Monday, April 14 | By Alexis Simendinger & Kristina Karisch |
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| ▪ The U.S.-China tariff turnstile ▪ Deportation dilemma rocks the courts ▪ GOP down to details on Medicaid cuts ▪ Iran, U.S. nuclear progress unclear |
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©️ The Hill | Manuel Balce Ceneta and Tingshu Wang, Associated Press
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Markets brace for another week of tariff roller coaster
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President Trump's tariff rollout has world leaders and economists on edge as White House messaging about the levies remains inconsistent. Last week, Trump abruptly delayed most "reciprocal" tariffs while keeping a 10-percent baseline levy and raising tariffs on Chinese goods to 125 percent, prompting backlash from Beijing. Chinese President Xi Jinping warned Monday that protectionism "leads nowhere" and that a trade war would have "no winners" as he kicked off a tour of Southeast Asia. Amid the confusion and shifting goalposts, businesses find themselves trapped in the middle. Trump and White House officials have expressed optimism that trade deals could be reached in the next few weeks, pointing to overtures from countries including Israel, South Korea, Japan and Vietnam. But there's substantial uncertainty about exactly what these deals would entail, in part because Trump's goals remain unclear. Sen. Ron Johnson (R-Wis.) said on NewsNation's "The Hill Sunday" that he's questioning Trump's "endgame" in his approach to tariffs, saying the ongoing "volatility" isn't good for businesses. "One thing I learned in the private sector is unpredictability can work pretty well in the negotiation, but the private sector — businesses want certainty. They want stability," Johnson said. "They don't like to see volatility." SHIFTING MESSAGES: The president has repeatedly said he wants to close the U.S. trade deficit with other countries — a concept that economists across the ideological spectrum regard with skepticism. Meanwhile, Peter Navarro, White House trade and China adviser, last week panned German automaker BMW's multibillion-dollar investment in a South Carolina factory as "bad for America" because it operates with imported car parts. "We have no idea what they want from other countries, and worse is that other countries don't know what Trump wants from them," Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank, told The Washington Post. "I don't know how you do negotiations in those circumstances." The Guardian: A hedge fund billionaire said the U.S. may face "worse than a recession" from Trump tariffs. Commerce Secretary Howard Lutnick on Sunday told ABC's "This Week" that Trump aims to announce tariffs "in the next month or two" to target semiconductors and pharmaceutical imports. The president's advisers signaled Sunday that exemptions the administration announced Friday for levies on imported smartphones and personal devices will be temporary. Major stock markets in Asia and Europe rose today in trading following the announcement of electronics exemptions. But the administration has described shifting strategies for tariff carve-outs. Navarro told NBC's "Meet the Press" that exemptions put in place last week by Customs and Border Protection are "not exclusions." He said specific tariffs on computer chips that power countless consumer and military products could be imposed. Meanwhile, China has halted exports of critical rare earth minerals and magnets used in electronics. ▪ The Hill: How Trump's trade war with China will hit tech prices. ▪ The New York Times: For companies that have shifted factory production from China to other countries, the latest tariffs have undermined their strategy while sowing paralysis. ▪ The Hill: The president's promised pharmaceutical tariffs raise the specter of shortages and price hikes. ▪ The Wall Street Journal: Treasury Secretary Scott Bessent, a former hedge fund manager, is trying to execute one of the highest-stakes political gambles in modern history. National Economic Council Director Kevin Hassett on Sunday tangled with CNN's Jake Tapper over the tariff confusion, with Hassett saying he disagrees with the notion that Trump administration officials were sending contradictory messages. Hassett argued that despite U.S. Trade Representative Jamieson Greer telling senators last week that there would be no tariff carve outs, everyone understood "all along" that there would be certain electronic exemptions from the tariffs, including for semiconductor chips. MESSAGING OPPORTUNITY: Trump's tariffs are opening new doors to a Democratic political offensive while Republicans fear the administration's trade war could lead to political wipeout. Some Democrats are politically uncomfortable with tariffs and a trade war with China as they decide how strongly to criticize the president's goals, methods and economic impacts. Progressives are criticizing tariffs for boosting prices and triggering international chaos. Sen. Elizabeth Warren (D-Mass.), speaking on ABC News's "This Week" on Sunday, called on Democrats to fight against Trump's tariffs rather than waiting for courts to potentially intervene. Warren was asked about the challenges to the tariff rollout and her call for the Securities and Exchange Commission to investigate if Trump allies profited from wild swings in the markets. "The courts may step in here, but we don't have to wait for the courts," Warren said. "The question is whether or not the Republicans will join us in this." Recent polling signals the administration's trade moves could be a political opening to voters beyond Trump's base. But some key battleground states, including Michigan, are led by politicians who are trying to straddle partisan arguments. Gov. Gretchen Whitmer (D) last week was careful while talking about international trade and manufacturing during a visit with Trump at the White House. CBS News: Trump's ratings on handling inflation and the economy have become more negative, according to a new CBS News/YouGov survey. A large majority of Americans say new tariffs will raise prices, and many think higher prices will linger long-term. |
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Blake Burman's Smart Take is off this week and will return next week. |
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- Pennsylvania Gov. Josh Shapiro (D) said an "arsonist set fire" to the governor's residence early Sunday while he and his family slept, forcing them to evacuate. A 38-year-old suspect from Harrisburg, Pa., has been charged.
- Here are five lessons drawn from the presidential contest last year, as described in a new, bestselling book, "FIGHT: Inside the Wildest Battle for the White House," co-authored by The Hill's Amie Parnes with NBC News's Jonathan Allen. The authors spoke with Vanity Fair about their third book in a decade featuring Trump.
- The Hill's housing series: Trump vowed to bring down housing costs. What is the new administration doing about that issue?
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©️ The Associated Press | Jose Luis Magana
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Trump's tough methods to eject migrants may be controversial in some U.S. courts, but Americans generally favor his overall goals to thwart crime and deport millions of people who lack legal status, according to recent polls. The president today at the White House will tout his alliance with El Salvadoran President Nayib Bukele, who secured a lucrative U.S. contract to accept migrants deported from the U.S. to his country's notorious maximum-security prison. But a prevailing question is whether the administration has raced to act, made mistakes and later applied new narratives and legal justifications to specific deportation cases challenged in the news and in the courts. The Justice Department has not complied with rulings ordering the return from El Salvador of Kilmar Abrego Garcia, a Maryland man the government concedes was mistakenly deported without due process and erroneously alleged to be a Venezuelan gang member. The Supreme Court gave the administration some wiggle room to respond to lower district courts that ordered the return of Garcia. Government lawyers have confirmed Garcia's location in El Salvador but offered no information indicating the administration intends to heed court orders to bring Garcia back to the U.S. His attorney said over the weekend that the government's lack of cooperation with court rulings prompted a request for a contempt of court hearing. Standoffs between the executive and judiciary branches on multiple legal issues are heating up. There is no evidence that Tufts University student Rumeysa Ozturk — who was surrounded on a Massachusetts street by Immigration and Customs Enforcement agents and taken into custody on March 25 — had any links to Hamas or antisemitism, according to a State Department memo written days before the apprehension and revocation of her visa, The Washington Post reported. Lacking any evidence, the department decided Ozturk could be deported at Secretary of State Marco Rubio's discretion under law. The government has not produced information backing up its assertions that Ozturk was a leader in last year's protests at Tufts. Rubio hailed El Salvador's president on Sunday, noting that 10 more people who are alleged to be members of two gangs were deported for imprisonment. He said an "alliance" between the U.S. and El Salvador has "become an example for security and prosperity in our hemisphere." El Salvador's prison services are costing U.S. taxpayers an estimated $6 million. The Associated Press: The State Department appealed to staff in a memo to report anonymously or by name alleged instances of anti-Christian bias during the Biden administration. The outreach occurred as the U.S. diplomatic corps braces for pending budget and staff cuts, under White House discussion today. 👀 MILITARIZED FEDERAL LANDS: Trump has ordered the U.S. military to control federal lands along the U.S. southern border in multiple states. CNN reported that migrants who cross in border areas would be placed in "holding" locations for trespassing onto a military property, until the Department of Homeland Security could arrive to pick them up and deport them — putting the military in the position of effectively detaining migrants, something that is traditionally a law enforcement function. 🤳 DOGE & SENIORS: The Social Security Administration shifted its official messaging to Elon Musk's social media platform X after cutting the agency's communications staff (Federal News Network and The Hill). Objections? Social Security serves many senior clients who do not have X accounts, don't routinely use social media, do not own or access devices to look at social media and would not intuitively turn to X to get key official updates and information about Social Security. 📈 CONTRACTORS COST HOW MUCH?: The Food and Drug Administration discovered that some of the administration's aggressive layoffs left the agency without key personnel. The FDA now expects to hire contractors. 🌬️ CLIMATE RESEARCH CUTS: At the National Oceanic and Atmospheric Administration, home to the National Weather Service and its lifesaving meteorological assessments and public alerts, Trump's budget plan calls for cuts in science and climate research spending, likely to get underway well before a GOP budget can be enacted later this year. NOAA uses the word "climate" without a scientific causation overlay. It refers to weather results observed over time. 🩺 TRUMP HEALTH: A three-page memo from the president's physician released on Sunday described Trump as in "excellent health" and "fully fit" to serve as the nation's chief executive and commander in chief. Trump, 78, last summer had a colonoscopy and removal of a benign polyp, and at an unspecified date had cataracts removed. His weight during Friday's exam was 224 (a loss of 20 pounds since his 2020 physical when he was borderline obese). He takes medication for his cholesterol and aspirin for cardiac health, and he underwent a battery of tests, including a cognitive screening on Friday at Walter Reed National Military Medical Center. "Overall, I felt I was in very good shape. Good heart. A good soul. Very good soul," Trump told reporters. "I took a cognitive test. I don't know what to tell you other than I got every answer right." The president was referring to a score of 30 out of 30 on a Montreal Cognitive Assessment test. |
- The House will meet for a pro forma session at 9 a.m.
- The Senate will convene for a pro forma session at 8:45 a.m.
- The president will greet Nayib Bukele, president of El Salvador, at 11 a.m. at the White House ahead of a bilateral meeting and lunch. Trump will participate at 3 p.m. in a visit to the White House by college football national champions from The Ohio State University.
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©️ The Associated Press | Mark Schiefelbein
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When lawmakers return to Washington after their April recess, the future of Medicaid could make or break Trump's domestic agenda. That's because the federal-state health care program for the poor is on the chopping block among many Republicans who cannot enact the president's ambitious budget agenda without also subtracting some big dollars to offset the costs of lowering taxes and paying for Trump priorities. Medicaid has become a ripe target for cuts. The federal government argues the states can adjust their individual budgets. It looms as a politically precarious argument for some Republicans in the House and Senate, whose states would struggle without funding from Washington to afford the rising costs of health coverage among low-income constituents and the physicians who treat them. West Virginia Sen. Jim Justice, a former governor, is among Republicans who champion the importance of Medicaid in his state because more than 28 percent of the population qualifies for low-income medical benefits. West Virginia could lose more than half a billion federal dollars under the GOP budget proposal pending in Congress. The proposal in the House would slice $880 billion from the federal Medicaid budget, according to an analysis released last month. On a per capita basis, West Virginia would see the largest Medicaid cut in the nation, if it's enacted. Justice and fellow West Virginia Sen. Shelley Moore Capito (R) recently voted with their party for a budget resolution that relies on the proposed GOP Medicaid math. Some of the press coverage at home focused on their statements. "I'm going to tread lightly here," Capito told WCHS TV last month. "I want to make sure that our benefits are still there for that 500,000 people [in West Virginia]," she said, adding there is room for Medicaid improvement. Republicans have said they favor new work requirements. Mountain State Spotlight: Capito recently said she wants states to pick up more of state-federal Medicaid costs. Kentucky, another red state, has a similar percentage of enrollees, with more than 28 percent covered by Medicaid. Louisiana, home to Speaker Mike Johnson (R), has enrolled more than 32 percent of its population in the state-federal health insurance program for the poor. Meanwhile, Democrats, whose votes may not be required to propel Trump's budget into law, are nonetheless practiced at pummeling the majority party using a political and up-to-the-minute economic narrative. Their perspective: The GOP seeks to make permanent hefty tax breaks to benefit the wealthy and big companies at the expense of help for low-income Americans. Democrats in Congress are organizing registration-only town hall gatherings during their work periods at home this month to "Fight Back Against Trump." Minnesota Democrats, for example, kicked off a series of seven planned state events, launched Saturday and scheduled to conclude April 22. ▪ The Hill: Hardline conservative House Freedom Caucus members say they have commitments to include $1.5 trillion in budget cuts, which would almost assuredly put Medicaid on the chopping block. ▪ The Hill: Congress left town last week without dealing with a major budget squeeze it created for Washington, D.C. DEI: Military academies could increasingly show what Trump wants to see from public schools and colleges, The Hill's Lexi Lonas reports. While K-12 districts and universities are fighting back against book removals, transgender athlete bans and the termination of diversity, equity and inclusion (DEI) programs, the administration has a far freer hand at military institutions. Unlike public schools, military ones fall under a whole different set of laws and regulations and are under the direct control of Trump and Secretary of Defense Pete Hegseth, though a recent protest at a military middle school in Germany shows students are not entirely on board with their reforms. ▪ The Hill: The Education Department's demand that K-12 districts and state officials certify their schools are free of DEI programs is being met with open defiance from blue states and open arms by red ones. |
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©️ The Associated Press | Majid Asgaripour, Mehr News Agency
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IRAN: U.S. and Iranian delegations held preliminary diplomatic talks in Oman about Tehran's nuclear program on Saturday. The initial talks ended with a handshake between Iranian Foreign Minister Abbas Araghchi and White House envoy Steve Witkoff. Both sides described the meetings as constructive. The next round of talks, set for next weekend in Rome, could lead to the first official face-to-face negotiations between the two countries since Trump withdrew the U.S. from a landmark Obama-era Iran nuclear deal during his first term. The White House said the talks were "positive and constructive" and a "step forward in achieving a mutually beneficial outcome." Witkoff "underscored to Dr. Araghchi that he had instructions from President Trump to resolve our two nations' differences through dialogue and diplomacy, if that is possible," the White House said in a statement. ▪ The New York Times: What to know about the U.S.-Iran nuclear talks. ▪ Reuters: Araghchi will visit Russia this week and will consult with Moscow regarding the U.S.-Iran talks. ▪ The Wall Street Journal: Iran is seeking sanctions relief for nuclear limits. UKRAINE: Trump told reporters Saturday that negotiations for a ceasefire between Russia and Ukraine were "going fine," but he indicated there needs to be a resolution soon. "I think Ukraine-Russia might be going OK. And you're going to be finding out pretty soon," Trump said aboard Air Force One. "There's a point at which you have to either put up or shut up. We'll see what happens, but I think it's going fine." The comments come as U.S. and Ukrainian officials met on Friday to discuss the U.S.-proposed rare minerals deal. A source told Reuters that prospects for a breakthrough were low given the meeting's "antagonistic" atmosphere — stemming from the White House's latest, more expansive, draft proposal. Meanwhile, Witkoff met Russian President Vladimir Putin in St. Petersburg on Friday. The Kremlin said the meeting lasted for more than four hours and focused on "aspects of a Ukrainian settlement." Meanwhile, on CBS's "60 Minutes," Ukrainian President Volodymyr Zelensky said he fears Russia's three-year war on Ukraine could escalate if Ukraine, supported by its allies, does not stand firm against further Russian military advancement. "If we do not stand firm, he will advance further," Zelensky said. "It is not just idle speculation; the threat is real. Putin's ultimate goal is to revive the Russian empire and reclaim territories currently under NATO protection. Considering all of this, I believe it could escalate into a world war." ▪ The Hill: Maternal mortality rates have declined significantly across the world since the turn of the century, but global health experts fear that progress could be rolled back as a result of the Trump administration's cuts to U.S. foreign aid. ▪ Politico: As tariffs hit Europe, Italian right-wing Prime Minister Giorgia Meloni has pitched herself as a broker between Washington and the European Union. She'll get to prove her negotiating skills at a meeting with Trump at the White House this week. |
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- Poof! There goes America's competitive advantage in a warming world, by Robinson Meyer, guest essayist, The New York Times.
- On tariffs, it's good to be Tim Cook, by The Wall Street Journal editorial board.
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©️ The Associated Press | Jordan Strauss, Invision, AP
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And finally … 🚀 An all-female crew of notables is scheduled to blast off close to 9:30 a.m. ET today from West Texas aboard a Blue Origins spaceship in search of the outer bounds of Earth's atmosphere. The celebrities suiting up for a headline-grabbing ride: Singer Katy Perry, "CBS Mornings" co-host Gayle King, former NASA rocket scientist Aisha Bowe, civil rights activist Amanda Nguyen and film producer Kerianne Flynn. Also aboard, Blue Origin owner Jeff Bezos's fiancé, Lauren Sánchez. The crew will experience about four minutes of weightlessness before the adventurers return from an 11-minute flight. |
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