‘Eye-Watering’
“Eye-watering” is the description one Wall Street expert used to describe what’s about to land on the US economy: the most expansive trade restrictions in a century.
President Donald Trump is wagering that making coffee, clothes, smart phones, and other imports cost more in the US will provide an incentive to trading partners to buy more from and make more in America.
Beginning Saturday, goods exported to the US will be hit with reciprocal tariffs of at least 10%. That’s the low end.
At the high end, Lesotho and Madagascar — among the world’s poorest countries — were hit with a rate of 50% and 47% respectively. Chinese products are in line for an additional 34% on top of the 20% tariffs from earlier this year. Cambodia-made goods will be hit with a 49% tariff, and those from Vietnam, 46%. About half of all Nike shoes and 39% of Adidas shoes are made in Vietnam.
And the list goes on: Indonesia, 32%; India, 26%; and the European Union, 20%. Trump didn’t add extra levies on Canada and Mexico, which are already facing 25% tariffs tied to a demand to do more to thwart drug trafficking and illegal migration. Read More
That’s a lot of numbers to keep straight, so our colleagues built this tariff tracker.
Two things to watch: what happens to prices here — the US economics team at UBS is estimating that inflation could rise to close to 5% if tariffs are not reversed soon — and how other nations respond. China said it will retaliate, while Thailand talked about negotiating.
Sorry About Saturday, Senators
Senators may vote on confirming Mehmet Oz to run the Centers for Medicare and Medicaid Services today and take a procedural budget vote that would start the 50-hour clock for debate, followed by a “vote-a-rama” on budget amendments that could start late tomorrow and perhaps run into Saturday.
That budget measure, which was unveiled yesterday and has Trump’s endorsement, would allow the fast-tracking of $4 trillion in tax cut extensions on top of another $1.5 trillion in new tax cuts, while also extending the debt limit. Check out the details and get a fuller rundown from BGOV budget reporters Jack Fitzpatrick and Ken Tran in today’s Budget Brief.
Off the floor, it’s confirmation hearing day for Trump’s choice for government HR chief. Scott Kupor will field questions about leading the Office of Personnel Management, which holds the files on 2.3 million federal workers.
OPM has been at the center of Trump’s plans to shrink the federal workforce, so the hearing could offer a vision of how Kupor sees the agency functioning going forward.
Kupor is managing partner at the venture capital firm Andreesen Horowitz. Courtney Rozen notes that if confirmed, he’d join a growing group of Elon Musk-connected figures at the agency, including Airbnb co-founder Joe Gebbia, Tesla’s Riccardo Biasini, and xAI’s Amanda Scales.
And another Senate committee will be looking at multiple bipartisan bills aimed at lowering drug prices.
The Judiciary Committee is scheduled to vote on measures to boost oversight of pharmacy benefit managers, outlaw tactics that delay generic drug approvals, and more.
Christopher Yasiejko reports that one of the bills (S. 1040) would let the Federal Trade Commission treat product-hopping — in which a drugmaker patents slight changes to a treatment to extend exclusivity and block cheaper alternatives — as anticompetitive conduct. That bill’s backers include Sens. John Cornyn (R-Texas) and Richard Blumenthal (D-Conn.).
Another R-D pairing in the markup is a bill (S. 1096) backed by Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) to ban agreements in which brand-name drug companies pay the makers of generics to postpone launching lower-cost alternatives.
Check out Congress Tracker for the best of the rest today on Capitol Hill.
Remember Rod?
Congress. Governor. Prison inmate. Pardoned Felon. Celebrity Apprentice. Now, add foreign agent to the list of Rod Blagojevich’s many roles.
Kate Ackley reports that the former Democrat, former congressman, and former Illinois governor, freshly pardoned by Trump for a corruption conviction, is now registered to represent the Republic of Srpska.
He plans to build support for and highlight what he called a “witch hunt” of Milorad Dodik, the pro-Serbian president of the Republic of Srpska who’s now the target of an arrest warrant there, according to new filings with the Justice Department. Dodik, a Russian ally, recently fled to Moscow, news reports said. Read More
Fighting DOGE: It’s Complicated
Lawsuits to halt Elon Musk and DOGE from slashing the federal government are hitting legal roadblocks, so Robert Iafolla took an in-depth look at the litigation. What he discovered shows the limits of using courthouses to try to get in the way of an unprecedented bureaucratic wrecking ball while there’s time for it to matter. Read More
Before You Go
More big numbers to know about as the Washington day begins:
- GNC, which started as a small, family-owned health-food store in Pittsburgh in 1935 is now owned by the Chinese state-owned Harbin Pharmaceutical Group. A freshman congressman wants it ejected from US military bases, Roxana Tiron reports in a BGOV exclusive. That’s about 85 locations around the world. Read More
- There’s been another $100 million capitulation to Trump by another big law firm. Read More
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Editor’s Note: This newsletter has been updated to remove an incorrect graphic.
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