☕ Why Elon is stepping back

Good morning!

Here’s a new way to increase a crypto coin's value: invite the largest 220 holders to dinner.

That’s the approach President Trump has taken with his $Trump meme coin, which rocketed in price after an invitation to the 220 biggest stakeholders in the coin to dinner with the President was posted online.

The coin went up about 70%, and now sits at about $11.66 - still well off its January high of more than $74.

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Some headlines from this morning:

• India has closed its border with Pakistan after gunmen killed 26 tourists in Indian-administered Kashmir on Tuesday. The Indian government has also suspended water sharing agreements and expelled Pakistani diplomats, demanding its neighbor stop "support for cross-border terrorism." Pakistan denies any involvement with militants operating in Kashmir, though India suggests they are indirectly responsible.

• A 6.2 magnitude earthquake has struck just off the coast of Turkey's capital, Istanbul. While the quake caused minimal damage and no deaths, the following panic injured over 230 people. The earthquake occurred in the Sea of Marmara, about 70km west of Istanbul. More than 100 aftershocks were felt throughout the city, which remains traumatized following a devastating 7.8 magnitude earthquake that hit southern Turkey last year, killing more than 50,000 people. Turkey sits near the intersection of two major fault lines, making it particularly vulnerable to seismic activity.

• President Donald Trump has criticized Ukrainian President Volodymyr Zelenskyy for rejecting a U.S.-proposed peace deal, saying Zelenskyy can "have Peace or, he can fight for another three years before losing the whole Country." The rejected peace proposal would have required Ukraine to give up territory seized by Russia, accept a veto on joining NATO, and recognize Russia's control of Crimea. Trump's comments follow recent U.S. threats to withdraw from peace negotiations unless an agreement between Russia and Ukraine is reached soon.

• Senator Dick Durbin, the second highest-ranking Democrat in the U.S. Senate, has announced he will not seek reelection after almost 44 years in elected politics. The announcement has prompted speculation about who will replace the five-term senator in his Democratic Illinois seat. Durbin's departure creates a vacancy for the position of Democratic whip, a key leadership role responsible for ensuring party members vote together on important legislation.

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President Trump and Secretary of Commerce Scott Bessent have indicated that a trade deal with China could be possible, potentially reducing the US's 145% tariffs on Chinese imports "substantially."

China has responded that the "door is wide open" to a trade deal, suggesting it might lower its retaliatory 125% tariffs on American goods. U.S. and global stocks have rallied in reaction to the news, although a final agreement remains uncertain.

Background

The current trade tensions began on April 2, dubbed "Liberation Day," when President Trump announced sweeping tariffs on all U.S. trade partners. The move was aimed at rebalancing trade deficits and bringing manufacturing back to the United States. Initially, U.S. tariffs on Chinese imports totaled 54% after these announcements.

China responded with its own tariffs on U.S. goods, triggering a series of retaliatory increases from both countries throughout April. By the end of this escalation, U.S. tariffs on Chinese goods had reached 145%, while Chinese tariffs on U.S. products stood at 125%. U.S. stock markets fell sharply with each escalation as investors worried about reduced trade with one of America's largest trading partners.

Trade deal

This week, the US Treasury Secretary announced that an upcoming meeting with Chinese officials presents an opportunity for a "big deal" between the two economic superpowers.

This follows comments made by Bessent and the President earlier this week, indicating the US would be open to a mutual lowering of tariffs before a trade deal with China was negotiated.  

Bessent clarified that any potential deal must involve China becoming less dependent on manufacturing while increasing America's manufacturing capacity. The prospect of easing tensions between the world's two largest economies has encouraged investors to return to the stock market, with the S&P 500 rising by 1.5% yesterday after weeks of overall negative performance.

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Elon Musk will scale back his involvement in the Department of Governmental Efficiency (DOGE) after Tesla's profits plunged by 71% since the start of the year.

Musk has devoted much of his focus in 2025 to assisting the Trump administration, drawing criticism from investors who believe he is neglecting his companies. His reduced role at DOGE raises questions about the department's continued influence and effectiveness.

What is DOGE?

DOGE was established by President Trump shortly after his election to "slash excess regulations and restructure Federal Agencies."

The department claims it has saved the government $US130 billion so far, though Musk initially aimed to save taxpayers up to $2 trillion before later revising this estimate.

DOGE's efforts have led to 56,000 federal employees resigning, accepting redundancy payments, or being fired.

Musk’s role

Officially, Musk serves as a "special government employee," a specific category for temporary workers limited to 130 days of federal service per year.

His term in this capacity is set to expire in late May, with Musk recently stating that the organization's work was "mostly done."

What does Tesla have to do with this?

Tesla, Musk’s electric vehicle manufacturer, has faced public backlash against Musk's politics. Since the beginning of the year, boycott campaigns and vandalism of Tesla products have become widespread. The company has also been hit by increased competition from Chinese manufacturer BYD and the ongoing US-China trade war.

Investors in Tesla and Musk’s other companies became concerned that Musk was focused on his voluntary government job and not on company growth.

With Tesla's profits down 71% and its stock value decreased by over a third this year, Musk announced to investors that he would reduce his work at DOGE to just a few days a week. He pledged to remain involved "as long as the president would like [him] to do so and as long as it's useful."

Who will run DOGE now?

The future of DOGE without Musk's full-time involvement remains uncertain.

Reuters has reported that his reduced presence at the White House may allow cabinet-level secretaries to regain control over hiring and firing in their departments, potentially diminishing DOGE's overall influence within the administration.