Market Beats | Trump Administration Bars Harvard from New Federal Research Funding; Tariffs Trigger Preemptive Car-Buying Frenzy; EU Threatens $113 Billion in Tariffs on US Goods if Trade Talks Fail; OpenAI to Acquire Coding Assistant Startup Windsurf for $3 Billion; India and UK Sign Free Trade Agreement; PwC to Lay Off 1,500 US Employees

—— Tariffs Trigger Preemptive Car-Buying Frenzy; Trump Administration Bars Harvard from New Federal Research Funding; EU Threatens $113 Billion in Tariffs on US Goods if Trade Talks Fail; OpenAI to Acquire Coding Assistant Startup Windsurf for $3 Billion; India and UK Sign Free Trade Agreement; PwC to Lay Off 1,500 US Employees

1. Tariffs Trigger Preemptive Car-Buying Frenzy

Retired Texas teacher Bliss Bednar had no plans to part with her reliable 2023 Volkswagen Atlas—until President Donald Trump’s 25% auto import tariff sent her and millions of Americans scrambling to dealerships. Fearing steep price hikes, she traded in the VW for a $65,000 BMW X3, committing to $500 monthly payments. “I was afraid of tariffs… Then I was like, ‘Maybe I jumped on this too soon,’” she reflected.

Trump’s April 3 tariffs on imported cars and trucks have yet to fully hit dealer lots, but the threat alone sparked a wave of urgency. Financial advisors report a surge in client inquiries, and carmakers have stoked the rush with discounts and pre-tariff promotions. Sales surged in March and April, with Honda and Nissan both reporting double-digit US growth and the annualized selling rate climbing to nearly 18 million vehicles.

Yet economists warn that this fear-of-missing-out buying spree may end in regret. Auto loan delinquencies are rising, and repossessions hit 2.7 million last year—nearly twice 2021 levels. With average new-car loans exceeding 9% and monthly payments topping $730, the financial strain is building. “For some, it’s a prudent move. But for many, the timing could prove painful if a recession hits,” said Fitch Ratings’ Michael Girard.

Automakers are capitalizing on the rush with “employee pricing” promotions and urgent messaging. March saw a 13% jump in US sales for Honda and a 10% rise for Nissan. Annualized auto sales surged to 17.8 million in March and 17.3 million in April, compared to 16 million in all of 2024.

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2. Trump Administration Bars Harvard from New Federal Research Funding

In the latest escalation of its conflict with elite academia, the Trump administration has declared Harvard University ineligible for new federal research grants.

Education Secretary Linda McMahon sent the Ivy League school a formal letter warning that no additional federal funding would be possible unless it demonstrates “responsible management.”

To regain eligibility, Harvard must negotiate with the administration, according to a senior official speaking on condition of anonymity. The move could impact over $1 billion in annual funding, though the administration didn’t disclose a specific figure.

President Trump and his conservative allies have repeatedly criticized Harvard and other elite universities for ideological bias. The administration believes Harvard has failed to address antisemitism, promoted racial preferences, abandoned academic rigor, and become “monolithically leftist,” the official said.

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3. EU Threatens $113 Billion in Tariffs on US Goods if Trade Talks Fail

The European Union is preparing to impose retaliatory tariffs on approximately €100 billion ($113 billion) worth of American goods if trade negotiations with the US do not produce a favorable outcome, according to sources familiar with the discussions.

The proposed measures will be presented to EU member states as early as Wednesday, with a month-long consultation period before finalization. The list, still subject to changes, would significantly expand the EU’s existing tariffs, which already cover €21 billion of US exports in response to President Donald Trump’s steel and aluminum duties.

The European Commission is also expected to present new proposals to Washington this week, aimed at revitalizing talks by suggesting reductions in trade and non-tariff barriers and encouraging more US-bound investment.

Despite these efforts, little progress has been made since formal negotiations resumed last month. The EU warned on Tuesday that Trump’s ongoing tariff probes would bring the total value of EU goods subject to US duties to €549 billion.

While the US recently reduced its “reciprocal rate” on most EU exports from 20% to 10%, the EU granted a 90-day pause before enacting further retaliatory measures.

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4. OpenAI to Acquire Coding Assistant Startup Windsurf for $3 Billion

OpenAI has agreed to acquire Windsurf — an AI-powered coding assistant formerly known as Codeium — for approximately $3 billion, according to people familiar with the matter, marking its largest acquisition to date.

The deal has not yet been finalized, and both OpenAI and Windsurf declined to comment.

The move positions OpenAI to better compete in the fast-growing market for AI coding assistants, which can generate code based on natural language prompts. Bloomberg News previously reported that acquisition talks were underway between the two companies.

Windsurf, whose legal name is Exafunction Inc., was recently in discussions with investors such as Kleiner Perkins and General Catalyst to raise new funding at a $3 billion valuation. The company was last valued at $1.25 billion in a 2023 round led by General Catalyst.

The acquisition is seen as a response to growing competition from rivals like Anthropic and Microsoft’s GitHub, which already offer similar AI tools for developers. Meanwhile, startups such as Anysphere — the creator of Cursor — have also attracted significant investment.

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5. India and UK Sign Free Trade Agreement

India and the United Kingdom have signed a free trade agreement aimed at strengthening economic ties between the world’s fifth- and sixth-largest economies, as President Donald Trump’s tariff-driven trade policies continue to disrupt traditional alliances and supply chains.

“The conclusion of a balanced, equitable and ambitious FTA, covering trade in goods and services, is expected to significantly enhance bilateral trade, generate new avenues for employment, raise living standards, and improve the overall well-being of citizens in both countries,” the Indian government said in a statement on Tuesday. “It will also unlock new potential for the two nations to jointly develop products and services for global markets.”

The deal is politically significant for both UK Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi, as countries increasingly seek to shield their economies from the ripple effects of Trump’s global trade offensive.

For India, the agreement also enhances its appeal as an alternative destination for global investors seeking to reduce dependence on China.

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6. PwC to Lay Off 1,500 US Employees

PwC is cutting approximately 1,500 jobs in the US—about 2% of its 75,000-strong workforce—as the Big Four firm responds to persistently low attrition and realigns its operations.

The cuts are concentrated in the audit and tax divisions, and follow a months-long internal review, according to people familiar with the matter. The firm previously redeployed hundreds of workers to faster-growing areas but has now decided broader reductions are necessary.

“This was a difficult decision, and we made it with care, thoughtfulness and a deep awareness of its impact,” PwC said in a statement.

Employees were informed via time-sensitive Microsoft Teams invites. Many of those affected were recent hires, with one employee who joined in September describing the move as “devastating.” Another noted that staff expecting promotions were instead let go.

This is the second major round of layoffs led by US Senior Partner Paul Griggs, who last September cut 1,800 jobs during a restructuring of the firm’s technology and products division.

PwC will also reduce campus hiring this year but plans to honor job offers previously extended to interns.

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7. US Mortgage Rates See Biggest Weekly Jump in a Year, Threatening Spring Home Sales

US mortgage rates rose for the first time in four weeks, posting the largest weekly gain since April 2024 and threatening to cool the housing market during the crucial spring buying season.

The average rate for a 30-year fixed loan climbed to 6.83% from 6.62% the previous week, Freddie Mac said in a statement Thursday.

The surge comes as global tariff tensions — particularly between the US and China — have rattled equity markets and pushed up yields on 10-year US Treasuries, which serve as a benchmark for mortgage pricing.

“When [the 10-year yield] rises, mortgage rates typically follow suit,” said Jiayi Xu, an economist at Realtor.com. “Looking forward, competing economic forces are pulling mortgage rates in opposite directions, making it increasingly difficult to predict where they’ll land.”

Demand is already showing signs of weakening. According to data from Redfin Corp., home-purchase contracts in the four weeks ending April 13 fell 0.8% from a year earlier.

“Consumers are feeling anxious about the economy and the rising cost of living, potentially leading them to adopt a ‘wait-and-see’ approach regarding significant purchases like homes,” said Kara Ng, senior economist at Zillow Home Loans.

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