Trump's tariff two-step

Politico

06-03-2025

Presented by The U.S. Chamber of Commerce
THE CATCH-UP
IT'S NOT EASY BEING GREEN: Texas Democratic Rep. Al Green has formally been censured for his outbursts during President Donald Trump's joint address to Congress. The House voted 224-198 this morning to admonish the lawmaker for his actions, with 10 Democrats joining all Republicans in voting for the punishment.
Quite the scene: 'Typically a censured member is immediately made to stand in the well of the House to formally receive punishment. But Green and more than a dozen colleagues stood in the well singing 'We Shall Overcome' after the vote, forcing Speaker Mike Johnson to put the House in recess instead,' POLITICO's Nick Wu and Ben Jacobs write.
TARIFFS, ANDS OR BUTS: Trump appears to be retreating even further on his punitive tariffs, announcing today that he is delaying the 25 percent levies on Mexico until next month for all imports that fall under the existing USMCA trade deal. However, Trump made no mention of whether his tariffs on Canada will also be delayed.
What Trump said: 'This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President [Claudia] Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!'
What it means: 'The tariffs on Mexican goods would, in theory, go back into force the same day the White House says it plans to impose reciprocal tariffs on all U.S. trading partners, based off a calculation of the trade barriers each foreign country imposes on U.S. goods,' POLITICO's Ari Hawkins writes.
The (live) view from Wall Street: 'Dow drops more than 400 points, S&P 500 hits lowest since early November on trade policy fatigue,' by CNBC's Alex Harring and Pia Singh
The backstory: On Monday, Canadian PM Justin Trudeau and Sheinbaum both tried to get Trump on the phone to talk him down on tariffs. No dice. So both dispatched deputies to bend the ears of Trump's top aides, to no avail. Trump went ahead with the 25% tariffs on Tuesday, 'making clear the fatal flaw in the negotiating process: Only Trump speaks for Trump, and the president wanted to move forward,' WSJ's Vipal Monga, Santiago Pérez and Gavin Bade report in a behind-the-scenes look on how the saga unfolded.
A WHOLE LOTTA LAYOFFS: In the latest sign of how significant Trump's shakeup has been for the economy since taking office again, layoffs from U.S. employers 'jumped to levels not seen since the last two recessions amid mass federal government job cuts, canceled contracts and fears of trade wars,' Reuters reports.
The raw numbers: 'Global outplacement firm Challenger, Gray & Christmas said on Thursday that planned job cuts vaulted 245% to 172,017 last month, the highest level since July 2020, when the economy was in the grips of the Covid-19 pandemic. It was the highest February total since the Great Recession 16 years ago.'
Meanwhile: The Labor Department noticed today that applications for jobless benefits 'fell last week as the labor market remains sturdy ahead of an expected purge of federal government employees,' per AP's Matt Ott. 'The number of Americans filing for jobless benefits fell by 21,000 to 221,000 for the week ending March 1, the Labor Department said Thursday. That's significantly fewer than the 236,000 new applications analysts expected.'
Related read: 'The Recession Trade Is Back on Wall Street,' by WSJ's Sam Goldfarb: 'Investors entered 2025 optimistic that an already strong U.S. economy could get an extra boost from an administration pushing market-friendly tax cuts and regulatory rollbacks. Instead, trade tensions and signs of slowing growth have driven major indexes lower in recent weeks.'
THE DOGE WAGS THE TAIL: In remarkable comments that illustrate the level of command that Elon Musk's DOGE operation has already exerted across the government, acting Social Security Administration Commissioner Leland Dudek told a group this week that DOGE is essentially in charge of the SSA, WaPo's Lisa Rein, Jeff Stein and Hannah Natanson report. 'Things are currently operating in a way I have never seen in government before,' Dudek said.
The details: 'In a meeting Tuesday with his senior staff and about 50 legal-aid attorneys and other advocates for the disabled and elderly,' Dudek 'referred to the tech billionaire's cost-cutting team as 'outsiders who are unfamiliar with nuances of SSA programs.'' He continued: ''DOGE people are learning and they will make mistakes, but we have to let them see what is going on at SSA,' Dudek told the group, according to the notes. 'I am relying on longtime career people to inform my work, but I am receiving decisions that are made without my input. I have to effectuate those decisions.''
The latest cuts: The gutting of the government has come to the CIA, NYT's Julian Barnes and Mark Mazzetti report. 'Some officers hired in the last two years have been summoned to a location away from the agency's headquarters in Langley, Va., and asked to surrender their credentials to security personnel,' though it's not clear how many officers are set to be fired and not all probationary employees will be impacted. NYT notes that there 'appeared to be fewer firings in key areas like collecting information on China and Mexican drug cartels.' Still, the cuts have 'devastated morale, and cut productivity this week.'
ONE-WAY TICKET TO NOWHERE: Five Democratic senators are asking DOJ in a letter to AG Pam Bondi to open an investigation into whether Musk is using his perch in the Trump administration to get advertisers back onto his X platform, WSJ's Suzanne Vranica reports.
TEST CASE: Musk's efforts to remake the federal government are also straining a rarely tested 50-year-old law meant to protect sensitive information on millions of Americans, POLITICO's Alfred Ng writes. 'At least a dozen lawsuits trying to stop the billionaire's Department of Government Efficiency from tapping into tax records, student loan accounts and other troves of personal data have invoked the Privacy Act of 1974 since January.'
INTERESTING READ: 'Many Chinese See a Cultural Revolution in America,' by NYT's Li Yuan: 'People in China are expressing alarm at what seems to be an authoritarian turn in the United States, long their role model of democracy, that feels familiar.'
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7 THINGS YOU NEED TO KNOW
1. NATO NO MORE?: Trump is mulling a massive shift in America's participation in NATO — an alliance that he has often criticized since his first administration. Trump has 'discussed with aides the possibility of calibrating America's NATO engagement in a way that favors members of the alliance that spend a set percentage of their gross domestic product on defense,' NBC's Courtney Kube, Carol Lee and Julie Tsirkin report. 'As part of the potential policy shift, the U.S. might not defend a fellow NATO member that is attacked if the country doesn't meet the defense spending threshold, the officials said.'
2. UPENDING UKRAINE: The Trump administration is considering a plan to 'revoke temporary legal status for some 240,000 Ukrainians who fled the conflict with Russia,' which could potentially set them up for a 'fast-track to deportation,' Reuters' Ted Hesson and Kristina Cooke report. FWIW, White House press secretary Karoline Leavitt posted a screenshot of the Reuters report, calling it 'fake news' from sources 'who have no idea what they are talking about.' She concluded: 'The truth: no decision has been made at this time.' Which, for the record, isn't an outright 'this is never happening.' We'll see.
Cutting the link: Officials in Ukraine are worried that the Trump administration's pullback on military aid and intelligence sharing could lead Musk to cancel his Starlink internet service that many in the country have grown to rely on, WaPo's Serhiy Morgunov and Adam Taylor report. 'Front-line commanders are increasingly concerned that the military has grown too reliant on Starlink, a product of Musk's SpaceX, and it could become the latest pressure point for the White House as it pushes Ukraine to engage in peace talks with Russia and sign a deal giving the United States access to its minerals.'
Across the pond: EU leaders today 'gathered at a specially convened meeting in Brussels to discuss how to bolster both Europe's own defenses and its support for Ukraine amid enormously high stakes,' NYT's Jeanna Smialek reports. 'They must figure out how to accomplish these aims without further alienating their tempestuous allies in Washington. At the same time, they are struggling to keep a united front even among their own member countries as Hungary strikes a critical note toward Ukraine. Officials heading into the meeting expressed a new sense of urgency as they pledged to push for a strong peace for Ukraine and a more independent future for European defense.'
3. NEWSOM OPENS A NEW DEMOCRATIC DIVIDE: On his new podcast, California Gov. Gavin Newsom said Democrats were in the wrong in allowing transgender athletes to participate in female college and youth sports, POLITICO's Christopher Cadelago writes. 'It is an issue of fairness — it's deeply unfair,' Newsom said in the debut episode of 'This is Gavin Newsom' during a conversation with MAGA influencer Charlie Kirk. 'I am not wrestling with the fairness issue. I totally agree with you.'
The statement stunned some Newsom supporters who've long viewed the former San Francisco mayor as a pioneering ally for LGBTQ+ rights who in the past has displayed an independent streak to defend them. Newsom's comments quickly prompted California Democrats, including Rep. Ro Khanna, to decry his position.
What else?: Newsom also agreed that the most politically destructive attack ads from Trump's campaign were those that hit Kamala Harris over her support for providing taxpayer-funded gender transition-related medical care for detained immigrants and federal prisoners. 'She didn't even react to it, which was even more devastating,' Newsom said, adding: 'Then you had the video [of Harris] as a validator. Brutal. … It was a great ad.'
4. MIDDLE EAST LATEST: Hamas today shrugged at Trump's demand for the remaining hostages to be released immediately and 'reiterated that it will only free the remaining Israeli hostages in exchange for a lasting ceasefire in the Gaza Strip,' AP's Samy Magdy reports. 'The militant group accused Trump and Israeli Prime Minister Benjamin Netanyahu of trying to back out of the ceasefire agreement they reached in January. … Hamas spokesman Abdel-Latif al-Qanoua said the 'best path to free the remaining Israeli hostages' is through negotiations on that phase, which were supposed to begin in early February.'
Elsewhere: The White House is 'considering a plan to stop and inspect Iranian oil tankers at sea under an international accord aimed at countering the spread of weapons of mass destruction,' Reuters' Jonathan Saul and Jarrett Renshaw report.
5. CAUGHT UP ON CAMPUS: 'As Trump Goes After Universities, Students Are Now on the Chopping Block,' by NYT's Stephanie Saul: 'In the early weeks of the Trump administration's push to slash funding that colleges and universities rely on, grants and contracts had been cut and, in a few cases, researchers had been laid off. In recent days, the fiscal pain has come to students. … Since taking office, the Trump administration has issued orders that threaten to broadly undercut the financial foundation of university based research, including deep reductions in overhead cost reimbursements through the National Institutes of Health. Court challenges have paused some of the cuts, but universities are bracing for uncertainty.'
Related read: 'Facing Trump's threats, Columbia investigates students critical of Israel,' by AP's Jake Offenhartz
6. WHAT WE DO IN THE SHADOWS: 'Who Paid for Trump's Transition to Power? The Donors Are Still Unknown,' by NYT's Ken Bensinger: 'After six weeks in office, President Trump has not disclosed the names of the donors who paid for his transition planning, despite a public pledge to do so. … A spokesperson for the General Services Administration, which works closely with presidential transitions, said in a statement that 'the Trump-Vance Transition Team is not required to publicly disclose transition-related donations since they did not accept the services and funds outlined in' the memorandum of understanding that the agency offered the transition last fall.'
7. SOCIAL WORK: WaPo's Drew Harwell and Sarah Ellison chronicle the recent shift in strategy to 'transform the traditional White House press shop into a rapid-response influencer operation, disseminating messages directly to Americans through the memes, TikToks and podcasts where millions now get their news,' carrying on a piece of the Trump campaign's success. 'Trump's allies are now pushing a parallel information universe of social media feeds and right-wing firebrands to sell the country on his expansionist approach to presidential power. For the Trump team, that has involved aggressively confronting critics … not just to 'reframe the narrative' but to drown them out, said Kaelan Dorr, a deputy assistant to the president who runs the digital team.'
TALK OF THE TOWN
MEDIA MOVE — Scott Matthews is joining MSNBC as SVP of newsgathering based in New York. He previously was VP and news director at WABC-TV.
FIRST IN PLAYBOOK — Dan Jacobson is launching Jacobson Lawyers Group PLLC, a new law firm to represent companies and organizations impacted by the Trump administration's moves on federal funding. He previously was general counsel in the Biden administration's OMB.
TRANSITIONS — Jenny Yang is now a partner at Outten & Golden. She previously was deputy assistant to President Joe Biden for racial justice and equity, and is a former Equal Employment Opportunity Commission chair. … Cornerstone Government Affairs is adding Terry Van Doren, Colleen Kaveney Moss and Andy Flick to its federal government relations team. Van Doren previously was senior policy adviser to Senate Minority Leader Mitch McConnell. Moss previously was managing director for industrial policy and advocacy at ClearPath. Flick previously was special assistant to the president and senior adviser for congressional affairs and strategic outreach in VP Kamala Harris' office. …
… Groundwork Collaborative is adding Emily DiVito as senior adviser for economic policy, J.W. Mason as a senior fellow, and Akhil Rajan, Alejandro Molina, Andrés Arguello, Chad Maisel and Michael Negron as policy fellows. DiVito most recently was at the Roosevelt Institute. Mason is an associate professor at John Jay College. The inaugural class of policy fellows were all most recently working across the Biden administration. … David Francis will be VP of global growth strategy and government affairs at Jetr Global Sports + Entertainment. He previously was senior adviser for government affairs at the U.S. Olympic & Paralympic Committee.
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Correction: Yesterday's Playbook PM misstated the network on which CIA Director John Ratcliffe spoke that morning. It was Fox Business Network.