The carveouts for energy in President Trump's sweeping tariffs can't shield the sectors from collateral damage as markets digest the sweeping global penalties.

The latest: U.S. crude oil prices are down more than 6% this morning, even though oil, gas and certain minerals are exempted.

• New OPEC+ plans to speed up supply additions are also weighing on oil prices.

Why it matters: It's early days, but the quick drop suggests traders see a global economic hit large enough to soften consumption growth.

• "The scale of some of Trump's tariffs will raise global demand concerns," ING analysts said in a note.
• "For oil prices, the focus now shifts to the global growth outlook, which is likely to be revised downward due to these higher-than-expected tariffs," IG strategist Yeap Jun Rong tells Reuters.

🛢️ State of play: XOP, an exchange-traded fund that tracks the U.S. oil and gas exploration and production sector, is down 5% pre-market.

The big picture: Trump wants to reshape the global economy in a way that he believes will create a golden age for U.S. industry, Axios' Courtenay Brown and Neil Irwin report.

• The president yesterday announced reciprocal tariffs of 10%, but they're higher for the EU and especially China, among other places.

☀️ What we're watching: The fallout for low-carbon energy sectors like wind, solar and EVs.

• The U.S. industries tout the growth of domestic manufacturing but often have global supply chains and now face higher costs.
• Some groups called Trump's sweeping move a threat.

What they're saying: The American Clean Power Association said tariffs "have their place as a policy tool to carry out macroeconomic policy" but added that such "broad" measures are harmful.

• "The policy whiplash from these tariffs will ultimately undermine the ability to realize a domestic supply chain and will constrain efforts to deliver energy security and reliability for Americans," said Vanessa Sciarra, VP of trade and international competitiveness.

🚗 On the EV and battery front, the Zero Emission Transportation Association noted that longstanding trading partners have committed billions of dollars in direct investment in U.S. factories.

• Tariffs on them introduce "uncertainty and risk into an industry that is creating jobs and bringing new economic opportunities to communities across the country," executive director Albert Gore said in a statement.

What's next: Officials in the European Union, China and North American neighbor Canada say they're preparing countermeasures in response to Trump's announcement of sweeping tariffs on U.S. imports, Axios' Rebecca Falconer reports.

The bottom line: "At this early stage, it's difficult to fully assess the long-term impact of these tariffs on the global economy, but there will undoubtedly be immediate and severe consequences," Rystad Energy analyst Claudio Galimberti said in an analysis circulated to reporters.

Breaking: Terradot, the young CO2 removal startup with big-name backers, has a new agreement with Microsoft that blends science and commerce.

Why it matters: The deal for 12,000 tons of removal in 2026-2029 will finance Terradot doing the "most comprehensive scientific monitoring ever implemented" at an enhanced rock weathering (ERW) site, the companies said.

• ERW involves spreading crushed minerals on farmlands and elsewhere to accelerate rocks' CO2 absorption.

The big picture: Bespoke research at removal sites is key for building the wider models and datasets that are needed for investor confidence and scale.

• New soil research is also part of the recent deal between ERW startup Eion and the Frontier consortium.

Catch up quick: Terradot launched in late 2024 with $58.2 million in funding from investors including Google, Microsoft, John Doerr and Sheryl Sandberg.

• It previously announced 290,000 tons of offtake agreements with Google and Frontier. Terradot has begun spreading basalt in Brazil and will deliver its first credits this year.

The bottom line: Microsoft is staking research "needed to build confidence in ERW and dramatically improve the accuracy of measurement, reporting, and verification," Terradot CEO James Kanoff said.

⚾ Important inside baseball! Fiscal assumptions in the Senate GOP's new budget plan might shrink the bullseye on climate law tax credits.

• It uses the "current policy baseline," which lets them assume that extension of expiring Trump 1.0 tax cuts would not increase the deficit.

Why it matters: That means less pressure to find offsets and less pressure to cut IRA spending and tax credits that many moderates want to keep.

What we're watching: Whether GOP fiscal hawks in both chambers are willing to accept what some call a gimmick.

What they're saying: TD Cowen Washington Research Group analyst John Miller still sees plenty of jeopardy for climate law incentives.

• "Reform to the IRA's tax credits carries both political (undoing the 'Green New Deal') and economic (offset) benefits," he said in a note.

Go deeper: Unlock the whole story, If you need smart, quick intel on energy and climate policy for your job, get Axios Pro Policy.

📫 GOP state lawmakers from Oregon, Washington State and Montana are urging DOE boss Chris Wright to maintain funding for the Pacific Northwest Hydrogen Hub (PNWH2) and other regional hydrogen hubs.

• Why it matters: Their new letter comes as DOE is weighing the fate of many Biden-era programs, and it's couched in Trump-y "energy dominance" terms. It also emphasizes thousands of jobs at stake with the hubs.

🏭 Via Bloomberg, "The dirtiest coal-fired power plant in the US is asking Donald Trump for a waiver from pollution mandates, taking up the administration on an offer to email for a chance to get a presidential exemption."

📝 Via Heatmap, an internal DOE memo shows over a dozen sites where private companies could build AI data centers and power plants on federal lands.

🛰️ Space solar startup Aetherflux closed a $50 million Series A round led by Index Ventures and Interlagos alongside others including Breakthrough Energy Ventures.

• The intrigue: Robinhood co-founder Baiju Bhatt is Aetherflux's founder and CEO. It's focused on DOD energy needs.
• What we're watching: Using small, low-orbiting satellites to move solar energy from space to ground with lasers is a fascinating and very challenging idea. Bloomberg has more.

🤝 NexGen Carbon Solutions and High Hopes yesterday launched a joint venture to capture carbon emissions with high-altitude balloons.

• Why it matters: The companies contend the far-fetched approach is more efficient than conventional carbon removal.
• State of play: NexGen is a subsidiary of Horizon Energy Global, an oil and gas exploration company based in Fairfield, Iowa, that's shifting focus to carbon transportation and storage. Go deeper via Axios Pro Deals.

These are odd times. Tesla's Q1 deliveries — a proxy for sales — came in below even diminished expectations but its stock rose over 5% yesterday, and then sank sharply after-hours.

Why it matters: The 13% year-over-year decline is a sign of consumer backlash to CEO Elon Musk's politics and DOGE chainsaw.

• That said, as Generate readers know, there's a lot going on — an aging lineup, rising competition and other forces affecting sales.
• And, clouding things further, President Trump's tariff announcement is sending lots of stocks downward ahead of markets officially opening.

What we're watching: Whether a Politico report that Musk's time in Trump 2.0 is winding down gives investors something to hang onto — although the White House later pushed back.

• "[W]e believe investors will view Musk slowly but surely moving away from his leadership position in DOGE as a very bullish sign for Tesla," Tesla optimist Dan Ives of Wedbush Securities said in a note.
• It's also possible the Q1 slide was largely baked into investors' expectations, following data showing plummeting sales in Europe.

That's the amount of gas-fired power envisioned for plans to redevelop Homer City Generating Station, once Pennsylvania's largest coal-fired power plant, with a major new data center campus.

• Homer City Redevelopment and Kiewit Power Constructors Co. yesterday unveiled plans that would use GE Vernova turbines, with deliveries starting in 2026.
• Axios Pittsburgh has more.