The Latest: White House responds to ruling against tariffs as US economy shrinks

Hamilton Spectator

29-05-2025

The White House is expressing confidence it can overcome a federal trade court ruling blocking President Donald Trump from imposing sweeping tariffs on imports under an emergency-powers law. The ruling casts doubt on Trump's signature set of economic policies that have rattled global financial markets, frustrated trade partners and raised broader fears about inflation intensifying and the economy slumping.
Trump has now overseen
the first shrinking of the US economy
in three years — a 0.2% drop in first-quarter GDP brought down by a surge in imports as companies rushed to get ahead of his massive tax increases. Consumer spending also slowed sharply, and
more Americans filed for unemployment benefits
as the ranks of jobless grew to 1.92 million people.
Chinese students studying in the U.S. are scrambling to figure out their futures after Secretary of State Marco Rubio said
the U.S. will begin revoking the visas of Chinese students
studying in 'critical fields.' China trails only India in sending international students to the United States. One such student calls this a new version of the racist 19th Century Chinese Exclusion Act.
Here's the Latest:
Trump administration tries again to block Harvard's enrollment of foreign students
The Trump administration issued a notice of intent to withdraw the university's certification enabling it to
enroll international students.
The letter sent Wednesday by acting Immigration and Customs Enforcement director Todd Lyons gives Harvard 30 days to respond to the alleged grounds for withdrawal, which include accusations that Harvard coordinated with foreign entities and failed to respond sufficiently to antisemitism on campus.
The government's earlier attempt to stop Harvard from enrolling international students was swiftly blocked by a federal court.
White House confident court ruling blocking tariffs won't stop trade talks
Economic adviser Kevin Hassett said negotiations with other countries won't be disrupted by a court striking down most of Trump's tariffs.
'If there are little hiccups here or there because of decisions that activist judges make, then it shouldn't just concern you at all,' Hassett said on Fox Business Network's 'Mornings with Maria. 'And it's certainly not going to affect the negotiations, because in the end, people know President Trump is 100% serious. They also have seen that President Trump always wins.'
He also suggested that the administration would not pursue other legal avenues to relaunch the tariffs, as the judges advised, since those 'would take a couple of months to put' into place and the White House is 'very, very confident' that the ruling by the New York-based U.S. Court of International Trade is incorrect.
The US military, eyeing China deterrence, could draw down deployments to South Korea
The Trump administration is not ruling out a reduction in forces deployed to South Korea as it determines what regional presence it needs to best counter China.
That's according to two senior American defense officials traveling with Defense Secretary Pete Hegseth to Singapore.
There are 28,500 U.S. troops deployed to South Korea to help defend against any North Korean attack. But the U.S. is also trying to optimize its forces and ships across the Indo-Pacific to defend Taiwan and other allies against aggression from China.
No decision has been made on the number of troops deployed to South Korea, and any future footprint would be optimized to defend against moves by both Pyongyang and Beijing, according to the two officials, spoke on condition of anonymity to discuss deliberations that have not been made public.
A possible reduction in forces was first reported by The Wall Street Journal.
16 states sue over National Science Foundation cuts
A spokesperson for the NSF isn't commenting.
Recent cuts to the
independent federal agency
with a $9 billion budget affect hundreds of university researchers across the U.S. who were working on a wide variety of projects, including artificial intelligence, PTSD in VA patients and efforts to make science, technology and engineering more diverse. And the White House is proposing a 55% cut for the next fiscal year.
The lawsuit filed Wednesday in the Southern District of New York argues that Congress has for years authorized the NSF to create programs to increase the number of women, minorities and people with disabilities in science, math, technology and engineering, and that the NSF's new priorities are 'irreconcilable with its statutory mandates.'
The cuts 'weaken the very foundation' of areas that 'power innovation, create high-paying jobs and keep our economy strong,' Oregon Attorney General Dan Rayfield said in a statement.
Plaintiffs applaud tariffs ruling
Lawyers for small businesses who challenged Trump's 'Liberation Day' tariffs are applauding the ruling that struck them down.
'It's great to see that the court unanimously ruled against this massive power grab by the president,' said Ilya Somin, a George Mason University law professor who worked on the case with the libertarian-leaning Liberty Justice Center. They represent small businesses who said the tariffs were a major threat to their livelihoods.
Victor Schwartz, a small wine importer, calls the ruling a 'win' for his businesses and others across the country. He said he's ready to see the case through the Supreme Court as the Trump administration appeals.
Trump administration quickly appeals tariffs ruling
The Trump administration says they'll go to the Supreme Court if necessary as they appeal a ruling striking down sweeping tariffs the president imposed under an emergency powers law.
The Justice Department argues that the Court of International Trade must pause it ruling now. It calls this halt 'critical for the country's national security and the president's conduct of ongoing delicate diplomatic efforts.'
The Trump administration is first asking the same three judges who ruled against him to halt their own order pending the appeal. If those judges refuse, it plans to go to a federal appeals court and then the Supreme Court if necessary.
The Trump administration has canceled $766 million paid to Moderna for vaccine development
The drugmaker is
developing a vaccine
against potential pandemic influenza viruses, including the H5N1 bird flu.
Health Secretary Robert F. Kennedy Jr. has expressed deep skepticism regarding mRNA vaccines, despite real-world evidence that the vaccines are safe and saved millions of lives.
The company said it was notified Wednesday that the Health and Human Services Department had withdrawn funds awarded in July 2024 and in January. The new vaccine, called mRNA-1018, uses the same technology that
enabled the development
and
rollout of vaccines
to fight Covid-19 in record time.
The cancelation came as Moderna announced positive interim results from an early-stage trial of the vaccine that targeted H5 bird flu virus, tested in 300 healthy adults.
▶ Read more about
RFK Jr.'s cancellation of mRNA vaccine research
Financial indexes jump on trade court ruling against Trump tariffs
Wall Street and financial markets around the world jumped after a
U.S. court ruled
that President Donald Trump is not authorized to impose
sweeping tariffs
on imports under an emergency-powers law.
Futures for the S&P 500, the Dow Jones Industrial Average and Nasdaq — home to chipmakers and the biggest American technology companies — all rose before U.S. trading began Thursday. Nvidia shares jumped 6% in off-hours trading.
The White House immediately appealed the ruling by the U.S. Court of International Trade in New York, and it's unclear if Trump will abide by the ruling before a final resolution. The long-term outcome remains uncertain, but investors appeared to take heart after months of turmoil from
Trump's on-again, off-again trade war.
US says economy contracted 0.2% in first quarter amid Trump trade war tumult
Trump has now overseen the first shrinking of the U.S. economy in three years. The gross domestic product was brought down by a surge in imports as companies in the United States hurried to bring in foreign goods before the president imposed massive import taxes.
The January-March drop in the nation's output of goods and services reversed a 2.4% gain in the fourth quarter of 2024. The Commerce Department also says that consumer spending also slowed sharply.
And the Labor Department says more Americans filed for jobless aid last week, with applications jumping by 14,000 higher than the forecast. The total number of Americans receiving unemployment benefits increased to 1.92 million.
Chinese students anxious and angry after Rubio vows to revoke visas
Chinese students studying in the U.S. are scrambling to figure out their futures after Rubio announced that some students would have their visas revoked.
This is a 'new version of Chinese Exclusion Act,' said Linqin, a Chinese student at Johns Hopkins University, who asked to be identified only by his first name out of fear of retaliation. He was referring to a 19th-century law that prohibited Chinese from immigrating to the U.S. and banned Chinese people already in the U.S. from getting citizenship. He said Wednesday was the first time he thought about leaving the U.S. after spending one-third of his life here.
The issue of Chinese students studying overseas has long been a point of tension in the bilateral relationship. During Trump's first term, in 2019, China's Ministry of Education warned students about visa issues in the U.S., with rising rejection rates and shortening of visas.
▶ Read more
about the reaction from students
Trump rejects claim he's 'chickening out' on tariffs just because he keeps changing rates
Trump wants the world to know he's no 'chicken' just because he's repeatedly backed off
high tariff threats
.
The U.S. Republican president's tendency to levy extremely high import taxes and then retreat has created what's known as the 'TACO' trade, an acronym coined by The Financial Times' Robert Armstrong that stands for 'Trump Always Chickens Out.' Markets generally sell off when Trump makes his tariff threats and then recover after he backs down.
Trump was visibly offended when asked about the phrase Wednesday and rejected the idea that he's 'chickening out,' saying that the reporter's inquiry was 'nasty.'
'You call that chickening out?' Trump said. 'It's called negotiation,' adding that he sets a 'ridiculous high number and I go down a little bit, you know, a little bit' until the figure is more reasonable.
▶ Read more
about Trump's comments
Secretary of State Marco Rubio says the US will begin revoking the visas of Chinese students
Secretary of State Marco Rubio said Wednesday the U.S. will begin revoking the visas of some Chinese students, including those studying in 'critical fields.'
China is the second-largest country of origin for international students in the United States, behind only India. In the 2023-2024 school year, more than 270,000 international students were from China, making up roughly a quarter of all foreign students in the United States.
'Under President Trump's leadership, the U.S. State Department will work with the Department of Homeland Security to aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields,' Rubio wrote.
The Chinese Embassy in Washington didn't immediately respond to a message seeking comment Wednesday night.
The action comes at a time of intensifying scrutiny of the ties between U.S. higher education and China. House Republicans this month pressed Duke University to cut its ties with a Chinese university, saying it allowed Chinese students to gain access to federally funded research at Duke.
▶ Read more
about the U.S. revoking Chinese student visas
Trump issues a series of pardons for politicians, a union leader and a rapper
Trump issued a series of pardons on Wednesday, awarding them to a former New York congressman, a Connecticut governor, a rapper known as 'NBA YoungBoy,' a labor union leader and a onetime Army officer who flaunted safety measures during the coronavirus pandemic.
Trump's actions mixed his willingness to pardon
high-profile Republicans and other supporters, donors and friends
with the influence of
Alice Marie Johnson
, whom Trump recently named his pardon czar after he offered a pardon to her in 2020.
Trump also commuted the sentence of Larry Hoover, a former Chicago gang leader serving a life sentence at a supermax prison in Colorado. Hoover was first imprisoned in connection with a murder in 1973, and was convicted of running a criminal enterprise in 1998, but later renounced his criminal past and petitioned for a reduced sentence.
Gaulden's and the other pardons were confirmed Wednesday evening by two White House officials who spoke only on background to detail actions that had not yet been formally made public.
▶ Read more
about the pardons
Elon Musk is leaving the Trump administration after leading effort to slash federal government
Elon Musk
is leaving his government role as a top adviser to Trump after spearheading efforts to reduce and overhaul the federal bureaucracy.
His departure, announced Wednesday evening, marks the end of a turbulent chapter that included thousands of layoffs, the evisceration of government agencies and reams of litigation. Despite the upheaval, the billionaire entrepreneur struggled in the unfamiliar environment of Washington, and he accomplished far less than he hoped.
Musk's role working for Trump was
always intended to be temporary
, and he had recently signaled that he would be shifting his attention back to running his businesses, such as the electric automaker Tesla and the rocket company SpaceX.
'As my scheduled time as a Special Government Employee comes to an end, I would like to thank President @realDonaldTrump for the opportunity to reduce wasteful spending,' he wrote. 'The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government.'
▶ Read more
about Musk's departure
What happens to Trump's tariffs now that a court has knocked them down?
The court's decision blocks the tariffs Trump slapped last month on
almost all U.S. trading partners
and levies he imposed before that on China, Mexico and Canada.
Wendy Cutler, a former U.S. trade official who is now vice president at the Asia Society Policy Institute, says the court's decision 'throws the president's trade policy into turmoil.'
'Partners negotiating hard during the 90-day day tariff pause period may be tempted to hold off making further concessions to the U.S. until there is more legal clarity,' she said.
Likewise, companies will have to reassess the way they run their supply chains, perhaps speeding up shipments to the United States to offset the risk that the tariffs will be reinstated on appeal.
For now, the trade court's ruling 'destroys the Trump administration's rationale for using federal emergency powers to impose tariffs, which oversteps congressional authority and contravenes any notion of due process,' said Eswar Prasad, professor of trade policy at Cornell University. 'The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power.'′
▶ Read more
about what could happen to Trump's tariffs
Federal court blocks Trump from imposing sweeping tariffs under emergency powers law
A federal court on Wednesday blocked Trump from
imposing sweeping tariffs
on imports under
an emergency-powers law
, swiftly throwing into doubt Trump's signature set of economic policies that have rattled global financial markets, frustrated trade partners and raised broader fears about inflation intensifying and the economy slumping.
The ruling from a three-judge panel at the New York-based U.S. Court of International Trade came after several lawsuits arguing Trump's 'Liberation Day' tariffs exceeded his authority and left the country's trade policy dependent on his whims.
Trump says he has the power to act because the country's trade deficits amount to a national emergency.
The court found the 1977 International Emergency Economic Powers Act does not authorize the use of tariffs. The plaintiffs argued that the trade deficit is not an emergency because the U.S. has run a trade deficit with the rest of the world for 49 consecutive years.
▶ Read more
about the federal court's ruling