What Greg Abel will do now he has officially taken over from Warren Buffett at Berkshire Hathaway.

Both leaders love a bargain and abhor unnecessary risk: Abel shares with Buffett a sorcerous talent for dealmaking. The future CEO is especially adept at grabbing great assets at distressed prices in rough markets. Notable examples are BHE’s purchases of pipeline and natural gas giants for a song in the early 2000s, after buyers intoxicated by deregulation such as Enron and Williams Companies vastly overpaid for them. The difference: Abel did the sweat-the-details stewardship that made the businesses better. Buffett famously didn’t get much into operations, relying instead on his one-of-a-kind knack for picking crack operators. Like Buffett, Abel is an accounting whiz. Going forward, Abel is most likely to continue Buffett’s practice of spreading acquisitions and investments across diverse industries so that through the cycle, winners in rising markets offset the laggards in temporarily falling sectors, and he would never bet the franchise on the purchase of a single gigantic business.

Expect Abel to be more hands-on than Buffett: The best wager is that Abel will impose tougher operating goals on the businesses, then help diplomatically steer their CEOs toward the best route for getting there. Jim Weber, former head of Brooks, disclosed that Abel visited the running-shoe maker’s Seattle headquarters several times a year for strategy sessions. “If you’re not performing, he’ll tell you, and you have a few months to get on track,” Weber said during an interview at the 2021 annual meeting. Abel is also taking a closer look at how much the subs are spending on new plants and other capex. Says Adam Mead, who wrote the definitive book on Berkshire’s financial history, “a couple of the CEOs told me that he’s imposed a kind of advisory cap on capital spending. Go over the limit and it triggers a conversation with Greg.”

Abel may push for more synergies: Berkshire prides itself on harboring an extremely light, flat corporate structure that minimizes bureaucracy and speeds decision-making. But maybe the looseness has gone too far. Successful conglomerates from Danaher to Honeywell attain efficiencies by pooling the buying power of diverse businesses to purchase raw materials and components at the best prices. Today, Berkshire does garner synergies, and they’re big—but mainly financial. Headquarters can lend to Clayton homes and other subs at rates far lower than they’d pay to banks or bondholders, for example. But Berkshire apparently does little or nothing along the lines of encouraging its subs to buy steel or semiconductors in concert, or cross-selling Geico insurance. At the annual meeting, Abel cited that Geico is going through a “technological transformation,” and that other Berkshire businesses could learn from its experience and perhaps adopt similar improvements. Berkshire needs to “figure out how to benefit from prior improvements,” he concluded.

More news below.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top news

U.S. and China agree to lower tariffs. The U.S. will lower tariffs on China to 30% (down from 145%), China will lower tariffs on the U.S. to 10% (down from 125%), U.S. Treasury Secretary Scott Bessent said in a news conference in Geneva this morning. The reductions will last for 90 days while further trade talks continue. A separate tariff of 20% on China, intended to deter the export of fentanyl, will remain.

Trump previewed the deal in glowing terms yesterday: “A total reset negotiated in a friendly, but constructive, manner. We want to see, for the good of both China and the U.S., an opening up of China to American business,” he said. 

• Stocks rallied instantly on the news. All the main indexes in Asia and Europe are up this morning. In the U.S., S&P 500 futures are up over 2.5%, pre-market. Hong Kong’s Hang Seng was up 3%, and it’s up 20% YTD. (By contrast, the S&P is down 3.8% YTD—but that looks set to change at the opening bell in New York.) China’s CSI 300 rose 1.2%, South Korea’s KOSPI was up 1.17%, Stoxx Europe 600 was up 0.6%. The VIX fear index was down nearly 10% today.

The tariff reductions will halve the stagflation impact, Bloomberg calculates. “We expect that could translate into a 1.5% hit to GDP and 0.9% boost to core PCE [inflation] over a period of two to three years,” the wire reported.

Japan still not happy. Prime Minister Shigeru Ishiba said there will be no trade deal with the U.S. unless it includes autos. Context: Toyota is the world’s biggest carmaker.

Trump promises drug price cuts. At 9 a.m. EST, the president will unveil his latest healthcare policy, he said on Truth Social:  “I will be signing one of the most consequential Executive Orders in our Country’s history. Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%.” There are few other details about how this will work.

How DEI is faring. A cultural shift ushered in by the new Trump Administration has put DEI on the chopping block at some of the country’s biggest companies, but some shareholders are fighting back. Fortune’s Lila MacLellan details how these conflicts have played out this proxy season.

Hamas released the last remaining living American hostage after 550 days in captivity. Edan Alexander is one of 59 hostages still being held in Gaza, 21 of whom are believed to still be alive. Fortune interviewed Alexander’s father in February.

Putin and Zelensky will meet in Turkey this week to attempt to negotiate a ceasefire.

From the analysts: 

• Wedbush on the China trade deal: “This is clearly just the start of a broader and more comprehensive negotiations, and we would expect both these tariff numbers to move down markedly over the coming months as deal talks progress,” per Daniel Ives et al.
• Macquarie on the declining dollar: “The nature of the US's behavior in April means that not everything will return to ‘the way it was before’. The view of the US as a ‘full faith and credit’ counter-party has been damaged. The imperative for even allies to diversify economic and security exposure away from the US, especially after 13 years (2012-2024) of US primacy, is still compelling. That diversification could be the USD's bane for the next five years, if historical patterns of USD strength/weakness is any guide,” per Thierry Wizman and Gareth Barry.
• Oxford Economics on the U.K.-U.S. trade deal: “This trade deal was more important about what it signals for broader negotiations, so the limited commitments secured from the UK and the modest tariff relief offered in return will come as a disappointment to those expecting a major de-escalation,” per Michael Pearce.
• Wedbush on AI spending: “With over 15% of cloud services now including some form of AI … This dynamic clearly benefits the hyperscalers such as Microsoft, Google, and Amazon front and center as in a world of tariff uncertainty these cloud and AI projects are being green lighted as C- level management know if they slow down these projects the strategic impact could be hard to recover from,” per Daniel Ives et al.

Around the watercooler

China’s unemployed Gen Z are proudly calling themselves ‘rat people’ in a rebellion against burnout by Orianna Rosa Royle

Trump’s tax hike on millionaires is back on the table—but experts say it won’t make a dent in the ultra-rich by Irina Ivanova

The most powerful people in the world are bond vigilantes, who ‘boxed in’ Trump, top economist says by Jason Ma

Mastercard exec says AI agents helping you make your next purchase could be key to solving online shopping’s $750 million fraud problem by Marco Quiroz-Gutierrez

Digital marketing used to be about clicks, but the rise of ChatGPT means it’s ‘now all about winning the mentions’ by Stuart Dyos

CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.