Morning Report — Trump eases tariffs but escalates China fight

In today’s issue:  

• Trump pivots, markets surge, tariff jitters linger
• Speaker scraps budget plan vote
• US, China trade war derails TikTok sale
• Expectations low for US, Iran talks 

President Trump’s abrupt pause in tariffs with dozens of trading partners on Wednesday cheered investors but did little to ease an escalating trade war with China — along with plenty of economic uncertainty. 

“Nothing has changed dramatically,” Bloomberg News analyst Edward Harrison cautioned shortly after the president announced a 90-day pause in “reciprocal” tariffs on goods from countries willing to negotiate with the U.S. rather than retaliate. Trump unilaterally raised the tariff rate to 125 percent on Chinese goods. The U.S. tariff floor, set last week by the president, remains at 10 percent. 

A dramatic relief rally in financial markets is viewed as a reaction to Trump’s retreat. Investors blew past the continuing U.S. trade impasse with China, according to analysts who pointed to lingering economic question marks. The standoff with China will continue to impact U.S. importers.

KNOWN UNKNOWNS: “This just accentuates the policy uncertainty and sense of unreliability Trump is creating,’’ William Reinsch, a former U.S. trade official now at the Center for Strategic and International Studies, told The Associated Press. “Sure it’s good news, but how does anybody know that he won’t change his mind on Friday or next week? Countries are going to drift away from the U.S.”

The uncertain environment is on the minds of those at the central bank, Neel Kashkari, president of the Minneapolis Federal Reserve Bank, told CBS News. “There's a case to be made that if inflation takes off, we could need to go higher on interest rates. Of course, if the economy weakens dramatically from the uncertainty … that could bring interest rates down. But both of those things are possible at the same time, and that's what makes this such a complicated environment to navigate,” he said.

Beijing hiked retaliatory duties on U.S. imports to 84 percent from 34 percent Wednesday after the U.S. initially hit China on Tuesday with 104 percent tariffs. 

“BESPOKE” DEALS: Trump and his advisers said more than 75 countries are clamoring to negotiate with the U.S. to resolve trade strains, beginning with Japan, South Korea and Vietnam. 

The administration has not released a list of nations in line for talks. Italian Prime Minister Giorgia Meloni will meet with Trump on April 17 and the U.K. signaled a willingness to negotiate. Singapore, which was hit with the baseline 10 percent tariff, also said it wants to discuss alternatives with the U.S.

The president’s amended tariff policy changed nothing for Canada and Mexico.

Trump’s sudden pivot to a 90-day period for negotiations, which he suggested was in response to evident stress in the bond and financial markets, may offer some breathing room for talks that are now expected to stretch into the summer. Days ago, Trump said there would be no such interlude before “reciprocal” tariffs took effect. 

CHINA — which issued a U.S. travel advisory citing “deterioration of economic and trade relations” — has made no entreaties to Trump, although the president said Wednesday he would like to meet with Chinese President Xi Jinping. Instead, China reached out in Europe, seeking to bolster investment alliances. 

“We must solemnly tell the U.S.: A tariff-wielding barbarian who attempts to force countries to call and beg for mercy can never expect that call from China,” Huang Jingrui, spokesperson for China’s Foreign Ministry office in Hong Kong, wrote in a letter appearing in the South China Morning Post.

Treasury Secretary Scott Bessent has described Beijing’s tariff retaliation as a “mistake,” although some trade experts believe China, the world’s second-largest economy, is equipped to wait the U.S. out.

The secretary said Trump’s shift to a monthslong pause in tariffs to craft “bespoke” deals with trading nations “was his strategy all along.”

“You have to be flexible,” Trump told reporters Wednesday. “We don’t want to hurt countries that don’t need to be hurt. … It’s going to work out.” 

EUROPE: Meanwhile, European Union officials approved a fresh set of retaliatory duties on U.S. imports prior to Trump’s announced change, which he made on social media. The duties, scheduled to take effect April 15, would range between 10 percent and 25 percent on more than $24 billion worth of U.S. goods, including tobacco, motorcycles, poultry, steel and aluminum. 

Because the EU's approved tariffs have not taken effect, a reciprocal tariff rate of 20 percent assigned by the U.S. to EU member countries is now paused, according to a White House official. 

CAPITOL HILL: Republican lawmakers expressed relief Wednesday following Trump’s step back, reports The Hill’s Alexander Bolton. A GOP senator who requested anonymity said many Republican colleagues don’t favor the president’s tariff threats, although most do not share their misgivings publicly. “My impression from the senators I’ve had conversations with is, there’s a lot less support for tariffs … and a lot of concern about what the consequences are,” the senator said.

SMART TAKE with NewsNation’s BLAKE BURMAN:   

The Trump administration is taking a victory lap this week, as the Supreme Court handed it big wins. The administration can now move forward with firing thousands of probationary workers. The Department of Homeland Security can continue deporting immigrants without legal status who are believed to be part of the Tren de Aragua gang.  

But despite the celebration at the White House, many conservatives are outraged at conservative Supreme Court Justice Amy Coney Barrett. She sided with the opposition in the deportation case, and it’s not the first time the Trump-appointed justice has drawn the ire of conservatives for siding with the liberal justices on the high court. Why might that be the case? 

“She is making decisions, or at least deciding on decisions on procedural, technical grounds — not even the merits,” Jesse Weber, a NewsNation legal contributor, said. “This is not just her saying ‘oh she’s siding against Donald Trump’s agenda, she’s against executive authority,’ you can’t make a blanket statement like that.” 

As The Hill headline sums it up, two justices (Chief Justice John Roberts and Coney Barrett) could very well control the fate of the president at the Supreme Court.   

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

3 THINGS TO KNOW TODAY:

▪ Two near-simultaneous rulings on Wednesday further hamstrung the Trump administration’s efforts to deport alleged members of a Venezuelan gang, Tren de Aragua.

▪ Daylight savings time returns to legislative debate today on Capitol Hill.

▪ A group of House Democrats is launching a concerted campaign to force Elon Musk out of the Trump administration by May 30, Axios reports.

LEADING THE DAY

The Associated Press | J. Scott Applewhite

BUDGET FIGHT: House GOP leaders on Wednesday scrapped plans to vote on the Senate’s framework to advance key parts of Trump’s legislative agenda, a major setback that came in the face of opposition from hard-line conservatives. Speaker Mike Johnson (R-La.) said the chamber would “probably” vote on the measure today.

Johnson had maintained a bullish stance earlier this week despite conservative opposition to the bill, which Trump supports. But a number of lawmakers in the party’s right flank remained entrenched in opposition to the measure, unwilling to waver from that resistance despite intense pressure from Trump himself.

“We are working through some good ideas and solutions to get everybody there; it may not happen tonight but probably by tomorrow morning,” Johnson told reporters. “This is part of the process, this is a very constructive process, I’m very optimistic about the outcome of this one big, beautiful bill, and this is just one of the steps in getting there.”

▪ The Hill: Rep. Elise Stefanik (R-N.Y.) is getting a seat back at the House GOP leadership table as she returns to the lower chamber after Trump withdrew her nomination to be U.N. ambassador over concerns about the slim GOP majority.

▪ Politico: The House passed legislation that would limit the power of lower court judges to issue orders with broad national implications.

THE INTERVIEW: Former Vice President Mike Pence spoke with The Hill's Brett Samuels in an exclusive interview, leaning into his criticism of Trump's steep tariff policies while praising efforts to walk back stiff levies. Pence raised concerns about the implementation of a baseline 10 percent tariff on all nations, as well as sector-specific tariffs on cars and metals. The former vice president described the second Trump administration as “off to a good start,” but voiced reservations about what he called a “misstep” with the broad use of tariffs.

“I really believe that when people voted to send President Trump back to the White House, what I heard traveling across the country in the last four years was people wanted to see us get back to the policies of the Trump-Pence administration,” Pence said. 

“My sense is that, in addition to values — respect for the right to life, respect for traditional family values — I think that’s what people voted for. I don’t think, in my heart of hearts, I don’t think the American people were voting for what would amount to the largest peacetime tax hike in American history, which the tariffs that were announced last week, if left in place, would certainly be, and the hardship they’d place on working families and businesses large and small.”

Pence offered praise for national security adviser Mike Waltz, who has found himself under scrutiny after mistakenly adding a journalist to a Signal chat about an impending military strike.

Looking toward the future, the former vice president has been ostracized from Trump’s orbit since his decision to certify the 2020 election results on Jan. 6, 2021. Where does that leave him and his advocacy group in today’s Trump-driven Republican Party?

“What we see as our role is to be an anchor to windward, to essentially remind the party by calling balls and strikes on issues of our roots in the conservative movement,” Pence said.

▪ The Hill: White House adviser on China, Peter Navarro, rubs some Trump allies the wrong way amid a trade battle.

▪ The Hill: Inside a conservative ecosystem built on free-market fundamentalism and a reflexive aversion to tax increases, some who embrace Trump have found themselves in a delicate position during the early months of a roller coaster administration. 

WHERE AND WHEN

• The House will meet at 9 a.m. Reps. Mike Lawler (R-N.Y.), Ryan Mackenzie (R-Pa.), Jahana Hayes (D-Conn.) and Derek Tran (D-Calif.) will appear at 9 p.m. ET during a live CNN town hall event.
  
• The Senate will convene at 10 a.m.
  
• The president will receive his Intelligence briefing at 10 a.m. Trump will convene a meeting of his Cabinet at 11 a.m. He will participate in a swearing-in ceremony for U.S. Solicitor General D. John Sauer at 12:30 p.m. Trump will sign legislation at 4 p.m. in the Oval Office.

ZOOM IN

The Associated Press | Ashley Landis

TIKTOK: Trump’s new tariffs on China have thrown a wrench into efforts to negotiate a deal over TikTok’s divestment from its Chinese-owned parent company ByteDance, as Washington and Beijing sink deeper into a trade war. After finalizing a deal on TikTok last week, Trump’s tariffs upended negotiations and torpedoed the deal. As Trump goes tit-for-tat on tariffs with China, he may be handing Beijing greater bargaining power over TikTok, experts told The Hill’s Julia Shapero. 

“This national security imperative to divest from ByteDance is now giving China leverage at the same time that Trump is trying to put the screws to them with tariffs,” said Sarah Kreps, director of Cornell University's Tech Policy Institute. 

POLITICS: Former New Hampshire Gov. Chris Sununu’s (R) decision not to run for Senate is presenting a challenge for Republicans in 2026. Sununu notably passed on a Senate bid ahead of the 2022 midterms, opting to run for a fourth term as governor instead. However, New Hampshire Republicans say a Sununu Senate run, which was backed by Trump, would have been a cakewalk. Hypothetical polls showed Sununu trouncing Democratic Senate candidate Rep. Chris Pappas (D-N.H.). The decision leaves Republicans with the potentially tricky task of having to recruit a candidate who can win in a state that still has a blue lean. 

“It’s going to mean that we’re actually going to have to work for it,” said New Hampshire state House Majority Leader Jason Osborne (R). “I think he would have been a shoo-in.”  

The Hill: Here is what to know about the Trump administration’s escalation with international students over immigration enforcement. 

“FOREVER CHEMICALS”: In their new book, “Poisoning the Well: How Forever Chemicals Contaminated America,” out today, The Hill’s Sharon Udasin and Rachel Frazin detail how a set of toxic compounds have devastated entire communities across the country. PFCs, which today are known as PFAS, are a family of synthetic chemicals that have been used in a wide variety of household products from nonstick pans to waterproof clothing and cosmetics to fast food wrappers. These substances have also been linked to various cancers, kidney, liver and thyroid problems and immune system and fertility issues. 

HEALTH: While the Trump administration takes steps to discourage incorporating fluoride — which strengthens teeth — in drinking water, experts warn this may have consequences for Americans’ health. Scott Tomar, spokesperson at the American Dental Association and professor at the College of Dentistry at the University of Illinois Chicago, noted that dental health can be important not just for your teeth — but for your overall health.  

“The mouth, the teeth, have a substantial impact on pretty much every aspect of people’s lives — certainly their health,” he said. “An infection of your tooth becomes an infection of the surrounding area and often spreads to other parts of the body.”

▪ Politico: Health and Human Services Secretary Robert F. Kennedy Jr.'s drastic overhaul has reshaped the U.S. health apparatus in a matter of weeks.

▪ The Hill: In an interview with CBS News, Kennedy said he was unaware that his agency is trying to rescind more than $11 billion from state and local health departments. 

ELSEWHERE

The Associated Press | Iranian Presidency Office 

IRAN: Trump is embarking on a high-stakes mission to get Iran to give up its nuclear weapons ambitions but is sending mixed signals about his main goals. While threatening military action if Iran refuses to engage, it’s unclear if the president is looking to limit Iran’s nuclear capabilities or demand the full destruction of its facilities. 

The uncertainty has put daylight between the White House and Israel on the way forward, and there are mixed reactions among Republicans and Democrats on Capitol Hill. Steve Witkoff, Trump’s special envoy for the Middle East and point person on talks with Russia over its war in Ukraine, is now taking on the Iranian file. In an interview with Tucker Carlson late last month, Witkoff called for a “verification program, so that nobody worries about weaponization” of nuclear material. 

Sen. Tommy Tuberville (R-Ala.), chair of the Senate Armed Services subcommittee on personnel, said a verification program would be “hard to do,” and wants a deal dismantling all of Iran’s nuclear program. “But I’m all for it if we can verify it.” 

▪ The New York Times: Trump wants an Iran nuclear deal, but it must be better than former President Obama’s.

▪ NBC News: In a break from the U.S., British Prime Minister Keir Starmer calls for a probe into Israel's killing of emergency workers in Gaza.

▪ The Washington Post: The United Nations says Israel’s aid blockade has opened the “floodgates of horror” in Gaza.

UKRAINE: More than 150 Chinese citizens have joined the Russian military to fight against Ukraine, The Wall Street Journal reports, indicating a deeper Chinese involvement in the war than previously known. Beijing has vehemently denied the claims. The White House on Wednesday threatened to take steps against China if it allows its citizens to join the Russian military.

The Washington Post: An American citizen jailed in Russia, Ksenia Karelina, is returning home to the United States.

OPINION

■ Trump blinked. Danger remains, by The Washington Post editorial board.

■ The promise of Trump’s Iran talks gambit, by Noah Rothman, National Review.

THE CLOSER

The Associated Press | Ben Margot

Take Our Morning Report Quiz

And finally … ???? It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by three unusual wolf pups, we’re eager for some smart guesses about gene editing in animals.

Be sure to email your responses to asimendinger@thehill.com and kkarisch@thehill.com — please add “Quiz” to your subject line. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

In 1996, Dolly made history as the first animal fully cloned from an adult cell. What species was she?

1. Dog 
2. Sheep 
3. Goat 
4. Pig 

Colossal Bioscience, the company that recently unveiled three genetically altered wolf puppies with prehistoric ancestors, aspires to revive which other animals?

1. Mammoths 
2. Dodos 
3. Tasmanian tigers 
4. All of the above 

In an example of pint-sized gene editing, scientists were able to inject woolly mammoth DNA into what animal?

1. Rats 
2. Mice 
3. Hamsters 
4. Ferrets 

Some pet owners pay companies five-figure fees to clone their furry friends.

1. True
2. False 

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