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‘Buckle in’: Top economist says Trump’s tariffs may backfire
02:32 – Source: CNN
‘Buckle in’: Top economist says Trump’s tariffs may backfire
02:32
• Auto tariffs stoke trade war: President Donald Trump announced a 25% tariff on all cars and car parts shipped to the US, drawing global criticism. Canada’s prime minister said the move was a “direct attack” that violated the US-Mexico-Canada trade agreement.
• Signal scandal: A federal judge will hold an emergency hearing today over the Cabinet-level Signal chat scandal as top Trump officials deflect blame and downplay the leak. The White House declined today to give an update on the chat investigation, calling the episode a “mistake.” You can read an annotated version of the texts here.
• Key agency cuts: The US Department of Health and Human Services is planning to cut 10,000 full-time employees across health agencies, the department told CNN, as the administration continues its government overhaul. This comes on top of 10,000 employees who’ve left voluntarily.
After President Donald Trump signed an executive action authorizing 25% tariffs on cars and car parts imported to the US, leaders from foreign countries likely to be hit hardest by the taxes shared sharp public criticism.
Here’s what foreign leaders and officials have been saying:
Canada: Prime Minister Mark Carney said the tariffs was a “direct attack” in violation of the US-Mexico-Canada Agreement and that Ottawa would examine its options for a response — including possible retaliatory tariffs. Canada’s Cabinet Committee on Canada-US Relations convened a meeting this morning to discuss its options.
Mexico: Mexican President Claudia Sheinbaum said she would offer a “comprehensive response” to the tariffs on April 3, but signaled that her government is working behind the scenes to remove or reduce fees on certain Mexican-assembled autos and parts.
Japan: Prime Minister Shigeru Ishiba said Tokyo would consider “all options” in response to the tariffs.
South Korea: Auto companies are expected to experience considerable difficulties due to the tariffs on cars and auto parts, trade minister Ahn Duk-geun said. Ahn held an emergency response meeting with representatives from automobile companies, industry associations and research institutions to discuss the tariffs.
On Tuesday, Hyundai committed to investing $21 billion in the US over the next three years. The investment would focus on expanding its manufacturing capabilities.
European Commission: President Ursula von der Leyen said tariffs would hurt Americans, though she didn’t promise any retaliation. The EU had announced retaliatory tariffs in response to steel and aluminum tariffs Trump levied this month but postponed them in hopes of a negotiated agreement.
China: Unlike its Asian rivals, China’s car industry is largely insulated from this round of tariffs. The Biden administration increased tariffs on Chinese electric vehicles to 100%, which has effectively shut them out of the market. Nonetheless, foreign ministry spokesperson Guo Jiakun accused the US of violating World Trade Organization rules by imposing the auto tariffs.
The United Kingdom is not planning imminent retaliatory tariffs on car imports from the US, UK Chancellor Rachel Reeves said. The US is the second-largest market for UK car exports after the European Union, according to data from the Society of Motor Manufacturers and Traders.
The ranking member of the Senate Committee on Homeland Security and Governmental Affairs is asking the directors of 24 federal agencies to explain whether individuals affiliated with the Department of Government Efficiency are following privacy and cybersecurity laws as they access sensitive systems and databases.
In a series of letters dated March 24, Michigan Democratic Sen. Gary Peters asked the head of agencies — including the departments of Justice, Homeland Security, State and Defense — to identify all DOGE-affiliated individuals working within their agencies and name all agency systems those individuals have access to. The letter asks for that information before April 11.
CNN previously reported the Elon Musk-led initiative has sought access to highly sensitive taxpayer data housed at the Internal Revenue Service. A federal judge earlier this month blocked the Social Security Administration from giving DOGE access to data that contained the personally identifiable information of millions of Americans.
Senate Armed Services Chair Roger Wicker, a Republican from Mississippi, and ranking Democrat Jack Reed — in a letter dated Wednesday to the acting Department of Defense inspector general — requested an investigation and assessment of the Signal chat incident.
Wicker declined Wednesday evening to say his committee is conducting a full investigation into the Signal chat controversy. “We are commissioning fact-finding, oversight processes about that,” Wicker said.
The White House declined to offer an update on its internal investigation into the Signal group chat of top Trump national security officials, calling the incident a “mistake.”
Asked by CNN this morning about the status of the investigation promised yesterday, press secretary Karoline Leavitt told reporters that she did not have any new information, but said the White House has been “incredibly transparent about this entire situation.”
Senate Armed Services Chairman Roger Wicker has said that he and the top Democrat on the panel, Sen. Jack Reed, are formally asking the administration for an inspector general report on the Signal chat and a classified briefing from a senior official, but Leavitt said Thursday that the White House has yet to see any requests from Congress.
As top officials cast the group chat reporting as a “hoax” and seek to malign The Atlantic’s Jeffrey Goldberg, Leavitt claimed the White House has “never denied that this was a mistake,” pinning blame on national security adviser Mike Waltz.
Leavitt also highlighted Trump’s auto tariff announcement, calling it a “great thing for auto workers” as she previewed the promised reciprocal tariffs coming next week.
Judge James Boasberg is calling the Trump administration into court today at 4 p.m. ET for an emergency hearing over the Cabinet-level Signal chat about a Yemen attack this that inadvertently included a journalist.
An advocacy group has sued because of the chat, accusing department secretaries and intelligence chiefs of flouting federal records laws with the auto-delete features of the Signal texting app.
Lawsuits like these can be difficult lifts legally in court for outside groups. But concerns over the use of Signal for federal business now could prompt the judge — the chief of Washington, DC’s federal trial court, who has extensive experience with records law and national security and intelligence matters, and whom President Donald Trump has tried to paint as a political foe in recent weeks — to ask questions of the Cabinet officials and seek answers quickly.
More on Boasberg: The assignment is a mere coincidence, because the DC District Court randomly assigns cases to its collection of judges. That practice is typical among federal courts.
Boasberg is also currently overseeing the case challenging Trump’s use of the Alien Enemies Act, where he has been fighting with the Justice Department to obtain more information on deportation flights that left the US in possible defiance of a court order.
Trump and his allies, including billionaire Elon Musk, have repeatedly criticized Boasberg for his handling of the migrants case, even calling for his impeachment, drawing a rebuke from much of the legal community, including Chief Justice John Roberts.
The Signal chat case is likely to draw their attention to the judge again if Boasberg pushes for more information from top administration officials or orders a change in agencies’ approach to using encrypted apps.
This post has been updated with more about the judge.
The US Department of Health and Human Services will announce today that it is cutting 10,000 full-time employees across health agencies, the department told CNN.
In its announcement, HHS said it will consolidate from 28 to 15 divisions, including a including a new division, Administration for a Healthy America, and will reduce regional offices from 10 to five.
The cuts were first reported by The Wall Street Journal.
This comes on top of 10,000 employees who’ve left voluntarily, amounting to shrinking by about a quarter of the workforce.
HHS said Thursday that cuts will include:
- 3,500 full-time employees at the US Food and Drug Administration, not affecting drug, medical device or food reviewers, nor inspectors
- 2,400 employees at the US Centers for Disease Control and Prevention
- 1,200 employees at the National Institutes of Health by centralizing procurement, human resources and communications
- 300 employees at the Centers for Medicare & Medicaid Services
This post has been updated with more reporting on the HHS cuts.
Federal law enforcement officers captured an alleged “major leader” of MS-13 Thursday morning, President Donald Trump said on social media.
“Just captured a major leader of MS13,” he wrote.
The alleged 24-year-old gang member has not yet been publicly named.
Attorney General Pam Bondi, who was present for the raid along with FBI Director Kash Patel, said in a news conference that the man was “the leader for the East Coast, one of the top three in the entire country, right here in Virginia, living half an hour outside of Washington, DC.”
“He is an illegal alien from El Salvador, and he will not be living in our country much longer,” Bondi said.
CNN reported earlier this week that as part of the deportation flights of alleged terrorists at the center of a legal and political storm, the US quietly dropped charges against a key alleged MS-13 leader and returned him to the pro-Trump leader of El Salvador.
CNN’s Evan Perez and Priscilla Alvarez contributed reporting to this post.
This post has been updated to reflect the attorney general’s comments.
President Donald Trump wrote on a Thursday post on Truth Social that the European Union and Canada would be threatened with “large scale Tariffs, far larger than currently planned,” if they work together to “do economic harm” to the United States.
Some context: Canada’s Prime Minister Mark Carney said the tariff was a “direct attack” in violation of the US-Mexico-Canada Agreement and that Ottawa would examine its options for a response — including possible retaliatory tariffs.
European Commission President Ursula von der Leyen said tariffs would hurt Americans, but hasn’t vowed any retaliation. The EU had announced retaliatory tariffs in response to steel and aluminum tariffs Trump levied this month but postponed them in hopes of a negotiated agreement.
Tesla CEO Elon Musk said the company was not unaffected by President Donald Trump’s auto tariffs and that the impact would be “significant.”
“To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial,” he wrote in another post.
More text messages published yesterday by The Atlantic from the Signal group chat of top US officials underscored a massive breach in operational security as information about the deadly attack on Houthi targets in Yemen was shared before it was carried out.
Top US officials have maintained that the information disclosed was not classified. But sources told CNN the information Pentagon chief Pete Hegseth shared was highly classified at the time he wrote it.
President Donald Trump called the fallout “a witch hunt.” He said his national security adviser Mike Waltz took responsibility for creating the Signal group but shrugged off any culpability on Hegseth’s part. He also said nothing in the chat “compromised” the attack.
The attack killed 53 people and wounded almost 100 others, including women and children.
Here’s what to know:
- Report redacted: The Atlantic decided to redact a sensitive piece of information out of their follow-up article because they “felt it was best to do” and the CIA asked them to.
- Watch a re-enactment of the chat: CNN created an audio version of the chat using AI software with the voices reading the text neutrally. Watch here.
- New details: The newly published messages included texts The Atlantic had previously withheld because they included specific operational details Hegseth sent to the group about the timing and weapons systems the US military intended to use. You can read a full, annotated version of the texts here.
- Request for report: Senate Armed Services Chairman Roger Wicker said he and the top Democrat on the panel, Sen. Jack Reed, are asking the administration for an Inspector General report on the Signal chat for the committee to review.
- Intelligence hearing: Top Trump intelligence officials were grilled again about the incident, testifying in front of the House Select Committee on Intelligence. Gabbard acknowledged the inclusion of a journalist in the Signal discussion was a “mistake,” but reiterated her belief that the chat contained no classified information. She said the National Security Council was conducting “an in-depth review.”
CNN’s Alex Marquardt breaks down what the messages say:
In Donald Trump’s White House, it matters less what you screw up than how hard you fight back.
The uproar over operational details of military strikes on Yemen posted on a group chat among top administration officials is highlighting this fundamental rule of life in the president’s orbit.
Naive and sloppy behavior by top Trump aides could have endangered US pilots. One of the worst intelligence breaches by top officials in years, it raises grave questions about the competence of top officials meant to keep Americans safe.
But the administration’s main concern is protecting the president and his team. They are demonizing those who point out their malfeasance and embroidering the wider conspiratorial narrative that Trump is again a victim of a deep state witch hunt.
The obsession with answering a national security scandal with a fiercely political argument is characteristic of a White House that never admits wrongdoing — following one of the core principles of Trump’s pre-political life.
But the drama may already have damaged US operations in Yemen as well as America’s reputation more broadly and offered an intelligence bonanza to its enemies. The contempt by top officials for basic security precautions and a refusal to hold themselves to account for transgressions that could get a subordinate dismissed or even prosecuted can only compromise the integrity of government.
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