Wall Street's relief rally didn't last long as investors took stock of the latest developments in President Trump's trade war. House Republicans approved a budget narrowly after some pushback from conservatives, and the US Supreme Court says the Trump administration must "facilitate" the return of a Maryland man who was mistakenly deported to El Salvador. Want more comprehensive analysis of the most important news of the day, plus a little fun? Subscribe to the Up First newsletter.Today's episode of Up First was by Rafael Nam, Kelsey Snell, Julia Redpath, Jan Johnson and Janaya Williams. It was produced by Ziad Buchh, Ben Abrams and Christopher Thomas. We get engineering support from Neisha Heinis. And our technical director is Carleigh Strange. Our Executive Producer is Jay Shaylor.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
Chapter 1: What are the key highlights of the latest trade developments?
Will the Fed step in to stabilize things with lower rates? I'm Steve Inskeep with Michelle Martin, and this is Up First from NPR News. A budget plan extending President Trump's tax cuts narrowly gained approval in the House.
That will allow us now to move forward to have our committees actually drafting the one big beautiful bill.
Even some Republicans worried that spending cuts targeting Medicaid could hurt working class Trump voters. So what is the Republican strategy?
And the Supreme Court says the Trump administration must return a Maryland man who was mistakenly deported to El Salvador. Stay with us. We've got the news you need to start your day.
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The latest season of The White Lotus served up a tropical buffet of sex, betrayal, violence, revenge, privilege, drugs, death, and, this was new, spirituality. But whose dead body was floating in the pond? We've seen the finale, and we've got thoughts on thoughts. Listen to the Pop Culture Happy Hour podcast from NPR.
One of President Trump's many changes to the tariff rates on Chinese goods underlined the power held by a single person.
This week, the president made up a new tax rate that Americans pay for Chinese imports. He made the announcement by composing a social media post with a couple of cabinet secretaries in the room. That was the process. One day later, the White House said the rate was actually different than announced, marking the sixth time the president has changed the China tariff in a matter of weeks.
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Chapter 2: How will the new budget plan affect Trump's tax cuts?
Chapter 3: What is the Supreme Court's latest ruling on deportation?
And the Supreme Court says the Trump administration must return a Maryland man who was mistakenly deported to El Salvador. Stay with us. We've got the news you need to start your day.
This message comes from 48 Hours. Want more 48 Hours? Four days a week, the 48 Hours podcast is bringing one of TV's most popular true crime series straight to your ears. Listen for original reporting and exclusive insights. Follow and listen wherever you get your podcasts.
Get all sorts of perks across more than 20 podcasts with the bundle option. Learn more at plus.npr.org.
The latest season of The White Lotus served up a tropical buffet of sex, betrayal, violence, revenge, privilege, drugs, death, and, this was new, spirituality. But whose dead body was floating in the pond? We've seen the finale, and we've got thoughts on thoughts. Listen to the Pop Culture Happy Hour podcast from NPR.
One of President Trump's many changes to the tariff rates on Chinese goods underlined the power held by a single person.
This week, the president made up a new tax rate that Americans pay for Chinese imports. He made the announcement by composing a social media post with a couple of cabinet secretaries in the room. That was the process. One day later, the White House said the rate was actually different than announced, marking the sixth time the president has changed the China tariff in a matter of weeks.
Last night, China struck back by raising their tariffs on U.S. imports to 125 percent. So what does all this mean for financial markets and the broader economy?
NPR's Scott Horsley has been watching all these ups and downs, and he is with us now. Good morning, Scott.
Good morning. More downs than ups lately.
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Chapter 4: How is the trade war influencing the U.S. economy?
Well, you sure got that right. So the stock market regained a lot of its earlier losses on Wednesday when Trump backtracked on some of its tariffs. But then the air went out of the balloon pretty fast. What happened?
Yeah, math happened. Analysts crunched the numbers yesterday and figured out that even with Wednesday's rollback, we're still looking at the highest import taxes in well over a century. There's now a 10% tax on everything the U.S. buys from most countries around the world. And the tax on imports from China is even higher than we thought, 145%.
Now, overnight, China punched back with its own triple-digit tariff on U.S. exports. And investors are worried this could really be a drag on economic growth. Speaking at the Economic Club of New York yesterday, Austin Goolsbee used a technical term to describe all this. He called it the freak-out channel. Goolsbee is president of the Federal Reserve Bank of Chicago.
The market is kind of like, ah! And the consumer's like, uh, and the Fed's job in that environment is to be the one to say, please remain seated with your seatbelt fastened until the pilot indicates it is time to move about the cabin.
President Trump's been lobbying the Fed to cut interest rates, but Goolsbee says the central bank's going to take its time. He notes that before this trade war took off last week, the U.S. was actually in solid economic shape with low unemployment and falling inflation.
Yeah, and there was some good news on inflation yesterday, but that was largely drowned out by the tariff talk. Would you say more about that?
Yeah, yesterday's report from the Labor Department showed inflation seemed to be coming under control last month. Prices in March were up only 2.4% from a year ago. Prices actually came down a little bit between February and March, thanks to a sharp drop in gas prices.
Now, I should note grocery prices, which are something that the president likes to talk a lot about, were up in March, and retail egg prices continue to climb. Egg farmers have gotten a little bit of a break in recent weeks from avian flu after a really tough winter season. But it's going to take months to rebuild the egg-laying flock.
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Chapter 5: What are the potential impacts of tariff changes on inflation?
And in the meantime, egg prices are up about 60% from a year ago with Easter just around the corner.
And there is concern that progress on inflation could be stalled by the trade war. Isn't that right?
Sure, especially with tariffs that could more than double the price on stuff we buy from China, like clothing and furniture and electronics and toys. Up until Wednesday, the president's tariff gun was sort of pointed in every direction. Now it is aimed more directly at China.
And that does mean there's more opportunity for importers to lower their tariff bill by shopping in countries other than China. But even if that happens, we're still looking at the highest tariffs since the Great Depression in the 1930s. And Austin Goolsbee says that could put the Fed in a tough spot as it tries to decide what to do with interest rates.
If you start to see a recession coming, you should lower the rates. If you see prices rising and the inflation rate going up, you should raise the rates. If there's a lot of uncertainty, you should wait and do nothing.
Right now, markets are betting the Fed will stick with that do-nothing approach and hold interest rates steady, at least for the next couple of months.
That is NPR's Scott Horsley. Scott, thank you.
You're welcome.
The Speaker of the House is starting his day on a win.
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Chapter 6: What are the details of the House-approved budget blueprint?
But most importantly, this budget extends the president's tax cuts. Those are going to expire at the end of 2025. That extension of those tax breaks is going to cost around $5.5 trillion over 10 years. Republicans are also planning to use this budget package to avoid a default on the nation's debt. They're going to raise the debt ceiling by about $5 trillion.
By doing it in this budget package, they don't have to negotiate any concessions with Democrats. They're using a process to get around a Democratic filibuster. Democrats have been blasting this package. They're saying it's going to add trillions to the deficit. Some were calling it yesterday a heist with tax breaks for the wealthy as programs for the working class are expected to be slashed.
So about this $1.5 trillion in cuts, there's already discussion about a big chunk of those cuts coming from Medicaid, which is the health care program for low-income people, elderly people, and disabled people.
Is that still the plan? There is no doubt Medicaid is going to be a big source of savings in this budget. You cannot cut $1.5 trillion from the federal budget without getting some from the biggest side of the federal ledger. That's mandatory spending on programs like Medicaid. The process Republicans are using walls off any changes to Social Security.
After the vote, the speaker was careful to say Medicaid beneficiaries aren't going to lose their coverage. He's arguing there's over $50 billion in waste, fraud, and abuse in the Medicaid program and other programs. The speaker emphasized they're going to make changes to Medicaid to add work requirements.
No one has talked about cutting one benefit in Medicaid to anyone who's duly owed. What we've talked about is returning work requirements. So, for example, you don't have able-bodied young men on a program that's designed for single mothers and the elderly and disabled.
Okay, so Republican leaders say they want to get the legislation with all the details to the president's desk by Memorial Day. Is that timeline doable?
This is going to be a huge lift for Republicans. And as you know, they have a really skinny majority in the House. Lawmakers in swing districts are really concerned about Medicaid. And conservatives want more than $1.5 trillion in cuts. They want closer to $2 trillion.
But even some Republicans, like Missouri Republican Josh Hawley, are warning they're not going to vote for Medicaid cuts, and many working-class Trump voters rely on these programs, and they would be the ones hurt. That is NPR's Deirdre Walsh. Deirdre, thank you. Thank you.
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