The Wrong Way to Measure Work: OPM’s Misstep in the Musk Era

President Donald Trump’s trade wars threaten to claim a casualty on the home front: the American auto industry.

If the president goes ahead with 25% taxes on imports from Canada and Mexico on Tuesday, he will disrupt more than $300 billion in annual U.S. automotive trade with its two neighbors, wreck supply chains that have been operating for decades, and likely push up the already-forbidding price of new cars.

The tariffs pose an “existential’’ threat to North American auto production, said David Gantz, a fellow at Rice University’s Baker Institute for Public Policy. They will push up “the cost of everything that’s imported from Mexico or Canada that goes into a car assembled in the U.S.’’

Kelley Blue Book says Trump’s tariffs could raise the U.S. price of the average new car – already approaching $49,000 – by $3,000 or more. The price of some full-size pickup trucks could shoot up by $10,000.

The economic pain would intensify if Canada and Mexico counterpunched with tariffs on American exports.

“The economic impact of a sustained 25% tariff on Canada and Mexico would be severe, with full tit-for-tat retaliation likely to push Canada and Mexico into a recession and the U.S. to a point of stagnant growth,’’ Andrew Foran of TD Economics wrote. Foran estimates that 25% tariffs would push down auto sales by 13.6% a year in Canada and 10.6% in the United States.

Trump’s tariffs would upend North American auto supply chains

Since 1965 — when the U.S. and Canada eliminated tariffs on each other’s autos and auto parts — North America has turned into an integrated auto manufacturing powerhouse. Mexico was brought into the fold by a 1994 regional trade pact and another one negotiated by Trump himself in 2020.

“The fact that you can tap relatively cheap steel and aluminum from Canada, that you can use the relatively low-cost labor in Mexico to assemble cars, and that you can leverage the high tech expertise and technology of the United States together, makes North America an incredibly competitive place to build automobiles,” said Brett House, a professor at Columbia University’s business school.

Much of the production has moved to Mexico. Ford, for example, manufactures the small Bronco Sport SUV and Maverick pickup in Sonora in northwestern Mexico. Stellantis makes the Jeep Compass and Wagoneer S at a plant in Toluca, west of Mexico City, which has been in operation since 1968. General Motors turns out GMC and Chevrolet pickups at a plant in Silao in central Mexico.

Just over half the 8 million cars and light trucks the United States imported last year came from Mexico (No. 1 at almost 3 million) and Canada (No. 4 at 1.1 million). Canada and Mexico are also the top two foreign markets for U.S.-built cars and light trucks, accounting for 53% of America’s auto exports.

By taxing Canadian and Mexican imports, most of which have been entering the U.S. duty-free, Trump would be lobbing an explosive into that elaborate manufacturing network.

A White House official, who spoke on condition of anonymity to discuss details of the tariff plan, said the taxes would apply each time goods cross the border from Mexico or Canada. That means the costs would pile up as auto components traveled from factories in the United States to Mexico or Canada and back again. So would the red tape: “It’s an administrative and bureaucratic nightmare to keep track of things,’’ Gantz said.

What’s more, the 25% tariffs on Canada and Mexico would come atop higher taxes Trump intends to impose on foreign steel and aluminum starting March 12. Trump is removing exemptions on the metals tariffs he imposed in his first term — 25% on steel and 10% on aluminum — and raising the levy on aluminum to 25%. That means U.S. importers, including auto companies, would pay 50% duties on steel and aluminum from Canada and Mexico, big sources of the metals.

“You’re talking about the material costs going up every time (a part) goes into one market and comes back,’’ said K. Venkatesh Prasad, senior vice president of research at the Center for Automotive Research.

The higher costs would take a toll. A decade ago, Prasad said, the lowest-earning 20% of American consumers couldn’t afford a new car. Already, he said, “the bottom 40% of the population is not able to afford a new vehicle.”

Ford CEO Jim Farley has complained that “so far what we’re seeing is a lot of cost and a lot of chaos.’’

General Motors CEO Mary Barra said last month at the Wolfe Research auto industry conference that GM has been “doing scenario planning and look at what at the different things we can change, we can move, we can respond.’’ She expressed confidence that company can find ways to “mitigate’’ the effect of the tariffs. Stellantis chairman John Elkann recently said he thinks the administration’s policies will boost American jobs and manufacturing.

Trump’s trade war comes at an awkward time for automakers. They’re trying to shift from gasoline-powered to electric vehicles, using revenue generated from selling conventional cars to finance EV investments, Prasad said, so the tariffs could hurt sales and limit the money available for the EV transition.

Trump insists that the hefty hit to imports from Canada and Mexico isn’t about trade; they’re about slowing the flow of undocumented immigrants and fentanyl across U.S. borders.

“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH 4 will, indeed, go into effect, as scheduled,” Trump wrote Thursday in a post on his social media platform Truth Social.

Canada wouldn’t seem to be an especially important source of fentanyl: U.S. customs agents seized just 43 pounds of fentanyl at the Canadian border last year, versus the 21,100 pounds at Mexico’s.

Many analysts suspect that Trump has another goal: The 2020 U.S.-Mexico-Canada Agreement he negotiated in his first term comes up for renewal next year.

Although the president characterized the USMCA as a victory and a big improvement over the 1994 pact it replaced, it failed to reduce America’s trade deficits with Canada and Mexico. In fact, they’ve gotten bigger. (In Canada’s case, that’s largely because of surging energy exports that the American Midwest and Northeast rely on.)

So he is likely to seek revisions meant to ensure that more production — specifically auto production — is done in the United States, not just in North America. The tariffs could give him leverage to pressure Canada and Mexico into accepting the USMCA changes he wants.

In the meantime, writes TD Economics’ Foran, “the North American auto industry should still prepare itself for a prolonged period of elevated trade uncertainty and potential trade disruptions.’’

U.S. President Donald Trump on Saturday ordered a new trade investigation that could heap more tariffs on imported lumber, adding to existing duties on Canadian softwood lumber and 25% tariffs on all Canadian and Mexican goods due next week.

In his third new tariff probe in a week, Trump signed a memo ordering Commerce Secretary Howard Lutnick to initiate a national security investigation into U.S. lumber imports under Section 232 of the Trade Expansion Act of 1962. The trade law is the one Trump also used to impose tariffs on global steel and aluminum imports.

The probe covers derivative products made from lumber which could include furniture such as kitchen cabinets, which in some cases are made of U.S. lumber that had been exported.

The order said the Commerce Department investigation must be completed within 270 days.

Trump also ordered new steps within 90 days to increase the domestic supply of lumber by streamlining the permitting process for harvesting lumber from public lands and improving the salvage of fallen trees from forests and waterways.

The order calls for new or updated agency guidance to facilitate increased timber production, including quicker approvals for forestry projects under the Endangered Species Act.

White House trade adviser Peter Navarro said the lumber import probe would counteract the actions of big lumber exporters including Canada, Germany and Brazil, which he said were "dumping lumber into our markets at the expense of both our economic prosperity and national security."

"That stops today with a pair of Trumpian actions designed to both bolster the supply of and demand for American timber and lumber," he told reporters on a conference call ahead of the signing.

A White House official said that increasing reliance on imported lumber represents a possible national security risk partly because the U.S. military consumes significant quantities of lumber for its construction activities and because increasing dependence on imports for a commodity with ample domestic supplies is a danger to the U.S. economy.

The official did not provide details on a proposed tariff rate under the Section 232 lumber probe, but Trump earlier this month told reporters that he was thinking about imposing a 25% tariff rate on lumber and forest products.

The official said any tariffs resulting from the probe would be added to the existing 14.5% combined anti-dumping and anti-subsidy duties on Canadian softwood lumber.

These were the result of a long-running U.S.-Canada trade dispute over Canada's low stumpage fees on public lands, which Washington argues is an unfair subsidy. Most U.S. lumber is harvested from private land at market-determined rates. Home builders have long criticized the tariffs as raising lumber prices and contributing to home price inflation.

The official said the new lumber duties also would stack on top of Trump's threatened 25% general U.S. tariffs on all Canadian and Mexican goods that are scheduled to take effect on Tuesday unless Trump is persuaded by the two countries' efforts to secure their borders and halt fentanyl trafficking.

The new tariff probe follows Trump's order on Tuesday for a new Section 232 into copper imports, aimed at rebuilding U.S. production of a metal critical to electric vehicles, military hardware, and the power grid.

On Feb. 21, Trump ordered U.S. Trade Representative Jamieson Greer to revive investigations aimed at imposing tariffs on imports from countries that levy digital services taxes on U.S. technology companies. Canada would again be in the firing line for such penalties, along with France, Britain, Italy, Spain, Austria, India, and Turkey.

 Chinese AI startup DeepSeek on Saturday disclosed some cost and revenue data related to its hit V3 and R1 models, claiming a theoretical cost-profit ratio of up to 545% per day, though it cautioned that actual revenue would be significantly lower.

This marks the first time the Hangzhou-based company has revealed any information about its profit margins from less computationally intensive "inference" tasks, the stage after training that involves trained AI models making predictions or performing tasks, such as through chatbots.

The revelation could further rattle AI stocks outside China that plunged in January after web and app chatbots powered by its R1 and V3 models surged in popularity worldwide.

The sell-off was partly caused by DeepSeek's claims that it spent less than $6 million on chips used to train the model, much less than what U.S. rivals like OpenAI have spent.

The chips DeepSeek claims it used, Nvidia's H800, are also much less powerful than what OpenAI and other U.S. AI firms have access to, making investors question even further U.S. AI firms' pledges to spend billions of dollars on cutting-edge chips.

DeepSeek said in a GitHub post published on Saturday that assuming the cost of renting one H800 chip is $2 per hour, the total daily inference cost for its V3 and R1 models is $87,072. In contrast, the theoretical daily revenue generated by these models is $562,027, leading to a cost-profit ratio of 545%. In a year this would add up to just over $200 million in revenue.

However, the firm added that its "actual revenue is substantially lower" because the cost of using its V3 model is lower than the R1 model, only some services are monetized as web and app access remain free, and developers pay less during off-peak hours.

Late last month, the Office of Personnel Management (OPM) sent a shiver through the federal workforce with an email that felt more like a pop quiz from a micromanaging boss than a serious policy move. Prompted by Elon Musk’s influence, the agency demanded that employees submit a list of five things they accomplished the previous week—failure to comply, Musk warned via social media, would be treated as a resignation. It’s hard not to smirk at the absurdity, but the implications are no laughing matter.

I’ve spent over four decades working across private and nonprofit sectors, watching managers come and go. The best ones inspired trust and results; the worst clung to petty control tactics—like this. The OPM’s memo, bluntly titled “What Did You Do Last Week?,” echoes the kind of tone-deaf, threatening busywork that signals a leader is out of touch with the actual value of the people they oversee. It’s not just incompetent; it’s a red flag of deeper dysfunction.

Federal workers aren’t assembly-line robots churning out widgets for a tally sheet. Their roles—whether securing borders, managing public health, or keeping the Postal Service afloat—defy simple checklists. Imagine a Secret Service agent forced to boil down a week of classified operations into five bullet points, or a scientist at NOAA reducing years of climate research to a soundbite. The directive doesn’t just insult their expertise; it misses the point of what productivity means in a complex, mission-driven system.

Readers of this paper chimed in with similar disbelief. One called it “bitter amusement,” recalling how ineffective executives always start with the same clueless question. Another pointed out the irony of Musk—a man who’s built empires on innovation—pushing a metric so archaic it could’ve been scribbled on a 1950s timecard. And let’s not ignore the timing: this lands as the U.S. Postal Service, a 250-year-old institution, faces existential threats under Trump-era meddling. Coincidence? Hardly.

Musk’s defenders might argue this is about accountability, a shake-up of a bloated bureaucracy. But accountability isn’t achieved by treating skilled professionals like school kids proving they did their homework. Real productivity isn’t a list—it’s outcomes: a delivered package, a thwarted cyberattack, a policy that saves lives. If Musk and OPM want to measure that, they should ditch the gimmicks and ask smarter questions: What barriers slow you down? What tools do you need? How can we help you succeed?

Instead, this stunt risks alienating a workforce already battered by years of political tug-of-war. The Postal Service, for one, doesn’t need more upheaval—it’s been fighting for survival against privatization threats and budget cuts, as recent headlines attest. Saddling its employees with pointless paperwork won’t save it; it’ll just hasten the bleeding.

The OPM memo isn’t just a bad idea—it’s a symptom. When leaders lean on blunt tools like this, they reveal a failure to grasp the systems they claim to fix. Federal workers deserve better than a billionaire’s whim dressed up as reformers. If Musk wants to play overseer, he should at least learn the job first.

Global hedge funds sold more stocks than they bought by the largest amount in a year, mainly driven by their bets that stocks will drop, a Goldman Sachs note showed on Friday.

The note refers to the period of February 21-27.

Goldman Sachs said the gloomy sentiment was spread across all geographic regions, but mainly in North America and part of Asia, and was seen in almost all company sectors, except for communications services.

In healthcare, net selling by hedge funds was entirely driven by short positions and ranked close to the highest level seen over the past five years.

Hedge funds turned more pessimistic about healthcare after buying stocks in the sector on a net basis for six straight weeks.

Bets that U.S.-listed exchange-traded funds will fall, including those focused on large and small caps, rose 5.4% last week among Goldman Sachs' clients.

Stocks fell over the period, with MSCI's (.MIWD00000PUS), opens new tab gauge of stocks across the globe down roughly 3%, amid concerns about an escalating trade war and a report by chipmaker Nvidia (NVDA.O), opens new tab that failed to rekindle Wall Street's AI rally.

"The pace of risk-taking has slowed versus the past several months," Goldman said in a separate note about hedge funds' positioning, adding portfolio managers have been rotating out of U.S. equities and into Asian stocks this year.

Exposure to the Magnificent Seven group of U.S. tech and growth stocks is now at the lowest level since April 2023, indicating hedge funds' de-risking episode could be in the final stage.

The Trump administration sent out a second round of emails on Friday evening demanding all federal employees summarize their work over the past week after the first effort a week ago fizzled amid a wave of confusing directives.

Reuters has confirmed that the emails from the government’s human resources arm, the U.S. Office of Personnel Management, were sent to multiple agencies, asking workers to list five things they accomplished during the week.

The move marks a renewed push by billionaire Elon Musk and his Department of Government Efficiency team to assess the performance of government employees as the administration looks to mass layoffs to dramatically trim the federal footprint.

“The President has made it clear that this is mandatory for the executive branch,” Musk wrote on X. “Anyone working on classified or other sensitive matters is still required to respond if they receive the email, but can simply reply that their work is sensitive."

Musk attempted a similar tack last week, along with a threat that noncompliant workers could be fired, but he was stymied when some agencies such as the State and Justice Departments told their employees to stick to the chain of command.

Ultimately, OPM informed agencies that responding to the emails was voluntary.

But Musk, with President Donald Trump’s backing, continued to press for the emails as a means they said to hold workers accountable. Both men suggested that some federal employees on the payroll do not exist.

Critics, including Democratic lawmakers and labor unions, say widespread cuts could hamper crucial government functions and services.

The second round of emails does not include any threat of retaliation for noncompliance but says workers are expected to send responses at the beginning of each work week.

Defense Secretary Pete Hegseth has directed Pentagon workers to comply, according to media reports, but the State Department again told their employees to hold off, according to a directive seen by Reuters.

The Department of Homeland Security told its employees to respond to an internal DHS email address, labeled "accountability" because of its national security responsibilities, according to a memo reviewed by Reuters.

The Justice Department also received the directive. The acting U.S. attorney for the District of Columbia, Ed Martin, told workers in his office to comply, according to a message seen by Reuters.

"All federal government departments are cooperating with @DOGE," Musk posted on Saturday. "For State, DoD and a few others, the supervisors are gathering the weekly accomplishments on behalf of individual contributors."

Reuters was able to confirm the emails were also sent to employees at the Internal Revenue Service, the National Oceanic and Atmospheric Administration and the National Institutes for Health. Those agencies have all been targeted by DOGE for layoffs.

Musk’s team last week instructed agencies across the government to submit plans by March 13 for a “significant reduction” in staffing across the federal workforce.

Already, about 100,000 workers have taken buyouts or been fired after DOGE was dispatched by Trump to gut federal staffing and spending. There are about 2.3 million federal employees in all.

The layoffs have occurred in such a haphazard fashion that some agencies such as the Food and Drug Administration have been forced to recall key personnel to ensure public safety.

On Friday, the Social Security Administration, which sends out benefit checks to tens of millions of Americans, said it would cut 7,000 people from its workforce and shutter several regional offices.

Most recently, the Trump administration has pulled the plug on a team of tech-savvy civil servants that helped build the Internal Revenue Service's free tax filing service and revamped websites across government.

In an email sent overnight to employees of the U.S. General Services Administration (GSA) and seen by Reuters, the GSA’s Director of Technology Transformation Services Thomas Shedd said the team — known as 18F — had been identified as “non-critical.”

Formed at the tail end of the Barack Obama administration, the unit acted as an internal tech consultancy within the government, ferreting out duplication and waste, streamlining bureaucratic processes, and making public-facing websites more user-friendly.

Questions about Musk's role and DOGE are at the heart of multiple lawsuits seeking to block them from accessing government systems and confidential data. The suits allege that Musk and DOGE are violating the Constitution by wielding the kind of vast power that only comes from agencies created through the U.S. Congress or appointments made with confirmation by the U.S. Senate.

Musk’s actions have also caused some tension and confusion among Trump’s White House aides, although Trump himself is said to be wholly on board with the effort.

The CEO of Tesla (TSLA.O), opens a new tab and SpaceX is not a Cabinet-level official and did not face U.S. Senate confirmation. The Trump administration has been evasive about exactly what role he plays within DOGE.

 Demonstrators gathered outside Tesla stores across the U.S. Saturday to protest the automaker’s billionaire CEO, Elon Musk, and his push to slash government spending on behalf of President Donald Trump.

The demonstrations are part of a growing backlash in North America and Europe to Musk’s disruptive role in Washington.

Critics of Trump and Musk hope to discourage and stigmatize purchases of Tesla, the electric car company that is the world’s most valuable automaker. Liberal groups for weeks have organized anti-Tesla protests in hopes of galvanizing opposition to Musk’s Department of Government Efficiency and energizing Democrats still demoralized by Trump’s November victory.

“We can get back at Elon,” said Nathan Phillips, a 58-year-old ecologist from Newton, Massachusetts, who was protesting in Boston on Saturday. “We can impose direct economic damage on Tesla by showing up at showrooms everywhere and boycotting Tesla and telling everyone else to get out, sell your stocks, sell your Teslas.”

Musk is taking direction from Trump to slash federal spending and sharply reduce the workforce, arguing that Trump’s victory gave the president and him a mandate to restructure the U.S. government. DOGE officials have swiftly gained access to sensitive databases, directed thousands of federal job cuts, canceled contracts and shut down sections of the government, including the U.S. Agency for International Development.

Musk’s critics say his actions defy Congress’s power to control the U.S. budget and present a host of ways for him to enrich himself. Musk leads several other companies, notably SpaceX, which conducts launches for NASA and the intelligence community, and the social media platform X.

“Protests will not deter President Trump and Elon Musk from delivering on the promise to establish DOGE and make our federal government more efficient and more accountable to the hardworking American taxpayers across the country,” said White House spokesperson Harrison Fields.

Tesla did not respond to an emailed request for comment.

More than 50 demonstrations were listed Saturday on the website Tesla Takedown, with more planned later in March from coast to coast in the United States along with England, Spain, and Portugal. News reports showed demonstrations in recent days in U.S. cities including Tucson, Arizona; St. Louis; New York City; Dayton, Ohio; Charlotte; and Palo Alto, California.

Some Tesla owners have also reported their vehicles vandalized with spray painted swastikas amid what Jewish groups and observers fear is a rise in antisemitism.

Federal prosecutors charged a woman in connection with a string of vandalism against a Colorado Tesla dealership, which included Molotov cocktails being thrown at vehicles and the words “Nazi cars” spray painted on the building.

Saturday’s demonstration in Boston had a festive atmosphere, with a brass band playing music as protesters carried signs and chanted. Several of the signs mocked Musk and DOGE, with one reading: “Stop Elon and his despicable Muskrats.”

“This government led by Trump and Musk, it’s gone completely off the rails and we are here to stop that,” said Carina Campovasso, a retired federal worker. “And I hope they listen.”

About 300 demonstrators protested at a Tesla dealership in New York City on Saturday. Police said nine people were taken into custody but did not elaborate on the charges they faced.

Tesla’s share price has fallen by nearly a third since Trump took office, though it’s still higher than it was a year ago. Musk’s current net worth is an estimated $359 billion, according to Forbes, which calculated his 2024 net worth as $195 billion.