US stocks drop slightly in 1st trading since Trump’s auto tariffs announced

(NEW YORK) — While some companies are steering away from diversity, equity, and inclusion (DEI) policies, others are sticking with their previous commitments.

Leaders at Goldman Sachs, Costco and JPMorgan Chase & Co have recently spoken out in support of their diversity programs, as anti-DEI activist shareholders continue to push proposals that would roll back company policies.

Costco’s Board of Directors unanimously voted Thursday against a proposal from the National Center for Public Policy Research that had called for Costco to evaluate and publish a report on any risks that may be associated with the company’s diversity and inclusion efforts, according to a Jan. 23 shareholders meeting statement.

“Our efforts around diversity, equity and inclusion follow our code of ethics,” the board statement on the proposal stated. “For our employees, these efforts are built around inclusion – having all of our employees feel valued and respected. Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.”

The board argued that its diversity programs comply with the law, and defended its commitments to diversifying its supplier base — including special attention to small businesses. The board statement ultimately argued the proposal reflected a “policy bias.”

Costco representatives have not responded to ABC News’ request for comment.

Amid ongoing pressure over its DEI initiatives, a Goldman Sachs spokesperson told ABC News in a statement: “We strongly believe that organizations benefit from diverse perspectives, and Goldman Sachs is committed to operating our programs and policies in compliance with the law.”

Goldman Sachs representatives directed ABC News to a Jan. 22 interview with CNBC from CEO David Solomon, in which Solomon said that the financial services company is looking at these issues “through the eyes of our clients.”

He added, “They think about decarbonization, they think about climate transition,” he said. They think about their businesses, how they find talent, the diversity of the talent they find all over the world. You know we operate a big global business and we serve global clients everywhere. We think about these issues through the lens of, how do we help our clients navigate these things? And we continue to stay focused on talking to our clients and doing the things we’ve always done.”

The company has come under scrutiny for its stated commitments to racial equity, gender equality and increasing diversity. Strategies listed on its website include expanded recruitment efforts, pay gap data collection, aspirational hiring goals and career development programs.

JPMorgan Chase CEO Jamie Dimon, in an interview with CNBC, said he’s “very proud of what we’ve done.”

“We will continue to reach out to the Black community, the Hispanic community, the veterans community, LGBTQ, we have teams with second chance initiatives — where I go, with blue states, red states, governors, they like what we do,” said Dimon.

JPMorgan Chase did not respond to request for comment.

DEI initiatives, according to ABC News interviews with DEI experts, are intended to address and correct discriminatory policies or practices that may be found within an organization. Experts told ABC News that some examples of DEI initiatives include: implementing accessibility measures for people with disabilities, addressing gender pay inequity, mitigating bias in hiring and recruitment practices, and holding anti-discrimination trainings and more.

Several other companies across industries — including Amazon, Meta and McDonalds — have stepped back and ended their diversity and inclusion initiatives that were largely pledged after the police killing of George Floyd and subsequent protests against racial inequality.

The reversal comes amid ongoing anti-DEI action from conservative politicians, who have implemented policies restricting diversity and equity programs in government, colleges, universities, and more. After taking office this week, President Donald Trump signed an executive order dismantling DEI programs in the federal government.

In an interview with ABC News, Ethan Peck, deputy director for the National Center for Public Policy Research’s Free Enterprise Project, said that diversity programs pose risks to shareholder value, as they may invite lawsuits from those claiming to have been discriminated against based on recent arguments made against affirmative action.

Some legal experts disagree, arguing that repealing DEI policies could leave companies vulnerable to potential lawsuits from marginalized groups alleging discrimination.

Peck, whose group mounts campaigns to pressure companies to disband DEI programs, argued that diversity programs sacrifice “excellence and innovation,” but said he did not provide examples of employment discrimination at these companies.

“Eventually you will drop DEI, and it’s better for your shareholders if you do it sooner rather than later,” said Peck, who noted that Boeing and John Deere were faced with similar proposals and later dropped their diversity, equity and inclusion programs.

“I believe that this is a fad,” he said.

Anti-DEI activists also argue that “aspirational” goals for increasing diversity and representation are a guise for quotas, which are largely considered illegal, according to the Equal Employment Opportunity Commission.

“You can be fair in hiring and promotions with candidates of all backgrounds and perspectives without resorting to quota systems and considerations based on immutable characteristics,” said Paul Chesser, the director of the Corporate Integrity Project at the National Legal and Policy Center, in an emailed statement.

Christie Smith, former vice president of inclusion and diversity at Apple and C-Suite adviser, argued that DEI commitments instead increase shareholder value.

DEI has prompted “increased innovation, increased growth in these organizations, increased opportunities in startup organizations, which mostly women and people of color are at, starting these kinds of companies and growing our economy in that way,” she told ABC News.

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(WASHINGTON) — Autoworkers, farmers and alcohol distillers are among a set of U.S. workers who risk losing their jobs as a result of potential tariffs on Canada, China and Mexico, experts told ABC News.

The U.S. president was expected to sign executive orders on Tuesday putting in place the 25% tariffs on goods from Mexico and Canada and 10% tariffs on those from China, according to the White House.

Trump announced on Monday that the proposed tariffs on most goods from Canada and all products from Mexico would be paused for one month, putting the policies on schedule to take effect in early March. The postponements came following conversations Trump had with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau. Trump said Monday afternoon he plans to talk to China in the next day or two about tariffs on that country.

Some U.S. shoppers and economists have raised alarm about the potential for tariff-driven price increases, since importers typically pass along a share of the cost of the higher taxes to consumers.

A lesser-known effect of the potential tariffs, however, could arise as some retailers struggle to sell imported goods at competitive prices while manufacturers reckon with higher costs of raw materials such as car parts and lumber, experts said. Sales could wobble, they added, leading directly to job cuts.

Potential retaliatory tariffs slapped on U.S. exports could prove another cause of layoffs, the experts said, since U.S. firms dependent on selling products overseas risk weakened performance.

“It’s like Trump took a grenade and threw it into the economy, and he walked away to see what happens,” Rob Handfield, professor of operations and supply chain management at North Carolina State University, told ABC News.

The Trump administration did not immediately respond to ABC News’ request for comment.

In a series of social media posts over the weekend, Trump said the tariffs target Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the United States. In a Truth Social post on Sunday, Trump urged the three countries to address his concerns, while acknowledging the tariffs may cause some financial hardship within the U.S.

“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” Trump wrote.

In recent days, some trade associations and labor unions voiced warnings about tariff-related job losses.

Jay Timmons, president and CEO of the National Association of Manufacturers, said small- and medium-sized firms in the sector employing millions of Americans risk “significant disruptions” as a result of potentially high energy prices and costly supply chain workarounds.

“Manufacturers will bear the brunt of these tariffs,” Timmons said, adding that the policies would put “American jobs at risk.”

Distilled Spirits Council, a trade association representing alcohol makers across North America, cautioned that tariffs would harm business in all three countries. “Maintaining fair and reciprocal duty-free access for all distilled spirits is crucial for supporting jobs and shared growth,” the group said.

The risks for U.S. workers are perhaps best demonstrated by the auto industry, which employs about 4 million people, experts said.

U.S. automakers hold deep ties to Canada and Mexico, since products often snake back and forth between the countries before a car reaches full assembly, Christopher Conlon, a professor of economics at New York University who studies trade, told ABC News.

Mexico and Canada make up the top two U.S. trading partners for both finished motor vehicles and car parts, according to a Cato Institute analysis of data from the U.S. International Trade Commission.

“The supply chains involve shipping parts back and forth over the border five times, six times, seven times. If every time a part crosses the Canadian border it gets taxed at 25%, that will add up really quickly,” Conlon said, noting the added costs could hike car prices by as much as $10,000 and, in turn, weaken sales.

“The companies will have to scale back production, and that will mean fewer shifts,” Conlon added.

The production slowdown may lead to job cuts at companies indirectly impacted by the tariffs, such as car dealerships and auto-part sellers, experts said. More than 550,000 workers at car dealerships representing international brands risk losing their jobs if the industry falters due to the tariffs, the American International Automobile Dealers Association told ABC News in a statement.

To be sure, employment may grow in some domestic industries protected by the tariffs, such as the steel and energy sectors, some experts said. Even those businesses, however, may contend with challenges if the tariffs limit consumer demand, they added.

Potential job gains in some sectors would not outweigh the losses in others, Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.

“It’s very difficult to see a net positive of this in terms of employment for the U.S.,” Miller said.

ABC News’ Ben Siegel contributed to this report.
 

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(NEW YORK) — Canada vowed to respond with retaliatory tariffs if President Donald Trump slaps additional levies on Canadian goods as part of an expected announcement of sweeping new tariffs on Wednesday.

“We will respond to additional measures,” Canadian Prime Minister Mark Carney told reporters on Tuesday. “We will put in place retaliatory measures if there are additional measures put against Canada tomorrow.”

The Trump administration last month imposed 25% tariffs on some goods from Canada. Initially, the tariffs applied to all Canadian goods, but a day later Trump issued a carve-out for goods compliant with the United States-Mexico-Canada Agreement, or USMCA, a free trade agreement.

In response to U.S. tariffs, Canada slapped a 25% retaliatory duty on $30 billion worth of goods and pledged additional measures.

Despite the trade turbulence on Tuesday, U.S. stocks rallied.

The Dow Jones Industrial Average ticked up 30 points, or 0.1%, while the S&P 500 climbed 0.4%. The tech-heavy Nasdaq increased 0.8%.

Trump told reporters at the Oval Office on Monday that he had settled on a course of action for the fresh round of tariffs set to take effect on April 2, though he declined to offer details.

Additional U.S. tariffs could elicit countermeasures from trade partners, exacerbating global trade tensions that erupted in response to a previous set of tariffs issued by the Trump administration last month.

Europe has a “strong plan” to retaliate against Trump’s planned tariffs, Ursula von der Leyen, president of the European Commission, said in a speech on Tuesday.

“We will approach these negotiations from a position of strength. Europe holds a lot of cards, from trade to technology to the size of our market,” von der Leyen said.

Days earlier, Trump told reporters over the weekend that his tariffs could affect “all the countries.”

“The tariffs will be far more generous than those countries were to us, meaning they will be kinder than those countries were to the United States of America,” he said.

This is a developing story. Please check back for updates.

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