What We Learned This Week

Tariffs Hit Hard: The headline story this week is tariffs—full stop. After months of speculation and mounting anticipation, the Trump administration officially unveiled its “liberation day” trade policy shift. The result: sweeping reciprocal tariffs that were more aggressive and far-reaching than many expected. A 10% baseline tariff will now apply to all imported goods, with some countries seeing rates escalate to over 50%. It’s a major departure from the status quo and signals a significant reset in U.S. trade strategy.

The administration’s goal is clear—protect American businesses from what it sees as unfair trade practices and government-subsidized competition abroad, while also addressing the trade deficit and, eventually, the national debt. The logic is simple: the U.S. is a net buyer in global trade, and this policy is an attempt to flip the leverage. Whether one agrees with the strategy or not is beside the point—it’s happening, and markets, companies, and consumers will now need to adjust. In the near term, expect heightened volatility: prices will rise, stocks (particularly those with heavy China exposure) may come under pressure, and headlines will be loud. But this risk has been looming for months, and now that it’s here, markets will begin the process of pricing it in and moving forward. It’s a big moment, but not the end of the world.

Litigation Drags On: A U.S. judge this week rejected Johnson & Johnson’s latest attempt to resolve tens of thousands of lawsuits tied to its talc-based products through bankruptcy—marking the third time this legal strategy has failed. The company had tried to isolate its legal liabilities by transferring them to a newly created entity and then having that entity file for bankruptcy. The goal was to cap financial exposure and resolve claims through the bankruptcy process, a tactic previously used by other firms in mass tort cases. Opponents argue the move shields J&J from full accountability and limits the compensation victims could otherwise receive through traditional litigation.

With over 60,000 claims still outstanding, J&J faces significant and growing financial exposure tied to allegations that its talc products caused ovarian cancer. The company was willing to commit nearly $10 billion to resolve the matter through its bankruptcy plan—roughly $75,000 to $150,000 per claimant—but will now return to court to fight what it maintains are meritless accusations. The stock dropped nearly 8% on the news, another hit in a long saga that continues to weigh heavily on investor sentiment. Despite otherwise strong business fundamentals, the overhang from this litigation has capped J&J’s stock performance for years, frustrating shareholders every time resolution appears within reach, only to fall apart. Feels a bit like our favorite commercial aircraft manufacturer.

Switch 2 is Official: Nintendo officially unveiled the long-awaited successor to its blockbuster Switch console this week. The Switch 2, priced at $450 and set for a June 5th release, features improved performance and new capabilities aimed at building on the original’s massive success. With over 150 million units sold since its 2017 debut, the original Switch became the third best-selling console of all time and drove a huge rally in Nintendo shares—until recent years when sales slowed and the stock cooled. Anticipation for the new release has reignited investor interest, sending shares to all-time highs in recent weeks.

Nintendo’s strategy has always been different from rivals Sony and Microsoft, focusing less on top-tier graphics and more on proprietary IP and a fun, approachable user experience. That positioning has made it somewhat of an outlier in today’s increasingly cloud-based, cross-platform gaming world. The challenge now will be convincing casual gamers to pay a premium—$150 more than the original—for a follow-up console, especially given Nintendo’s mixed track record with second-generation devices. But if any company knows how to build community and deliver nostalgia-driven excitement, it’s Nintendo. This launch will be a key test of whether their distinct approach still resonates in a changing industry.