in 2024, there was this show called Mr. Bates versus the Post Office, which left a lot of real poster workers very angry who were wrongly convicted of theft.

20:59and that actually led to a law to exonerate them. So we are seeing this pipeline of television show comes out, people in the UK react, and then something happens in real world and it looks like we're seeing that pattern repeated with adolescents. My final number is a jarring indication of just how professionalized college sports has become. As the Sweet 16 for the Men's Basketball Tournament tips off today, only three of the 16 teams remaining have more than three starters who began their college careers at their current schools. And that's because NIL and the booming transfer porter are incentivizing players to switch teams so they can secure more money, similar to how free agency plays out at the professional level.

21:38In college, that means players typically leave a smaller school for a much wealthier program. Maybe Florida Atlantic University offers the best example of this. This team was an incredible Cinderella story of the 2023 men's tournament, making it to the Final Four as an underdog nine seed. That team's three leading scores and its head coach are all in March Madness this year, just on different teams. Head coach Dusty May and one player left for Michigan, another went to Arkansas, and another decamped for Florida. Toby, this explosion in transfers is the real March Madness. By the way, it's kind of working out just fine for the NCAA right now because the first weekend of the men's tournament, most watched since 1993, the first round of the women's tournament, second most watched ever behind Caitlin Clark's season from last year.

22:25So clearly people are still tuning in. Everyone thinks that the beauty of March Madness lies in unknown players who become these tournament legends, unknown schools who make these big runs, but also seeing major schools match up against each other in really good matchups is also very entertaining and very compelling, you know, just based on these viewership figures. Do we really need to see, you know, St. Peter's getting blown out a few rounds later? Is that better than seeing some of the best teams in the country going up? That's maybe a pessimistic take, but it is a take that I think is reflected in the viewership that we saw.

22:55Yeah, I guess the problem or the existential question is what happens to these smaller schools when all of the bigger ones can just gobble up all of their players after this season? I mean, the transfer portal, sorry, it's a hard word to say, opened this week, in which players can announce their intention to switch schools. already in just a few days 1 ,300 men's college basketball players have signaled interest to change teams so next season we're going to see all these players who are on all these teams switch and they might probably they'll probably go to the wealthier schools that can pay them NIL deals and it'll lead to a situation right now in the men's tournament where the Sweet 16 comprises of only four conferences which is the first time that has ever happened I don't blame the players either.

23:40I mean, a lot of them are not going to make it to the NBA. So get the NIL deal, you know, start your career with some money. Like there's a lot of coaches are saying this, like we understand why you are making these jumps, but you're also not seeing a lot of major conference schools dropping down players anymore. They're more willing to ride the bench at a high major because they're getting an NIL deal rather than go in search of more playing time. So the whole landscape is shifted. I think this tournament was finally a culmination of a lot of factors that have been kind of brewing over the last few years.

24:10Well, you finally made it to the best time of year if you are specifically Neil Andrew Fryman, opening day for the MLB. Technically, the season kicked off in Japan last week, but the first pitches on U.S. soil are being thrown today, and some of those pitches are being thrown in new, much smaller ballparks. Two teams, the A's and the Rays, are caught in MLB purgatory, forced to spend the 2025 season in minor league facilities as they wait for major resolutions on a pair of real estate issues. For the Athletics, their temporary homelessness comes after trying for 20 years to build a new stadium in the Bay Area.