Good morning. Donald Trump’s Treasury secretary Scott Bessent supports universal tariffs starting at 2.5 per cent and rising as as high as 20 per cent over time. The idea is to give countries a chance to negotiate with the US before the real pain starts. It’s unclear, however, if Bessent has convinced anyone — crucially, Trump — of his plan. Email us: robert.armstrong@ft.com and aiden.reiter@ft.com. 

That sound you just heard was not a bubble popping

The most important trend in finance in the past 40 years is the emergence of winner-take-all industry structures in technology. We live in a world of network effects and increasing returns to scale. In industries from PC software (Microsoft), internet search (Alphabet), online retail (Amazon) and social media (Meta) to high-end consumer hardware (Apple), most of the profits and market share have gone to one company. It is only a moderate exaggeration to say all that has mattered for investors in the past few decades was being on the right side of one or more of these winner-take-all stories.

So it is natural that everyone either has assumed, desired or feared that the next great technology trend, artificial intelligence, would have roughly this economic structure. What happened in markets yesterday was not an out-of-nowhere surprise, nor a panic, nor a bubble popping. It was the pricing in of slightly higher odds that AI is not a winner-take-all game.