Morning Report — Trump zigs and zags on tariffs

In today’s issue:  

• Trump revamps tariffs again
• VA downsizing sparks pushback
• House censures Democrat Green
• World leaders scramble for Ukraine peace

The future of President Trump’s tariffs plan is back up in the air.

The president on Thursday signed off on tariff exemptions for most imports from Canada and Mexico, pushing those levies to April 2. The move capped off a whiplash-inducing 48 hours after Trump’s 25 percent across-the-board tariffs went into effect Tuesday.

Trump has for weeks been playing a game of economic brinkmanship with Washington’s North American allies, threatening tariffs as he demands crackdowns on migration and fentanyl at the northern and southern borders. 

But each time the tariffs were slated to take effect, calls with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum kept the tariffs at bay — or provided exceptions for crucial cross-border industries, such as a one-month delay on tariffs for auto manufacturers.

The goods Trump exempted from the tariffs on Thursday are covered under a North American trade agreement that Trump signed in his first term in office.

▪ The New York Times: Trump’s tariffs on Mexico and Canada could push those allies into recession. The impact for America could be messy.

▪ Axios: Tariff threats are giving Canada’s Liberal Party — long lagging in the polls amid Trudeau’s unpopularity — a significant boost.

Even with the extension, the effects of the tariff threats are already being felt on both sides of the borders. Stock markets are tumbling, producers in affected industries face anxiety and confusion about their supply chains, and two of Washington’s closest allies are voicing their frustration with the about-face from the Oval Office. 

Trudeau said Thursday that despite the delay, Canada will be in a trade war with the U.S. for the foreseeable future. In response, Treasury Secretary Scott Bessent called him “a numbskull.”

In a speech at the Economic Club of New York, Bessent emphasized that the president views tariffs as a “negotiating tool,” and that short-term inflationary results of levies would even out in the long term.

“Access to cheap goods is not the essence of the American dream,” Bessent said. “The American dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security. For too long, the designers of multilateral trade deals have lost sight of this. International economic relations that do not work for the American people must be reexamined.”

▪ The Hill: Ontario will impose a 25 percent energy surcharge on the U.S. on Monday despite the 30-day pause on tariffs.

▪ CNN: “Personally, I think it’s stupid”: Businesses are struggling under Trump’s chaotic tariff back-and-forth.

Separately, Washington has levied 10 percent tariffs on Chinese goods. Unlike Ottawa and Mexico City, Beijing is standing tough, saying it’s prepared to fight “any type of war” with the U.S.

▪ The New York Times: China is vowing to counter U.S. tariffs.

▪ The Wall Street Journal: China is secretly worried Trump will win on trade.

The tariff back-and-forth coincides with a rising tide of economic angst ahead of today’s release of the first jobs report of Trump’s new administration. The Labor Department’s February report will provide the most comprehensive look yet into the job market during Trump’s second term. 

Most economists expect the U.S. to have added a respectable number of jobs with a slight increase in the unemployment rate, according to consensus estimates. But the looming blow from Trump’s new tariffs, the mass firings of federal workers, slumping consumer confidence and deep uncertainty among business leaders are raising red flags for the president.

“Today was the day the growth fear turned into a reality,” Callie Cox, chief market strategist at Ritholtz Wealth Management, said in a Thursday interview.

The White House is preparing an executive order that would shrink the Department of Education, taking steps toward a long-term conservative goal to eliminate the department altogether. A Wednesday draft of the executive order recognized that the president does not have the power to shutter the department, which would take an act of Congress and 60 “yes” votes in the Senate.

Trump was expected to sign the order Thursday, but it was pulled at the last minute. Even without the executive order, the department has already faced steep cuts as part of the White House’s efforts to shrink the federal government.

SMART TAKE with NewsNation’s BLAKE BURMAN:

A scalpel versus a hatchet. That is how President Trump is now saying his Cabinet secretaries, Elon Musk and the Department of Government Efficiency will approach spending cuts and layoffs.  

Let’s jump back into the time machine for a second, because we’ve heard that phrase before. Sort of. I’ll take you back to 2011, as then-President Obama frequently used a similar analogy to discuss pulling back on spending.

“It’s also why we have to use a scalpel and not a machete to reduce the deficit, so that we can keep making the investments that create jobs. But doing nothing on the deficit is just not an option,” Obama said in April 2011. 

What’s old is seemingly new again. Similar phrase but different players, at a different time in history.

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

3 THINGS TO KNOW TODAY

▪ Most of America “springs forward” Sunday for daylight saving time and losing an hour of sleep warrants some preparation, according to health experts. A third of Americans already get too little sleep (Morning Report journalists included), so here are some tips to get ready. 

▪ The State Department is launching an AI-fueled effort to cancel the visas of foreign nationals who appear to support Hamas or other designated terror groups.

▪ These mice are very “woolly” after being genetically modified by Colossal Biosciences, a private Dallas-based company behind efforts to resurrect the woolly mammoth and other extinct animals. 

LEADING THE DAY 

© The Associated Press | Ben Curtis

The Department of Government Efficiency (DOGE), and the Trump administration’s various firings, shuttered agencies and terminated spending under the supervision of billionaire Elon Musk, continue to be litigated in court.

On Thursday, a second federal judge indefinitely blocked Trump’s blanket freeze on federal grants and loans, saying the administration “put itself above Congress.” Led by New York, the lawsuit was brought by Democratic attorneys general in Washington, D.C., and 22 states, as well as Kentucky Gov. Andy Beshear (D).

▪ The Hill: U.S. District Judge Amir Ali on Thursday ordered the release by Monday of some foreign aid payments to contractors and nonprofits working with the U.S. Agency for International Development (USAID). The Supreme Court last week backed Ali’s enforcement order.

▪ NBC News: U.S. District Court Judge Beryl Howell on Thursday ordered the reinstatement of Gwynne Wilcox, the first Black woman to serve on the National Labor Relations Board, ruling Trump’s firing of Wilcox was a “blatant violation of law.” 

Rep. Rich McCormick (R-Ga.), speaking to CNN, is among a small band of lawmakers in Trump’s party who publicly suggested that DOGE’s goals may be laudatory, but its techniques sidestep Congress and contribute to public anxiety. Musk, he suggested, should “take a step back.” 

Trump told reporters Thursday he does not think Musk and DOGE are moving too quickly while federal workers are fired to promote efficiency. “No,” he said. “I think they’ve done an amazing job.” But the president interceded Thursday to tell his Cabinet members that they, and not Musk, call the shots when it comes to the fate of employees in their agencies and departments.

Amid court challenges, pushback on Capitol Hill and weeks of public protests and questions about the implications of the president’s downsizing project, Trump sent a message on social media about his Cabinet’s ability to accept or reject DOGE advice:  

“As the Secretaries learn about, and understand, the people working for the various Departments, they can be very precise as to who will remain, and who will go,” he wrote. “We say the ‘scalpel’ rather than the ‘hatchet.’ The combination of them, Elon, DOGE, and other great people will be able to do things at a historic level.”

▪ The New York Times: The State Department plans by this summer to close diplomatic missions and fire employees overseas, many of them local workers, as part of Trump’s “America first” and cost-savings goals. 

▪ Government Executive: Special Counsel Hampton Dellinger decided to drop his lawsuit seeking to reverse his firing from an office that protects federal employees and whistleblowers from prohibited personnel practices. A district judge this month blocked Dellinger’s termination by Trump’s team, but the U.S. Court of Appeals for the D.C. Circuit on Wednesday ruled that Dellinger could be removed while it considered the administration’s appeal. 

▪ The Hill: House Democrats worry about the resilience of U.S. power grids amid firings of federal specialists.

“WE REGRET”: Veterans Affairs (VA) Department Secretary Doug Collins in a video message defended planned cuts to “non-mission critical” spending with promises that benefits and health services would not be affected at the VA. “We regret anyone who loses their job,” he said this week in response to planned layoffs of roughly 15 percent of the current VA workforce.

Top Republicans and Democrats, alert to the nationwide reach of VA services and the political heft of veterans in election years, expressed concern about jettisoning 80,000 department workers, many of them veterans.

▪ PBS NewsHour: Veterans say they feel betrayed after being fired from federal jobs, including some who voted for Trump.

▪ CNN: Veterans are being hit hard by the administration’s firings.

A Pew Research Center survey released this week found that 55 percent of Americans express a great deal or fair amount of confidence in federal career civil servants, although partisan divisions are evident. The administration’s characterization of the federal bureaucracy as a “swamp” of corruption and redundancies may be influencing public thinking. Pew found that 56 percent of Americans said the government is “almost always wasteful and inefficient.”  

Musk, according to Pew’s poll, is viewed favorably by Republicans and largely unfavorably by Democrats. Overall, 54 percent of those surveyed view Trump’s influential adviser negatively.

WHERE AND WHEN

• The House will meet Monday at noon. The Senate will convene Monday at 3 p.m. 
• The president will sign executive orders in the Oval Office at 2:30 p.m. Trump will speak at a White House Digital Assets Summit at 3 p.m. in the State Dining Room. He will depart the White House at 5 p.m. and fly to Florida.
• Federal Reserve Chair Jerome Powell speaks about the economy at 12:30 p.m. during remarks at a forum hosted by the University of Chicago Booth School of Business in New York City.
• Economic indicator: The Labor Department at 8:30 a.m. will release the government’s jobs report for February. Here’s a preview. 

ZOOM IN

© The Associated Press | Win McNamee, Getty

“BREACH OF PROPER CONDUCT”: Rep. Al Green (D-Texas) says he’s unrepentant about interrupting Trump’s televised speech to a joint session of Congress on Tuesday to warn against proposed cuts to the Medicaid program.

The 77-year-old, who waved a cane and shouted over Trump minutes into the president’s speech, was ushered out of the House chamber on Tuesday night. On Thursday morning, his colleagues returned to the chamber to censure Green by a vote of 224-198-2. The resolution, backed by the GOP majority, punished Green’s “breach of proper conduct.” Ten moderate Democrats voted with Republicans to approve the official demerit.

Green, well known as a Trump critic, could face additional repercussions. The conservative House Freedom Caucus said it plans another resolution seeking to remove Green from the House Financial Services Committee. The group said on the social platform X it expects Speaker Mike Johnson (R-La.) to bring its resolution to the floor next week.

SHUTDOWN AVOIDANCE PLAN: The Speaker and the president back a short-term extension of government funding at current levels from midnight on March 14, when federal coffers could run dry, through Sept. 30, the end of the fiscal year. If House Republicans splinter into groups of dissenters, a government shutdown looms next week.

Trump turned to social media on Wednesday to urge support for a stopgap bill that conservatives view as running from (rather than resolving) a fiscal hurdle. “I am working with the GREAT House Republicans on a Continuing Resolution to fund the Government until September to give us some needed time to work on our Agenda,” Trump wrote. “Conservatives will love this Bill, because it sets us up to cut Taxes and Spending in Reconciliation, all while effectively FREEZING Spending this year.”

RX INTERMEDIARIES: Senate Democrats introduced legislation Thursday that includes changes to the health care industry’s rules about pharmacy benefit managers. The effort, led by Sen. Ron Wyden (D-Ore.) with other senators, seeks to revive bipartisan reforms and funding. 

NOMINATIONS: Lori Chavez-DeRemer’s nomination to lead the Labor Department advanced in the Senate with help from 15 Democrats Thursday in a procedural vote leading to a final confirmation vote next week. Martin Makary, Trump’s nominee to be Food and Drug Administration (FDA) commissioner, navigated pointed scrutiny Thursday during a Health, Education, Labor and Pensions Committee hearing.  Keith Sonderling, the president’s choice to be deputy secretary of Labor, cleared a committee confirmation vote along party lines in advance of consideration by the full Senate.

The Washington Post: Trump’s FDA nominee was grilled by senators about a vaccine meeting and agency staffing.

ELSEWHERE

© The Associated Press | Omar Havana 

UKRAINE: After a contentious Oval Office meeting, Ukrainian President Volodymyr Zelensky left Washington empty-handed, without signing a deal for U.S. rare mineral rights in Ukraine. In response, Trump halted intelligence sharing, and has repeatedly blamed Ukraine for Russia’s 2022 invasion while sending his envoys to talk peace with their Russian counterparts. Zelensky indicated he’s still open to signing the deal.

U.S. and Ukrainian officials will meet in Saudi Arabia next week to discuss the first steps of a peace deal.

Meanwhile, GOP lawmakers are urging Trump to resume intelligence sharing and military aid with Ukraine. While lawmakers say the president needs space to negotiate a peace deal with Russian President Vladimir Putin, they warn a long-term halt to military and intelligence assistance looks bad internationally and would undermine Ukraine in an unacceptable way. If the intelligence freeze is total and sustained, sources told CNN, it could deal a devastating blow to Kyiv’s ability to fight.

“It’s pretty bad,” one source familiar with the arrangement said. “Combined with the stopping of military assistance and foreign aid, it pretty much guarantees a Russian victory without there needing to be a peace deal.”

CNN: Keith Kellogg, Trump’s special envoy to Ukraine and Russia, said Thursday that Ukraine “brought [the cutoff] on themselves.”

▪ Politico: As Washington ramps up its pressure on Zelensky to step aside, his rivals are talking to Trump’s team.

▪ The Hill: Trump said Thursday he’s looking at whether to revoke temporary protected status for thousands of Ukrainians in the U.S.

European leaders are scrambling to draft their own version of a peace deal that would include Ukraine and ramp up military spending. On Wednesday, French President Emmanuel Macron spelled out how the continent’s security dynamic has changed. 

“I want to believe the U.S. will stay by our side. But we have to be ready if that isn’t the case,” Macron said in a televised address. “Europe’s future should not be decided in Washington or Moscow, and yes, the threat from the East is returning. The innocence of these 30 years since the fall of the Berlin Wall is over.”  

▪ The Hill: Trump raises doubts about NATO’s mutual defense pact.

▪ The New York Times: Vows by leaders to ramp up military spending have reshaped the fiscal picture that the European Central Bank must confront.

▪ The Atlantic: “What the hell is happening to your country?” American allies don’t trust Trump with the intelligence they share.

▪ BBC: Ukraine’s ambassador to the United Kingdom said the U.S. is “destroying” the established world order.

OPINION

■ Trump has sledgehammered Zelensky; it’s time to put it to Putin, by David Ingatius, columnist, The Washington Post.

■ The Kremlin keeps escalating: Russia responds to Trump by raising its ‘peace’ demands, by The Wall Street Journal editorial board.

■ Whole Hog Politics: Pretty good isn’t good enough for Dems with Jewish voters, by Chris Stirewalt, political editor, The Hill.  

THE CLOSER

© The Associated Press | NASA

And finally … 👏👏👏 Kudos to this week’s Morning Report Quiz winners! Our out-of-this-world readers knew about space-based environments ripped from the headlines.

🏆 Here are the savvy puzzlers who went 4/4 this week: Bart Schoenfeld, Gary Kalian, Chuck Schoenenberger, Harry Strulovici, Phil Kirstein, Joe Atchue, Mary Anne McEnery, Lynn Gardner, Richard Baznik, Tom Werkema, Stan Wasser, Carmine Petracca, James Morris, Sawyer Walters, Steve James, Laura Rettaliata, Jaina Mehta Buck, William Earl, Linda L. Field, Jenessa Wagner, Tim Zarpentine, Jess Elger, Andre Larroque, Pam Manges, Richard Schmidtke, Mark R. Williamson, Tim Burrack, Stewart Baker, John Trombetti, Savannah Petracca, Brian Hogan and Luther Berg. 

President Trump, during his speech to Congress this week, predicted the U.S. will one day “plant the American flag” on Mars.

Lander “Athena” was sent to the moon a week ago to hunt for water ice.  

Lander “Blue Ghost” is on the moon as of this writing sending photos back to Earth (among Morning Report’s list of task options).  

NASA’s Butch Wilmore, Suni Williams and Nick Hague, as well as cosmonaut Aleksandr Gorbunov, said Tuesday they expect to head home this month (at last) from the International Space Station. 

Stay Engaged 

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