I’ve been in Paris for the past week, and so I decided to pay a visit to my old stomping grounds, Lazard, the Grand Dame of French high finance. In particular, I wanted to check in with Jean-Louis Girodolle, the C.E.O. of Lazard’s investment banking group in France and the co-head of its investment banking group in Europe. I had never met Girodolle before—after holding several finance-related posts in the French government, he came to Lazard in 2007, 12 years after I left—but he was cordial and talkative, and very French. We met at Lazard’s new offices at 175 Boulevard Haussmann, a few blocks and a world away from the old headquarters at 121 Boulevard Haussmann, where I would hole up for weeks at a time while working on deals such as the restructuring of EuroDisney or the sale of MGM, back when Crédit Lyonnais owned it. That old office was right out of a Stendhal novel: a maze of rabbit-warren offices, the inescapable odor of stale cigar smoke, and a parade of heavy-lidded men—all men. But the best French food I’ve ever had was in that dining room.

A MESSAGE FROM GOLDMAN SACHS

The new Lazard offices, to the contrary, are light-filled, airy, highly polished, welcoming, and capped off with a sumptuous outdoor deck overlooking tout Paris. During my visit, I spied a group of deep-pocketed bankers dining al fresco on the sunny spring day. The top floor features a large conference room with an intricate glass sculptural ceiling, the only one like it on Haussmann. Obviously, things have changed at Lazard since I was last in the Paris offices in the early 1990s. I’m told, though, that the outstanding French chefs remain. Lazard C.E.O. Peter Orszag, Zooming in from London, joined my conversation with Girodolle. Last week, Lazard announced first-quarter net income of $60 million, beating analyst expectations, thanks in large part to the performance of its asset management business. But Orszag warned of choppy waters ahead amid the tariff uncertainty. “The drivers for M&A activity remain strong,” he told Wall Street analysts on Lazard’s earnings call. “But there is an overhang of uncertainty right now.” Lazard’s stock is down 23 percent since the start of the year, and flat over the past year. I’ve been wondering a lot lately about how the Europeans have been grappling with the heavy economic cake that Trump II has dumped on them in the wake of Liberation Day. My curiosity was piqued, in particular, by my recent conversation with Jay Pelosky, my friend and Duke classmate and the founder of TPW Advisory, about the ongoing emergence of the so-called “tri-polar world” of the U.S., Europe, and Asia. As Tara Davies, the co-head of Europe at KKR, told the Financial Times this week, “Europe is undergoing a bit of a renaissance.” Indeed, as Jay and others have pointed out, the smart money has for some time been rotating their money into long-dormant European equities and away from the overpriced U.S. market, a bet that seems to be paying off. For the first time in a long time—since before the 2008 financial crisis—the equity markets have favored the Europeans this year. The European stock markets were up a cumulative roughly 9 percent in the first quarter of 2025, while the U.S. stock markets were down a cumulative more than 4 percent, according to an April presentation that Orszag shared with me. The S&P 500 alone, though, is down nearly 8 percent over Trump’s first 100 days in office, with only Gerald Ford (down 12 percent) faring worse in his first 100 days. That’s been beneficial for the investors who decided the time had come again for European equities. But what effect, I asked Orszag and Girodolle, has all the Trump sturm und drang had on the European investment banking business and cross-border M&A deals (which used to be a thing back when I was at Lazard)? The message among corporate C.E.O.s the world over, according to Jean-Louis and Peter, is one of caution, as they continue to digest the Trump tariff mishegas. “I’ve been calling it watchful waiting,” Peter told me, noting that most “larger-scale decision-making” is “paused” while C.E.O.s bide their time amid Trump’s 90-day “pause.” But, he added, the clock is ticking (only 70 days to go!), so it’s crucial for Trump to show some progress somewhere on the trade front, whether that be actual signed trade deals, or even a few memoranda of understanding toward trade deals, “so that you have a sense of what ‘getting to yes’ looks like,” Peter said. Understandably, he continued, “there’s some confusion about what would work” to satisfy Trump.

A MESSAGE FROM GOLDMAN SACHS

As a blueprint of sorts for Trump’s approach to tariffs, Peter mentioned Stephen Miran’s November 2024 essay “A User’s Guide to Restructuring the Global Trading System.” Miran, of course, is now the chairman of Trump’s Council of Economic Advisers. “He lays out the case for higher tariffs,” Peter told me, “and highlighted the potential for significant market volatility if this were rolled out or implemented in the wrong way.” In the essay, Miran argued that tariffs should be introduced through a process of “gradual implementation” and “forward guidance,” neither of which, of course, describes the approach Trump has taken. (According to the Financial Times, a recent meeting Miran had at the White House with big bond investors did not go particularly well. One participant told the FT that Miran was “in full-scale retreat” from the ideas in his November paper.) Add to that the Trump administration’s apparent misinterpretation—you’ll remember that bizarre mathematical formula of Greek letters that appeared suddenly on “Liberation Day”—of Harvard Business School professor Alberto Cavallo’s research on reciprocal tariffs. Cavallo posted on X in early April that “the elasticity of import prices with respect to tariffs is closer to 1. If that figure were used instead of 0.25 [i.e., the figure used in the administration’s formula], the implied reciprocal tariffs would come out about four times smaller.” Following that, confidence in the process deteriorated further.