Morning Report — Will Trump’s bet on tariffs be bonanza or bust?

In today’s issue:

• Can Americans afford Trump’s tariffs?
• GOP’s Stefanik staying put in House
• RFK Jr. unveils seismic HHS layoffs, overhaul
• France, U.K. pledge Ukraine support

President Trump’s new tariffs expected next week will test the patience of U.S. consumers and manufacturers who worry that an escalating trade war will hike already-inflated prices, risking an economic debacle.

Trump announced 25-percent tariffs on imported vehicles and automobile parts, a move he said will boost domestic manufacturing. The president threatened to place “far larger” tariffs on the European Union and Canada than originally planned if they join forces to retaliate.

Trump is unmoved by economists’ insistence that tariffs are a tax on American consumers and retailers, not on exporting countries. Tariffs cause “a little disturbance” and require “a little bit of an adjustment period,” the president has conceded.

“The new tariffs create confusion and logistical nightmares for those not positioned to absorb additional cost or ramp up local production,” Tom Alongi, national manufacturing practice leader at accounting firm UHY, noted in a commentary to The Hill. “Automakers and suppliers will have to be flexible and agile to meet changing requirements.”

French President Emmanuel Macron on Thursday said he expects retaliation in Europe in response to the U.S. policy.

“It’s not coherent,” Macron said. “Imposing tariffs means breaking value chains, creating inflation in the short term and destroying jobs. It’s not good for the American economy, nor for the European, Canadian or Mexican economies.”

The Wall Street Journal: What Trump’s auto tariffs mean for car buyers and automakers. Nearly half of all vehicles sold in the U.S. are imported, a figure that equates to about 7 million cars, trucks and SUVs.

NBC News: Trump prepares his biggest bet on tariffs amid voter skepticism.

The president’s on-again, off-again approach to tariffs and his statements that he might raise or lower levies depending on pushback or cooperation he sees from trading partners rattles financial markets, undercuts consumer confidence and contributed to the Federal Reserve’s recent decision to pause interest rate cuts amid this year’s uncertainty.

“Companies are going to sit on their hands,” Rick Rieder, BlackRock’s global fixed income chief investment officer, told CNBC while describing the business and investment environments. “We came into the beginning of this year and it was all about animal spirits and it seems like it’s moved to animals in hibernation,” he said, “and that can translate into slower growth for a couple of quarters.”

On Capitol Hill, some members of the president’s party express misgivings about Trump’s approach. The president, eager to explain to voters his view of trade fairness, describes Wednesday’s launch of new worldwide levies as “independence day.”

“We made a mistake,” Rep. Don Bacon (R-Neb.) told CNN. “We passed legislation that gave the president some temporary tariff authorities. I think we should look back and maybe restore the power back from Congress and take away the authorizations.”  

SMART TAKE with NewsNation’s BLAKE BURMAN:

Rep. Kat Cammack (R-Fla.) announced this week that she is pregnant — expecting her first child in August. That would make her the second congresswoman to give birth this year, after Rep. Brittany Pettersen (D-Colo.) brought her son into the world in January.

Just three weeks later, Pettersen traveled across the country to vote in Congress in person. She has now joined Rep. Anna Paulina Luna (R-Fla.) on a bipartisan bill to allow proxy or remote voting for new parents in Congress in the first 12 weeks of a child’s life.

Cammack told me this week she could be on board to support this bill as well.  

“I’m having these conversations with Rep. Luna and Pettersen, and of course with the Speaker,” Cammack said. “I think there is going to be a path forward. We want to see more women involved, and that means we have to make adjustments.”

Watch for what those adjustments could be. This is a complicated issue for some in Congress, as some conservatives have constitutional concerns about the concept of proxy voting.  

Burman hosts “The Hill” weeknights, 6p/5c on NewsNation.

3 THINGS TO KNOW TODAY:

Trump tasked the vice president to help reshape “divisive narratives” at the Smithsonian Institution, referencing the National Museum of African American History and Culture and the American Women’s History Museum.

Federal employees at agencies involved in national security are limited in unionizing, Trump ordered on Thursday.

The president signed a beautification executive order Thursday with the goal of deporting migrants in the nation’s capital and removing homeless encampments.

LEADING THE DAY

STAYING PUT: House Republicans need all the majority votes they can muster to enact their agenda this year, which is why the White House on Thursday withdrew the nomination of Trump ally Rep. Elise Stefanik (R-N.Y.) to be United Nations ambassador. Stefanik had not resigned her House seat and will remain in Congress. She recently participated in a Cabinet meeting while awaiting a Senate confirmation hearing.

“This is about stepping up as a team, and I am doing that as a leader, to ensure that we can take hold of this mandate and deliver these historic results,” Stefanik told guest host Kayleigh McEnany on Fox News’s “Hannity” Thursday night, in her first public comments since Trump announced her nomination would be withdrawn.

The New York Times: Senate Appropriations Committee Chair Susan Collins (R-Maine) on Thursday accused Trump of illegally refusing to spend $2.9 billion approved by Congress, teaming with Democrats in the simmering struggle between Congress and the White House over which has the ultimate power over federal spending.

The Hill: Trump’s senior adviser and tech billionaire Elon Musk, along with seven Department of Government Efficiency (DOGE) staffers, on Fox News defended the number of federal government employees the advisory board has moved to terminate in recent months, arguing that “almost no one has gotten fired.”

SIGNAL FALLOUT: Lawmakers in both parties are zeroing in on allegations that senior Trump officials violated federal recordkeeping laws, an element of the Signal chat-gate scandal that was initially overshadowed by a focus on whether Defense Secretary Pete Hegseth violated the Espionage Act by sharing sensitive details about a military strike. Senate Armed Services Committee Chair Roger Wicker (R-Miss.) and Jack Reed (R.I.), the top Democrat on the panel, sent a letter to the Trump administration Thursday ordering senior officials to preserve records from the group chat, which inadvertently included a journalist. Lawmakers are starting to ask how widespread the use of Signal is among top Trump administration officials and whether it complies with federal law.

“This chat was alleged to have included classified information pertaining to sensitive military actions in Yemen,” they wrote in a separate letter to the Pentagon. “If true, this reporting raises questions as to the use of unclassified networks to discuss sensitive and classified information, as well as the sharing of such information with those who do not have proper clearance and need to know.”

U.S. District Judge James Boasberg, the judge assigned to the case, on Thursday ordered every agency with officials who participated in the leaked Signal chat to preserve messages exchanged from March 11 to 15.

The New York Times: In the Oval Office Trump decried concerns over the Signal chat as a “witch hunt.”

“JUNK FEES”: The Senate voted Thursday to strike down a federal rule that caps most overdraft fees at $5, marking a win for banks and credit unions, which bristled last year in reaction to the Biden administration’s campaign against “junk fees.” The $5 change had been touted as a consumer-focused fix for a legal loophole that exempted overdraft loans from lending laws. Sen. Josh Hawley (Mo.) was the lone Republican to oppose the resolution, which cleared the Senate on a nearly party-line vote, 52-48. It will now move to the House, where Rep. French Hill (R-Ark.), who leads the House Financial Service Committee, introduced a companion resolution last month.

Business Insider: Want to avoid overcharges when a transaction goes into the red? Here are some of the top banks for overdraft protection.

WHERE AND WHEN

• The House will meet at noon on Monday. 
• The Senate will convene at 3 p.m. on Monday.
• The president at 1 p.m. will participate in a swearing-in ceremony for New Jersey U.S. Attorney Alina Habba. Trump will depart the White House for Florida at 2 p.m.
• Vice President Vance and second lady Usha Vance will visit the Department of Defense’s Pituffik Space Base in Greenland during a revised trip to receive a briefing about Arctic security issues and meet with U.S. service members. 

ZOOM IN

HEALTHIER AMERICA? The Health and Human Services Department will shrink from 82,000 to 62,000 employees nationwide and undergo a major restructuring to save an estimated $1.8 billion, Secretary Robert F. Kennedy Jr. said Thursday, arguing Americans will be healthier as a result. Staffing reductions will hit the Food and Drug Administration and Centers for Disease Control and Prevention the hardest. Kennedy’s critics warn of a “man-made disaster” with the planned dramatic downsizing of the department and its agencies — and the scientific brain drain ahead. “This will be a painful period for HHS,” the secretary conceded.

Layoffs of 10,000 employees on top of 10,000 workers who voluntarily departed with buyouts won’t impact services, Kennedy said. In a major overhaul, HHS will consolidate and reimagine 28 divisions, which will be replaced by 15 new divisions, including a new Administration for a Healthy America. The overhaul also will “centralize core functions” such as human resources, information technology, procurement, external affairs and policy. Five of 10 HHS regional offices will close.

POUND FOOLISH?: Congressional Democrats say the administration’s abrupt cancellation of HHS grants to states and localities worth tens of billions of dollars is shortsighted and harmful. Federal funding for public health initially envisioned for the pandemic was also used for other health needs, such as battling measles outbreaks in Texas.

“Senselessly ripping away this funding Congress provided will undermine our state’s ability to protect families from infectious diseases like measles and bird flu and to help people get the mental health care and substance use treatment they need — causing immediate harm for millions of real people and communities across America,” said Sen. Patty Murray (D-Wash.).

KFF Health News: The Social Security Administration revised its planned and much criticized changes to phone service access to let people with disabilities call in.

The Washington Post: Federal officials are preparing for agencies to cut between 8 and 50 percent of their employees as part of a Trump administration push to shrink the federal government.

INTERNATIONAL STUDENTS: The administration has revoked the visas of more than 300 international students in the past three weeks, according to a State Department official who noted the ouster of what the department calls “Hamasniks.” Secretary of State Marco Rubio on Thursday told reporters, “We do it every day. Every time I find one of these lunatics, I take away their visas.”

The Wall Street Journal: Rumeysa Ozturk, a Turkish national with a student visa, was detained by federal authorities this week and moved to Louisiana despite a judge’s order.

Time magazine: These are the students targeted by Immigration and Customs Enforcement so far.

The Hill: The administration says it restored funding for Radio Free Europe/Radio Liberty and the Open Technology Fund after groups sued.

The New York Times: A federal judge in Maryland extended by five days a court-ordered pause on firings of probationary employees who work at more than a dozen federal agencies.

Politico: In a Thursday ruling, another federal judge blocked the administration’s ban on transgender people serving in the military.

A pair of top White House journalists for The Associated Press testified on Thursday about alleged damage to the outlet resulting from Trump’s decision to revoke some access in reaction to the organization’s refusal to adopt “Gulf of America” in its widely used stylebook. AP chief White House correspondent Zeke Miller and Evan Vucci, the AP’s top photographer in Washington, described what they called “diminished” and delayed reporting because of AP’s ouster from the daily White House press pool.

The news wire and groups advocating for press freedom argued the administration is trying to suppress news coverage it does not like to create a chilling effect.

The Hill: GOP lawmakers in 10 states want to treat abortion as homicide in proposed legislation.

ProPublica: Texas Republicans want to ease the state’s strict abortion ban because patient deaths and sepsis cases are on the rise. The change they envision: Allowing doctors to terminate pregnancies for serious medical risks without having to wait until a patient’s condition becomes life-threatening.

ELSEWHERE

UKRAINE: France and Britain will continue with plans to deploy troops in Ukraine to secure an eventual peace deal with Russia, but only some other nations want to take part, Macron said Thursday. The summit, featuring the leaders of nearly 30 countries, as well as NATO and European Union chiefs, came at a crucial juncture. Diplomatic efforts to broker ceasefires and end the war are intensifying, driven by pressure from Trump.

“These reassurance forces are a French-British proposal,” Macron said. “It is desired by Ukraine and noted by several member states that have expressed their willingness to join. It is not unanimous. That is known. Besides, we do not need unanimity to achieve it.”

Bloomberg News: The U.S. seeks to control investment in Ukraine, squeezing out Europe.

ABC News: Russian strikes hit a gas pipeline and cut electricity in Ukraine.

The Associated Press: Russian President Vladimir Putin vowed Friday to uphold his country’s interest in Greenland.

Reuters: Putin suggested that Ukraine should be placed under a temporary administration to bring an end to the war.

GAZA: Israel has given Egypt, one of the mediators in the Gaza ceasefire negotiations, positive indications for a new ceasefire proposal that would include a transitional phase and suggest Hamas release five Israeli hostages each week. The initial fragile ceasefire in the enclave expired earlier this month, prompting Israel to resume attacks and block aid access.

NPR: Food is running out in Gaza nearly a month into an Israeli blockade.

NBC News: Why protesters in Gaza want Hamas out after more than a year of war.

OPINION

■ Why doctors are so excited to use AI with their patients, by Leana S. Wen, columnist, The Washington Post.

■ Whole Hog Politics: Voters tell Trump to back off tariffs, by Chris Stirewalt, political editor, The Hill.

THE CLOSER

And finally … Congratulations to this week’s Morning Report Quiz winners! In light of the Signal leak, we asked puzzlers to consider classified leaks throughout history.

Here’s who went 3/3: Peter J. Sprofera, Lynn Gardner, Richard E. Baznik, Stan Wasser, Tom Chabot, Thomas Sadłowskí, Harry Strulovici, Brian Hogan, Michael McGinnis, Jenessa Wagner, Bill Moore, Jess A. Elger, Laura Rettaliata, Rick Schmidtke, John van Santen, Mark R. Williamson, Robert Bradley, WIlliam Chittam, Chuck Schoenenberger, Tim Burrack, David Emile Lamy, Neil Bergsman, Pam Manges, Savannah Petracca, Carmine Petracca, Stanton Kirk, Mark Roeddiger, Linda L. Field, Lee Harvey, and Terry Pflaumer.

They knew that letters Benjamin Franklin intercepted between the British and the governor and lieutenant governor of Massachusetts in 1772 sped up the colonists’ uproar with British rule.

Eagle-eyed readers spotted a mistaken reference to Supreme Court cases addressing the First Amendment. New York Times v. Sullivan was decided in 1964 and considered a Civil Rights-era advertisement soliciting donations to defend Martin Luther King Jr. New York Times v. United States, decided in 1971, was the case that covered the Pentagon Papers.

Deep Throat, Bob Woodward and Carl Bernstein’s secret informant during Watergate, was revealed to be Mark Felt, then a deputy director at the FBI.

Edward Snowden worked as a contractor for the National Security Agency when he gave four journalists classified documents revealing the existence of global surveillance programs.

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