Trump girds for trade war

PRESIDENT TRUMP is returning to the U.S. from Scotland ahead of a pivotal week for the economy, with reciprocal tariffs set to go into effect Friday for all countries that haven’t reached a new trade deal with the U.S.

U.S. and Chinese officials met in Stockholm on Tuesday for a third round of negotiations. The two sides appear to be close to an agreement to further a tariffs truce to allow more time to reach a new longterm deal. 

“They had a very good meeting with China, they’re going to brief me tomorrow and and we’ll either approve it or not,” Trump told reporters aboard Air Force One on his flight back to the U.S. “I think the result is probably good.”

Trump said he expects to meet with Chinese President Xi Jinping by the end of the year.

During his trip to Scotland, Trump secured a landmark trade deal with the European Union (EU).

Some European officials believe the EU caved to Trump and gave him a sweetheart deal.

Democrats, meanwhile, have described the deal as smoke and mirrors.

The EU trade deal sets tariffs on European goods at 15 percent, down from Trump’s threatened 30 percent levy. As part of the deal, the EU will lower tariffs, open its markets to new U.S. products, and pledged to make hundreds of billions of investments in the U.S. in the coming years.

Democrats are seizing on anonymous quotes from EU officials, who said the investments in the U.S. come from the private sector and can’t be enforced by the government.

“Trump would have you believe it’s the biggest deal ever,” Senate Minority Leader Chuck Schumer (D-N.Y.) said. “Europe has admitted that this agreement isn’t legally binding, and they have no control over whether these investments even happen.”

The president got a boost Tuesday, with the International Monetary Fund (IMF) upgrading its economic outlook for the U.S. after determining Trump’s tariffs had proved less damaging to the world economy than expected.

Still, the IMF warned that tariffs are a net negative for global trade.

“This modest decline in trade tensions, however fragile, has contributed to the resilience of the global economy so far,” IMF chief economist Pierre-Olivier Gourinchas said at a press conference Tuesday. “This resilience is welcome, but it is also tenuous. While the trade shock could turn out to be less severe than initially feared, it is still sizeable, and evidence is mounting that it is hurting the global economy.”

In addition to the EU, Trump has so far announced trade deals with Japan, the Philippines, Indonesia and the United Kingdom.

The countries that have not reached a deal with the U.S. will be staring down steep tariffs Friday after Commerce Secretary Howard Lutnick said there would no more pauses and no more extensions.

The White House sent dozens of letters earlier this month informing countries of their new rates, with Canada looking at 35 percent, Mexico at 30 percent, South Korea at 25 percent and Brazil at 50 percent.

Trump’s tariffs will face an important legal challenge Thursday, just a day before they’re slated to go into effect.

A court of appeals will hear oral arguments in a case involving small business owners suing Trump to challenge his legal authority to impose tariffs without going through Congress.

Republicans see opportunity in the tariffs, which have opened a new line of revenue to the U.S. Treasury.

Sen. Josh Hawley (R-Mo.) introduced a bill to provide $600 tariff rebates to almost all Americans and their dependent children.

Hawley said in a statement that “Americans deserve a tax rebate after four years of Biden policies that have devastated families’ savings and livelihoods.”

The Hill’s Alexander Bolton reports: “The legislation would be modeled on the direct payments Congress authorized in the 2020 CARES Act, which provided $1,200 direct payments to adults and $500 direct payments to children.”

Perspectives:

• RealClearPolitics: Trump’s trade lesson for economists.

• The Wall Street Journal: Trump, EU avoid a trade war.

• The Hill: Democratic coalition has a crack that is getting bigger.

• The Liberal Patriot: A fascinating new look at America’s political tribes.

• HyperText: It’s time for abundance Dems to embrace cultural moderation.

Read more: 

• Why is Trump struggling in the polls?

• Stellantis faces $1.7B hit from US tariffs this year.

• P&G raising some prices in part due to Trump tariffs.

• Two of the largest U.S. railroads, Union Pacific and Norfolk Southern, announced a plan to combine in a $72 billion deal that would create America’s first transcontinental freight railroad. Here’s what to know about the merger.

   

• New York Democrats will introduce a bill allowing them redraw their congressional lines in the middle of the decade if another state does it first. The effort seeks to counter Texas’s move to redraw their maps ahead of the 2026 midtmerms, instead of at the end of the decade, as is customary.

• Tomorrow: The latest issue of The Gavel, The Hill’s courts newsletter, diving into the big legal battles in Washington. Click here to sign up & get it in your inbox.

©  Greg Nash

President Trump’s relationship with Israeli Prime Minister Benjamin Netyanyahu is under the microscope, as signs of strain emerge over the hunger and humanitarian crisis in Gaza.

Netanyahu insists there is no starvation crisis.

“Those are kids that are starving,” Trump told reporters on Air Force One on his way back to the U.S. on Tuesday.

Pressed about what he’d say about the situation to Netanyahu, Trump said he’s “trying to get things straightened out.”

Trump’s remarks are a rare break with Israel, ramping up pressure on the U.S. ally to address the humanitarian crisis stemming from the nearly two-year long war that began on Oct. 7, 2023, when Hamas launched a broad attack, including targeting civilians at a music festival.

The Integrated Food Security Phase Classification (IPC), the leading international authority on food crises, issued an alert Tuesday saying the worst-case scenario of famine is playing out in Gaza.

“We’re going to give a lot of money to the area so they can get some food…hopefully it’s going to be properly distributed and it will be,” Trump said. “I think it will be.”

Netanyahu and Trump have blamed Hamas for disrupting aid distribution in the region. Trump said Tuesday he and the Israeli leader are on the same page about getting food to starving people.

“Israel wants to do it,” Trump said.

Trump was asked if more pressure should be applied to Israel to end the crisis.

“You’re rewarding Hamas if you do that and I don’t think they should be rewarded, but I’m not in that camp,” he responded.

British Prime Minister Keir Starmer said Tuesday the United Kingdom would follow France in recognizing a Palestinian state if Israel doesn’t take immediate steps to end the war in Gaza.

U.S. officials have repeatedly said they’ve been unable to strike a deal with Hamas, which refuses to release remaining hostages.

It was once rare to see Republicans break with Israel, but it’s become more common among the MAGA-wing of the GOP, led by Rep. Marjorie Taylor Greene (R-Ga.).

Greene has described the humanitarian crisis in Gaza as “horrific” and this week she blasted her colleague, Rep. Randy Fine (R-Fla.), for saying Gaza can “starve away” until Hamas releases the hostages.

In doing so, Greene broke with most members of her party by describing the Israeli campaign in Gaza as a “genocide.”

“It’s the most truthful and easiest thing to say that Oct 7th in Israel was horrific and all hostages must be returned, but so is the genocide, humanitarian crisis, and starvation happening in Gaza,” Greene posted on X.

“But a Jewish U.S. Representative calling for the continued starvation of innocent people and children is disgraceful,” she added. “His awful statement will actually cause more antisemitism.”

A new Gallup survey finds support for Israel’s military action in Gaza at 32 percent, a new low.

💡 Perspectives:

• Commentary: The truth matters in Gaza.

• The Guardian: Never stop protesting over Gaza’s starvation.

• The Free Press: Did Obama’s national security team break the law?

• American Prospect: The progressive with a plan for Democrats.

• New York: Cuomo and Adams attack each other instead of Mamdani.

Read more: 

• Russia kills 22 in Ukraine despite Trump threats.

• Trump’s foreign policy tested by Israel, Russia.

• Iraq’s prime minister seeks closer US ties.

• Jewish Dems lead pressure on Trump to address Gaza crisis.

• New York Jewish leaders reluctant to fight against Mamdani.

Officials say a 27-year-old man with a “documented mental health history” killed four people and seriously wounded another during a shooting spree at a Midtown Manhattan office tower Monday evening.

A New York City police officer, 36-year-old Didarul Islam, is among the victims killed in the attack.

Police identified Shane Tamura from Las Vegas as the alleged shooter. Tamura died of a self-inflicted gunshot wound.

The shooting took place in the lobby and on the 33rd floor of the 345 Park Avenue building.

New York City Mayor Eric Adams (I) said Tamura was headed to the NFL headquarters in the building but got off on the wrong floor.

Tamura left a note claiming he suffered from CTE from playing football as a child. He asked for his brain to be preserved and studied.

©  Elizabeth Williams, Associated Press

An attorney for Ghislaine Maxwell said she would only speak with the House Oversight Committee if she’s granted immunity.

The committee, which subpoenaed for Maxwell for testimony about convicted sex offender Jeffrey Epstein, denied the demand from Maxwell’s attorney.

“The Oversight Committee will respond to Ms. Maxwell’s attorney soon, but it will not consider granting congressional immunity for her testimony,” committee spokesperson Jessica Collins said in a statement.

Maxwell has petitioned the Supreme Court to overturn her sex trafficking conviction. Her attorney, David Oscar Markus, argued her testimony could jeopardize that effort.

“Any testimony she provides now could compromise her constitutional rights, prejudice her legal claims, and potentially taint a future jury pool,” Markus wrote.

“Public reports—including your own statements—indicate that the Committee intends to question Ms. Maxwell in prison and without a grant of immunity,” he added. “Those are non-starters. Ms. Maxwell cannot risk further criminal exposure in a politically charged environment without formal immunity.”

Democrats are seeking new ways to keep the pressure on the Trump administration for more details on the Epstein case.

Senate Minority Leader Chuck Schumer (D-N.Y.) on Tuesday called for the FBI to conduct a risk assessment to determine whether foreign countries might have intelligence linking Trump and Epstein that could be used as blackmail.

Senate Judiciary Committee ranking member Dick Durbin (D-Ill.) is demanding the Justice Department (DOJ) turn over all recordings, transcripts and notes from its interview last week with Maxwell.

Vice President Vance dismissed those demanding more transparency.

“We’re not shielding anything,” Vance said at a press conference in Ohio to promote the Trump agenda bill. “He’s been incredibly transparent about that stuff, but some of that stuff takes time.”

MEANWHILE…

The Trump administration is ramping up its investigations into elite universities over antisemitism and hiring practices.

• The Education Department and the Department of Health and Human Services opened an investigation into Duke University and the Duke Law Journal for allegedly using race-based discrimination to pick law journal members.

The Hill’s Lexi Lonas reports: “The departments want Duke to review and reform these policies, make ‘necessary’ personnel changes and give assurances to the government the university is following its new standards.”

• The University of California, Los Angeles, agreed to pay more than $6 million in a consent agreement after Jewish faculty and students brought an antisemitism lawsuit against the school over its handling of pro-Palestinian campus demonstrations.

• The DOJ’s investigation at George Mason University over its diversity programs has expanded to include individual members of faculty after professors published a resolution supporting the university’s diversity efforts.

According to The New York Times: “In a letter sent on Friday, the Trump administration said it would seek drafts of the faculty resolution, all written communications among the Faculty Senate members who drafted the resolution, and all communications between those faculty members and the office of the university’s president, Gregory Washington.”

The Times also reports that Harvard is open to spending up to $500 million to resolve its myriad disputes with the Trump administration.

ELSEWHERE…

• Health and Human Services Secretary Robert F. Kennedy Jr. says he will overhaul the Vaccine Injury Compensation Program, which compensates people who suffer adverse reactions from vaccines.

• The Environmental Protection Agency will propose to repeal its landmark 2009 finding that greenhouse gases pose a threat to the public, which has been used as the legal justification for climate regulations.

💡 Perspectives:

• Derek Thompson: Should we all be taking GLP-1 drugs?

• After Babel: The achievement gap we’re not talking about.

• USA Today: Colbert canned because Americans are tired of left’s lectures.

• City Journal: Detroit – back from the dead?

• The Hill: Don’t just listen to what voters say — they will show what they care about.

Read more: 

• Trump tightens reins on foreign students.

• Trump’s EPA embraces climate denial as it works to upend regulations.

• Trump memo allows federal workers to persuade coworkers their religion is ‘correct’.

• 5 takeaways from Trump’s Scotland trip.

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