In the week since President Trump surprised the world with an aggressive mix of universal tariffs and a catalog of steep reciprocal tariffs that took effect early this morning, the U.S. and China entered a trade war.
Tariffs on Chinese goods are now an astounding 104 percent and Beijing, blasting Trump's moves as "blackmail," vows to "fight to the end." The president predicts China eventually will want to deal.
Dozens of other nations as well as the European Union are now subject to tariffs from 11 percent to 50 percent.
"I know what the hell I'm doing," Trump told House Republicans Tuesday night during a Washington fundraising dinner.
The president defended his trade policies and told lawmakers "a major tariff" on imported pharmaceuticals will be announced "very shortly." India and China lead global drug production.
Overnight, investor anxiety contributed to a global stock selloff. U.S. futures were volatile, while Japanese and European stocks opened lower in search of a trade endgame, a reliable timeline or perhaps a U.S. signal that negotiations with tariffed nations will spell some relief — the faster the better.
Economists predict higher inflation, perhaps a recession and a painful period of transition for many businesses, farms, auto manufacturers and millions of U.S. families. The Chamber of Commerce and other top industry groups are weighing a risky option to sue Trump to try to halt the tariffs, The Wall Street Journal reports. A group financed by billionaire Charles Koch and conservative legal activist Leonard Leo already took that step in court.
Another tariff shock is slated to occur on May 3, when the administration will apply tariffs to auto parts. Even cars made in the U.S. will be affected because virtually all vehicles are made with imported components. Repairs will become more expensive.
Auto companies are challenged to plan. How long will the tariffs last? What will U.S. consumers be able to afford? "The traditional playbook is not enough," Lenny LaRocca, who leads the auto industry team at the consulting firm KPMG, told The New York Times.
The president, who complains the U.S. has been "ripped off" by unfair trade and currency practices, says he's willing to talk to individual countries to cut deals but unwilling to pause U.S. tariffs while discussions take place.
The U.S. will begin formal talks with Japan, Treasury Secretary Scott Bessent said Monday. Trump on Tuesday said he had a "great call" with South Korea's acting President Han Duck-soo ahead of today's 25 percent U.S. tariff on goods coming from the Asian ally.
The Hill: GOP lawmakers fear China looms as an obstacle to Trump's trade vision. A drawn-out trade war with Beijing poses serious economic implications for U.S. companies, including Boeing, Caterpillar, Deere & Co., Nvidia, Intel and Apple.
On the sidelines, top business, banking and hedge fund leaders have questioned the administration's strategy. They fault the White House tariff calculations and the absence of a timeline, and they warn that Trump's tariff endeavor may complicate enactment of the permanent tax cuts he seeks by the fall.
The Hill: Why Trump's tariffs may do little to pay for tax cuts.
Some of Trump's supporters and podcast influencers, including Ben Shapiro and Joe Rogan, have used their megaphones to challenge the president's approach to tariffs.
Senate Republicans, reacting to Wall Street's slide and worried about industries in their states, say they're frustrated by conflicting messages about tariffs coming from the administration.
"It has a different impact on a New York tech firm than it might have on a Hoosier soybean farmer," Sen. Todd Young (R-Ind.) told U.S. Trade Representative Jamieson Greer during a hearing Tuesday. "And I hope that's something that's being factored into your analysis."
When asked about timing for trade negotiations with other countries, Greer told senators the trade deficit won't be "solved overnight."
"What I can say is, I'm moving as quickly as possible, and a lot of these countries are moving very quickly, and we're working on the weekends. We're working at night, as folks want to engage on this," he added.
Greer will field more questions today when he testifies before members of the House Ways and Means Committee.
Democrats in Congress have been quick to predict that Trump will "own" a recession if already ebbing U.S. growth comes to a halt.
The Hill: Former Trump Commerce Secretary Wilbur Ross, 87, has some thoughts about the president's tariffs and Howard Lutnick, the newest head of the Commerce Department.
Energy: Oil, gas and coal executives have pushed back against some recent Trump decisions. Coal received the president's executive attention Tuesday with federal orders to bolster the sagging industry, which has clashed with global ambitions to curb greenhouse gas emissions. Trump seeks fewer restrictions on coal mining, leasing and exports in what the White House said is an effort to meet the needs of energy-hungry data centers for artificial intelligence (AI).
Immigrants: In a major change, the IRS agreed to provide Immigration and Customs Enforcement with tax data to be used to locate migrants without legal status for deportation. Melanie Krause, acting IRS commissioner, is resigning following the decision.
DOGE: Administration funding cuts are forcing scientists to abandon their work and the patients who benefit, The New Yorker reports.
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