World braces for shakeup as Trump tariffs begin

The Hill

07-08-2025

Morning Report is The Hill's a.m. newsletter. Subscribe here.
In today's issue:
▪ Sweeping U.S. tariffs kick in
▪ Trump, Putin to face each other
▪ Texas Dems receive bomb threat
▪ Epstein intrigue
President Trump has plowed ahead with sweeping tariffs on dozens of countries, following through on his months-long push to upend the global trading system even as some allies voice concern over the impact.
The average tariff rate on imports from other countries is now around 15 percent — a significant jump from the roughly 2 percent average last year.
Trump has been plotting this economic upheaval for months — since first unveiling his plan in April for 'reciprocal tariffs' on countries that sell many goods to the U.S. but buy fewer American-made products.
The president had pushed back the new implementation multiple times amid pressure from Wall Street and fellow Republicans who hoped to calm market jitters. He set new rates last week, but bumped the start to today.
About 92 countries are affected, according to an independent tariff tracker.
Trump touted the new tariffs shortly before they took effect at midnight, arguing in all-capital letters on social media that billions of dollars would start flowing to the U.S. from countries that have taken advantage of it.
'IT'S MIDNIGHT!!!' the president added a short time later on his Truth Social platform. 'BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!'
Still, American companies must decide whether to eat the higher cost of importing goods or pass them along to consumers. Many major corporations have signaled that prices for goods will increase.
'I've had retailers telling me that they think their prices will have to change in the fall. As their initial contracts change, their input price is higher [and] goods will go higher, too,' Sen. Rand Paul (R-Ky.) told The Hill recently.
Under the plan that kicked in at midnight, most countries will pay a baseline tariff rate of 10 percent, with a sliding scale up to 41 percent. Some trading partners hashed out more favorable arrangements with the White House in negotiations that have come together in recent weeks, while other nations continue to pursue agreements.
After the president's April announcement sparked a tumultuous response, markets have mostly shrugged off the new tariffs. Months of delays and negotiations have produced a number of deals with top trading partners such as the European Union, Japan, South Korea and more.
▪ The New York Times: Japan's auto giants are expecting pain despite Trump trade deal.
▪ The Wall Street Journal: Countries seek more clarity from the U.S. as Trump revamps global order.
Even as he pressed ahead with rates outlined last week, Trump has ratched up other levies and threatened more hikes.
On Wednesday, he announced a hefty increase in tariffs on India over its buying of Russian oil. The president said he was tacking on a 25 percent increase, which would take effect in three weeks, in addition to the 25 percent 'reciprocal' tariff that took effect Thursday.
'They're buying Russian oil, they're fueling the war machine. And if they're going to do that, then I'm not going to be happy,' Trump told CNBC.
Trump said Wednesday that he may also increase tariffs on semiconductors to '100 percent.'
'We're going to be putting a very large tariff on chips and semiconductors,' he told reporters at the White House.
▪ CNN: China seizes the moment to praise 'beloved Brazilian coffee' as Trump's tariffs take effect.
Whether Trump has the authority to levy his sweeping duties is still being scrutinized in court.
The White House has broadly cited the International Emergency Economic Powers Act (IEEPA) — a 1977 law authorizing the president to issue certain economic sanctions in an emergency to counter an 'unusual and extraordinary threat' — to justify the moves.
'It's just hard for me to see that Congress intended to give the president in IEEPA the wholesale authority to throw out the tariff schedule that Congress has adopted after years of careful work and revise every one of these tariff rates,' Appeals Court Judge Timothy Dyk said during a recent hearing.
Former Speaker Paul Ryan (R-Wis.), who worked on trade while on Capitol Hill, said in an interview Wednesday he thinks the emergency tariff authority Trump has cited for the hikes is likely to be struck down by the Supreme Court.
'[The market thinks that tariffs] are going to settle into some easy, predictable place, and I just don't think that's going to happen,' Ryan added in an interview on CNBC.
Other Republicans on Capitol Hill have admitted to feeling jittery over the trade restructuring after a Trump-disputed jobs report showed the economy added far fewer jobs than previously estimated over the past three months.
APPLE OF TRUMP'S EYE: Tech giant Apple announced a major investment Wednesday in growing its manufacturing endeavors stateside — a crucial goal of Trump's push for higher tariffs.
Apple CEO Tim Cook joined Trump at the White House to announce a new $100 billion U.S. investment to boost domestic production of its products.
While speaking to reporters after their announcement, Cook praised Trump as 'a great advocate for American innovation and manufacturing.'
▪ CNBC: Apple and Trump detail $100 billion U.S. spending expansion, including $2.5 billion for an iPhone glass factory.
IT'S TIME: The clock is ticking on Trump's timeline for naming a new head of the Bureau of Labor Statistics (BLS) after he abruptly fired the former commissioner on the heels of a dismal jobs report last week.
The president said Sunday he would have a new pick to lead the government's official employment tracker 'over the next three, four days' — putting things squarely in that timeframe today, though it could shift.
Trump drew significant backlash from economists and others over his decision to fire BLS head Erika McEntarfer over alleged 'inaccuracies' and 'incompetence' after the release of the bureau's July report.
Trump also has said he is whittling down his list of potential Federal Reserve chair candidates as he prepares to name a successor to Chair Jerome Powell 'soon.'
▪ Politico magazine: 'You're Asking Me to Contemplate the Nuclear Scenario': A former Federal Reserve official gets candid about Trump's firing of the BLS chief.
▪ CNN: Trump says the Bureau of Labor Statistics orchestrated a 'scam.' Here's how the jobs report really works.
▪ The Hill: Trump 'has convinced himself' the jobs data was manipulated, according to New York Times reporter Maggie Haberman.
Smart Take with Blake Burman
The House Oversight and Government Reform Committee kicked the Epstein investigation up a notch this week, issuing subpoenas for six former attorneys general, two former FBI directors and former president Bill Clinton, along with former Secretary of State Hillary Clinton.
Committee Chair James Comer (R-Ky.) joined me for a wide-ranging interview. He acknowledged that it's rare to try to compel testimony from a former president, but that he was serious about the investigation. He said the same expectations applied to Attorney General Pam Bondi, who was asked to hand over all records related to the case.
'We've made it clear with the White House that this is something people expect,' Comer told me. 'This is something the president's base wants. This is something that obviously Democrats want. So, we're going to do everything we can to get it, and so far we're working in a bipartisan manner.'
Among the many items that stood out to me: Comer said his constituents in Kentucky are talking about the case and want him to keep going.
Burman hosts 'The Hill' weeknights, 6p/5c on NewsNation.
3 Things to Know Today
Five U.S. soldiers were shot Wednesday at Georgia's Fort Stewart. Officials identified the suspect as Sgt. Quornelius Radford, 28. All the injured soldiers are in stable condition.
Sen. Jon Ossoff's (D-Ga.) office said it found hundreds of 'credible reports of human rights abuse' of people held in immigration detention centers across the country.
United Airlines said a 'technology issue' that prompted a national ground stop Wednesday evening has been resolved.
Leading the Day
FACE-OFF: Trump is set to meet with Russian President Vladimir Putin in the coming days as the U.S. leader presses for an end to the war in Ukraine. The Kremlin confirmed today that agreement has been reached for the meeting to take place and preparations are underway.
It would mark the pair's first meeting since Trump returned to office this year and the first face-to-face between an American and Russian president since 2021 when former President Biden met Putin in Geneva.
Trump and Putin have spoken multiple times over the phone since January, but what was historically a friendly relationship soured in recent weeks as the war in Ukraine drags on.
Trump has decried Russia's continued bombing of Ukrainian civilians, and pledged arms sales to Ukraine via European nations. Special envoy Steve Witkoff met with Putin in Moscow for three hours on Wednesday as Trump's shortened ceasefire deadline with Ukraine approaches and new sanctions loom. Trump's timeline, which he cut down from 50 days, is set to expire tomorrow.
Trump first raised the idea of meeting with Putin, and then later for a meeting that would include Ukrainian President Volodymyr Zelensky, during a call with European allies on Wednesday, a source confirmed to The Hill. The Kremlin on Thursday did not agree to a trilateral meeting. But Zelensky on Wednesday said he believed Russia was more likely to agree to a ceasefire than previously, and he argued pressure from the U.S. is a key reason.
Secretary of State Marco Rubio said Wednesday that Witkoff will return from Moscow with a framework for peace between the two countries.
'The specific timing of it is not discussed,' Rubio told Larry Kudlow during an appearance on Fox Business Channel. 'I think what we have is a better understanding of the conditions under which Russia would be prepared to end the war. We now have to compare that to what the Ukrainians and our European allies, but the Ukrainians primarily, of course, are willing to accept.'
▪ The Hill: Democratic Sens. Elizabeth Warren (Mass.) and Jeanne Shaheen (N.H.) on Wednesday published a report condemning Trump for delaying sanctions on Russia.
▪ BBC: How Trump's secondary tariffs on Russia could hit the global economy.
When and Where
The president will sign executive orders at noon in the Oval Office. At 4 p.m., he will deliver remarks in the East Room.
The House and Senate are in recess until September.
Zoom In
REDISTRICTING DOGFIGHT: More than 50 Texas Democratic lawmakers have scattered to several blue states in an effort to block their Republican colleagues from passing what Democrats see as a heavily gerrymandered congressional map during a special legislative session. The new map would give the GOP five additional solidly red districts in the Lone Star State.
Over the course of the week, the battle over Republicans' push to create more safe House seats has widened, with red and blue states moving to counteract each other and politicians vowing aggressive partisan combat. Texas Republicans have threatened to arrest the Democratic lawmakers, with Sen. John Cornyn (R-Texas) calling for FBI involvement.
▪ The Hill: Five things to know about possible FBI involvement in the Texas redistricting battle.
The Trump administration appears to be turning its attention to other red states that could follow Texas's lead. Vice President Vance is expected to visit Indianapolis on Thursday to speak with Indiana Gov. Mike Braun (R) amid chatter about potential mid-cycle redistricting in the Hoosier State. Braun has said there've been no commitments, but he told reporters he expects 'they're going to come into every state that's got the possibility of that happening.'
The developments suggest even more states could get involved in the redistricting war sparked by the proposed redraw in Texas, threatening to further complicate next year's high-stakes midterms.
BLUEPRINT: Florida Gov. Ron DeSantis (R) knows what it's like to have a redistricting fight on his hands. DeSantis redrew congressional lines after the 2020 census — when his state gained one congressional seat — weathering claims that the map disempowered minority voters and defeating opponents in a 2022 court case contesting the map.
'We were the laboratory here in Florida,' Democratic strategist Fernand Amandi, who is based in Miami, told The Hill's Amie Parnes. '[DeSantis] was able to do it, and not only got away with it but showed the bottom-line success of the approach.'
BOMB THREAT: Democratic state legislators staying in Illinois were evacuated from their suburban Chicago hotel on Wednesday morning following a threat at the property, and a news conference set to feature Sen. Dick Durbin (D-Ill.) was canceled.
State Rep. John Bucy III (D-Texas) told NBC News the legislators and other guests spent about two hours outside the hotel Wednesday morning and said they're 'going to continue to fight this fight for voting rights.'
In response, Gov. JB Pritzker (D) authorized Illinois State Police to become involved in protecting the lawmakers. Pritzker on Tuesday night praised the lawmakers during an appearance on CBS's 'The Late Show with Stephen Colbert.'
'Donald Trump is trying to steal five seats from the people — frankly, of the country, not just the people of Texas — and disenfranchise people,' Pritzker said. 'We're talking about violating the Voting Rights Act and the Constitution.'
▪ Politico: Texas Democrats could be fined nearly $400,000 for fleeing the state.
CAN'T LOOK AWAY: Trump is facing a Ghislaine Maxwell problem, The Hill's Brett Samuels reports.
Public testimony from Maxwell, an associate of Jeffrey Epstein who was convicted in 2021 on sex trafficking charges, could help satisfy Trump supporters who have clamored for more transparency around the Epstein case. But it comes with risks, Samuels notes.
Administration officials are weighing whether to publicly release some of Maxwell's testimony to Deputy Attorney General Todd Blanche, but elevating Maxwell would keep the Epstein controversy front and center after Trump and top GOP leaders in the House have spent weeks trying to tamp down outrage among their own base.
Trump has repeatedly declined to rule out a pardon for Maxwell, saying only that he has the power to do it but hasn't thought about her case. The administration raised eyebrows by moving Maxwell to a lower-security prison in Texas without explanation.
'There's no question they're trying to thread the needle,' one White House ally told The Hill.
NON-MEETING: Trump and Vance blasted reports on Wednesday that said a group of top administration officials planned to gather to discuss whether to publish audio and a transcript of Blanche's interview with Maxwell. Reuters reports that the high-level meeting was supposed to happen, but was canceled once information leaked to the press.
CNN first reported of the planned meeting at the vice president's residence. The meeting was reportedly expected to include Vance, White House chief of staff Susie Wiles, Attorney General Pam Bondi, FBI Director Kash Patel and Blanche.
▪ Axios: The prosecutor who negotiated Epstein's sweetheart deal was left off of the House GOP's subpoena list.
▪ The Wall Street Journal: Democrats see a political upside — and risks — in the Epstein files.
BLUE-JEAN SWEENEY: The GOP is infatuated with Sydney Sweeney, a rising star in Hollywood whose 'great jeans' American Eagle tagline became a controversy — one that conservatives have enjoyed highlighting. The affair with Sweeney and Republicans didn't necessarily start with the jeans ad, though the photoshoots of the denim-clad actress were widely seen by the MAGAverse as being unapologetically American and rejecting liberal sensibilities about beauty and inclusivity.
SELLING THE MEGABILL: Republicans are facing a big task this August recess as they sell Trump's controversial 'big, beautiful bill,' which has low favorability ratings, to the public. But as the Democratic Congressional Campaign Committee points out in a new campaign memo, it's an uphill battle. NOTUS reports that the Democrats' campaign arm predicts the megabill will be 'THE defining issue of the midterms.'
'In the few weeks since being sent home early for the summer, House Republicans have been inundated with a deluge of negative headlines, protests at their district offices, and Letters to the Editor, sending one loud and clear message: Voters HATE the Big, Ugly Law and are outraged at House Republicans for passing it,' the memo reads.
That frustration is becoming evident at GOP town halls: Audience members jeered Rep. Mike Flood (R-Neb.) at a Monday event, shouting 'Liar!' and 'You don't care about us!' as he made the case for the megabill. Many Republicans are dismissing the outbursts, alleging they have been choreographed by Democrats and groups aligned with them and do not reflect genuine voter sentiment.
▪ NPR: Flood on his viral town hall moment.
To pitch the megabill, the GOP is leaning heavily on the U.S. Chamber of Commerce to host 100 roundtable meetings this month in states around the country. Much of the debate on Capitol Hill focused on Medicaid cuts and the impact on the deficit, which made the bill unpopular, so Republicans and their business allies are trying to drum up more attention on the tax-relief components.
Tim Monahan, vice president and managing director of government affairs at the U.S. Chamber of Commerce, said a 'lesson learned' after 2017 is that Republicans need to continue talking about the benefits of tax cuts after they've been enacted — a goal that was not fully accomplished after Trump's first tax package passed eight years ago.
'One of the most comprehensive tax reform bills in the history of our country got done and people kind of stopped talking about it,' he told The Hill's Alexander Bolton.
▪ The Hill: Trump's megabill could deplete Social Security's trust funds faster.
▪ ProPublica: Many of the Republican lawmakers who have targeted the Consumer Financial Protection Bureau for cuts have collectively directed thousands of constituents' complaints to the agency.
OTHER CONGRESS NEWS:
▪ The Hill: A Florida Republican official and beauty pageant title-holder accused Rep. Cory Mills (R-Fla.) of threatening to release explicit videos of her after their romantic relationship ended earlier this year. Mills told The Hill in a statement that the claims 'are false and misrepresent the nature of my interactions.'
▪ The Hill: Are 'pocket rescissions' legal? The congressional watchdog says 'no.'
▪ The Hill: Sen. Marsha Blackburn (R-Tenn.) officially tossed her hat in the ring for the Tennessee governor's race. The Volunteer State Republican is running to replace outgoing Gov. Bill Lee (R), who is term-limited.
▪ Rolling Stone: A 'glitch' was to blame for parts of the Constitution being removed from a Library of Congress-run website.
TOTAL CONTROL: Israel's security Cabinet today is expected to approve Benjamin Netanyahu 's plans to seize areas of Gaza it doesn't already control as the prime minister faces increasing pressure over the war both at home and abroad. Trump does not oppose Netanyahu's plan to occupy the entirety of Gaza, Axios reports, with sources saying Trump is leaving the Israeli government to make its own decisions.
The Israeli military says it already controls 75 percent of Gaza after nearly two years of war. Netanyahu is under intense international pressure to reach a ceasefire in the enclave, which has been reduced to rubble. Most of the population of about 2 million has been displaced, and aid groups say residents are on the verge of famine.
▪ The New York Times: The Gaza Humanitarian Foundation will soon operate 16 distribution sites instead of four, according to U.S. Ambassador to Israel Mike Huckabee.
▪ The Washington Post: Leaked drafts of the State Department's annual human rights reports indicate that the White House intends to dramatically scale back U.S. government criticism foreign nations with records of abuse, including Israel, El Salvador and Russia.
Opinion
The economy is cracking. This trend is most alarming, by Heather Long, columnist, The Washington Post.
Sorry, Billionaires — There's No Escape, by playwright David Mamet in The Wall Street Journal.
The Closer
And finally … It's Thursday, which means it's time for this week's Morning Report Quiz! Inspired by the Texas redistricting fight, we're eager for some smart guesses about the history of congressional mapmaking.
Be sure to email your responses to [e-mail] and [e-mail] — please add 'Quiz' to your subject line. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.
Who is the namesake of gerrymandering?
1. President Gerald Ford
2. Sen. Peter G. Gerry (D-R.I.)
3. Vice President Elbridge Gerry
4. Comedian Jerry Lewis
The Cook Political Report lists how many of the 435 House districts as 'toss ups' — where either party could win — in the 2026 cycle?
1. 18
2. 56
3. 5
4. 35
Which newspaper first coined the term 'Gerry-mandering'?
1. The New York Times
2. The Boston Gazette
3. The Daily Telegram
4. The Wichita Daily Eagle
How frequently does redistricting typically take place?
1. Every 15 years
2. Every two years
3. Every year
4. Every 10 years