Billionaire investor Bill Ackman once warned Canadian Pacific of a “nuclear winter.” Now, as his top holdings face new risks, he’s sounding the same alarm over a trade war launched by a president he supported. More on Ackman joining a growing chorus of billionaires calling for the White House to rethink its stand below.
In the news
Tech: Shopify CEO Tobi Lütke is going all-in on artificial intelligence, requiring employees to embed the technology into everything from daily tasks to performance reviews.
Labour: Engineers and conductors at Canadian National Railway Co. will receive a wage hike of 3 per cent per year under a contract reached via binding arbitration yesterday, capping off a labour standoff that halted freight trains across the country last summer.
Lending: Circle K customers can now apply for personal loans at select locations in Ontario, the latest in what experts say is a growing effort by online lenders to make borrowing as convenient as possible.
In the know
We’ve made an effort to find stories for this space that live outside the tariff fog – fresh angles, surprising dynamics, stories that don’t necessarily begin and end with Trump. That’s been a little tricky over the last few days. Consider:
- Crunching the numbers: More than US$6-trillion in market value was erased from the S&P 500 in the two days after Trump’s tariff announcement. The index dropped 10.5 per cent, its biggest two-day loss since 2020. On Monday morning, the S&P 500 fell 20 per cent below its record closing high. A false report yesterday that Trump might pause tariffs briefly added $2.4-trillion in stock-market value – before vanishing just as fast within just over half an hour.
- Quoted: “Forty-six per cent on Vietnam? Come on! You might as well tell them, ‘Don’t even bother calling.‘” - Ken Langone, co-founder of Home Depot and long-time Republican donor, in an interview with the Financial Times. He called the 46 per cent tariff on Vietnam “bullsh-t,” but without the dash. This is a family newsletter.
- Trade: A top Trump trade official is giving a closed-door keynote at a Canadian conservative conference – with media banned, tariffs rising, and a federal election just weeks away.
- Catch up: A pair of reports we spotlighted in yesterday’s newsletter showed declining business and consumer sentiment and increased worries about a recession taking hold, even before the latest round of tariffs announced by Trump last week.
- Who knows? Perhaps today will bring a lighter news cycle. How are you handling the economic drama? Trying to avoid it? I relax by watching the Blue Jays, so I’m open to new ideas. Let me know how you’re getting by: cws@globeandmail.com
Bill Ackman at a November conference in New York.The New York Times News Service
In focus
From kingmaker to cautionary voice
More than a decade ago, Bill Ackman warned the chair of Canadian Pacific Railway that he would launch a proxy fight that would turn a “border skirmish” into a “nuclear winter” if his demands for a new CEO and two seats on the board were not met.
In an e-mail under the subject line “War and Peace,” Ackman threatened to take his fight public if the board didn’t act quickly. He ultimately prevailed, installing a new board and sparking a corporate turnaround that sent CP’s stock soaring – and returned more than US$2.6-billion over five years for his fund. In the years that followed, Pershing Square grew from roughly US$11-billion in assets under management to more than US$18-billion.
“Let’s avoid having a border skirmish turn into a nuclear winter – life is too short,” he wrote to John Cleghorn, the CP chair.
On Sunday, the New York hedge fund manager called on U.S. President Donald Trump to pause his sweeping tariffs, warning that the fallout could trigger a global “nuclear winter” in financial markets. He made his appeal directly to the President, whom he openly supported during the 2024 election. (A spokesperson for Ackman declined to comment.) He wrote on social media that he had “high hopes” for Trump in his second term, but said the sudden imposition of tariffs had begun to erode market confidence. “We are no longer in a normal correction. We are in the early stages of a market meltdown,” he wrote. “We need a circuit breaker.”
The underlying problem of the market is that the administration’s approach to trade imbalances is to try a cure that’s worse than the disease.
— Rick Meckler, partner, Cherry Lane Investments.
Ackman has always had a flair for the dramatic, and his fondness for apocalyptic metaphors might have served him well – especially when rallying shareholders to his side. But as markets crash and panic spreads worldwide, his caution lands this time in a crisis shaped, in part, by the very forces he helped champion.
Trump, who returned to power pledging to eliminate trade deficits he calls a national embarrassment, has long threatened protectionist measures. In speeches throughout the 2024 campaign, he often vowed to impose across-the-board tariffs to penalize countries he believed were undermining American industries.
Investors and business leaders largely counted on Trump to loosen regulations and cut corporate taxes, helping to secure the skyward trajectory of markets in recent months. But his aggressive focus on tariffs seems to have caught Wall Street off guard. JPMorgan Chase CEO Jamie Dimon has said tariffs risk undermining U.S. competitiveness. BlackRock Larry Fink said the country is “probably in a recession right now.” Fiona Cincotta, a senior market analyst at City Index, said the current route could become a “named event” for future historians.
But Ackman’s warning is perhaps more conspicuous – at least to Canadians – because of his dramatic and highly public history north of the border. Few other U.S. investors of his stature have waged such high-profile campaigns here, or left such lasting marks on the companies involved. His portfolio of prominent Canadian companies are now caught in the crosshairs of Trump’s trade war.
CPKC‘s Final Spike Steam Tour made a stop at Union Station in Kansas City, Mo. on May 18th, 2024, featuring the iconic 2816 locomotive also known as “The Empress.”David Eulitt/The Globe and Mail
Canadian Pacific Kansas City, the transcontinental rail operator that emerged from the CP battle, is one of Ackman’s signature legacies. A decade after replacing the railroad’s board of directors and CEO, the billionaire said he had invested in CP once again. In 2022, he disclosed in a regulatory filing that his fund held about 2.8 million shares — worth, at the time, about US$1.2-billion.
That investment came before CP bought the Kansas City Southern Railway Company – a US$31-billion bet on becoming the only railroad to connect Canada, the U.S. and Mexico. It was a network built to capitalize on the free movement of goods between the three countries.
Pershing’s more than US$2-billion stake in Brookfield Corp. ties it to a Canadian empire with sprawling global assets – including data centres, ports, renewable energy projects and pipelines – and significant exposure to geopolitical and trade risk. Ackman also remains a top shareholder in Restaurant Brands International, the parent company of Tim Hortons, where softer consumer demand could shrink margins. His billion-dollar positions in Nike, Uber and Hilton further extend that exposure, setting him up for a broader tariff-driven squeeze on global supply chains and discretionary spending.
These companies are far from collapse. But they are navigating an environment their key investor helped bring about – and now wants urgently to suspend. In his fight with CP, Ackman’s defiance made him a kingmaker. In the turmoil now unfolding, it threatens to shake the foundations of companies he helped shape.
- 📚 Related: Blackstone CEO Stephen Schwarzman, another billionaire who helped pave the way for Trump’s second term, now wants Ottawa’s blessing to invest in critical Canadian infrastructure. If Schwarzman isn’t willing to join Ackman and Dimon in calling out Trump’s reckless impulses, Andrew Willis writes, Ottawa needs to block Blackstone investments in Canada.
Charted
Ovi’s opus
If the world had remained the way it was in 2004, the game when the Great Eight passed the Great One would have been a moment to celebrate the unifying power of sport. If only. Mark MacKinnon writes on why his politics are hard to ignore.
Bookmarked
On our reading list
Calling all scientists: Toronto’s University Health Network is launching a campaign to recruit 100 “world-leading early career scientists,” targeting candidates doing research with commercialization potential at a time when some are looking to leave the U.S.
Familiar ground: From dahlias to peonies, old-fashioned garden flowers are back in style.
Training day: Taking your run from the treadmill to the road? A former Olympic runner shares her tips.
Morning update
World markets were higher three days of heavy selling that wiped trillions of dollars off the value of shares, but the mood was cautious with a focus on whether Washington might negotiate on some of its aggressive tariffs. Wall Street futures were in positive territory, while TSX futures followed sentiment higher.
Overseas, the pan-European STOXX 600 was up 1.56 per cent in morning trading. Britain’s FTSE 100 gained 1.97 per cent, Germany’s DAX climbed 1.39 per cent and France’s CAC 40 advanced 1.21 per cent.
In Asia, Japan’s Nikkei closed 6.03 per cent higher, while Hong Kong’s Hang Seng rose 1.51 per cent.
The Canadian dollar traded at 70.43 U.S. cents.