Trump Drops The Tariff Hammer

Good Monday morning. Punxsutawney Phil saw his shadow yesterday, so it will supposedly be six more weeks of winter. Have a great day!

In Today’s Brief

• Louisiana: Abortion case

• Somalia: Air strikes

• DNC: New chairman

• Costco: Strike averted

• Beyonce: Best Album

... and more

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Top Tips

1) Duties dustup

President Donald Trump followed through.

• The news: Trump hit Canada and Mexico with 25% tariffs on Saturday and placed 10% trade duties on China. The tariff on Canadian energy is only 10%. The president invoked the International Emergency Economic Powers Act, blaming the tariffs on the countries' shortcomings in helping the U.S. with illegal migration and the illicit drug trade, specifically fentanyl.

• The response: While Trump had threatened the tariffs for some time, there were always questions about whether he would levy them. Canada and Mexico reacted strongly, taking or threatening retaliatory measures that could spark an all-out trade war. China condemned the move but was a bit more measured. Trump conceded that tariffs could cause "pain" for Americans and raise prices in the short-term but said they were in the national interest and would make the country wealthy.

• The markets: Major indexes closed lower Friday in anticipation of the move. Market futures were down considerably overnight heading into the new week. The Wall Street Journal editorial board called Trump's decision "the dumbest trade war in history."

• Big picture: Trump is expected to speak with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau today. And the tariffs don't take effect until tomorrow, so there remains time for a grand deal. The president also indicated he plans to hit the European Union with tariffs soon but suggested the United Kingdom could avoid them. 

2) Another tragedy

Seven people died when a small airplane crashed in Philadelphia.

• The news: An air ambulance headed to Mexico via Missouri fell out of the sky seconds after taking off last Friday. All six people on board died, plus a person on the ground whose car was hit by debris. Twenty-two people were injured, including some critically, and the fiery crash caused significant damage to a busy city neighborhood.

• Next steps: The plane's black box has been recovered. Officials said the aircraft was highly fragmented due to the nature of the crash. A preliminary report on the incident is expected within 30 days, but the full probe could take months or years.

• On the heels: The Philly crash occurred just days after an American Airlines regional jet collided with an Army Blackhawk helicopter over Ronald Reagan National Airport, killing all 67 people involved. Investigators reportedly believe the chopper may have been too high prior to the crash; the House Republican who oversees the FAA said Trump's claims that diversity initiatives contributed to the crash are not true.

3) Influence campaign

Trump's tough talk about the Panama Canal may have already spurred change.

• The news: Secretary of State Marco Rubio met with Panamanian President Jose Raul Mulino yesterday. The message: Panama must end alleged Chinese influence over the Panama Canal, or it will face consequences.

• The rationale: Panama took control of the canal from the U.S. in 1999. Rubio told Mulino that Trump believes Panama is violating the treaty that memorialized the handoff by allowing Chinese interests to impact the waterway, which is supposed to remain neutral. Rubio said Trump could take action if Panama does not make immediate changes.

• That said ... Mulino told reporters Rubio was "respectful" and they had a positive dialogue. There was no threat of U.S. military action or an effort to reclaim control of the canal, two claims Trump has repeatedly made amid reported concerns Panamanian officials had about violence breaking out.

• Movement made: Mulino said Panama would not renew its agreement with China's Belt and Road infrastructure assistance initiative. The country will also reportedly investigate the Hong Kong-based company that controls ports at both ends of the canal. Trump has also taken issue with canal fees for U.S. ships, so the moves against China will not solve everything.

Quick Tips

U.S. News

• A Louisiana grand jury indicted a New York doctor for prescribing abortion drugs to a resident through telehealth services and violating the state's restrictive laws. The case is a direct challenge to the shield laws in New York and elsewhere that protect providers who treat out-of-state patients (More)

• A protest against President Trump's immigration policies blocked Los Angeles' 101 Freeway. City police said the demonstration was non-permitted; there were other road closures as a result of the protest (More)

• A North Carolina woman missing since late 2023 was found dead. A dive team discovered 33-year-old Dana Leigh Mustian's remains in Vance County; the investigation into her death and disappearance is still open (More)

World News

• The U.S. military carried out air strikes against ISIS in Somalia. Officials in the semi-autonomous Puntland region said "key figures" in the terrorist organization were killed; no civilian deaths were reported (More)

• France's government could collapse again. Prime Minister Francois Bayrou said he would force a budget through parliament without a vote, a move that will likely trigger a non-confidence vote (More)

• Sudanese rebels killed dozens at an open-air market. At least 54 people died after the Rapid Support Forces' attack in the city of Omdurman; at least 158 people were injured in the incident (More)

Political News

• Ken Martin was elected Democratic National Committee Chairman. The longtime leader of Minnesota's state party was considered the heavy front-runner to replace the exiting Jaime Harrison (More)

• Robert F. Kennedy Jr. pledged to divest his financial stake in an ongoing lawsuit against Merck if he is approved as Health and Human Services Secretary. The former presidential candidate is part of a filing regarding the Gardasil vaccine; he said any proceeds will now go to one of his sons (More)

• Elon Musk's Department of Government Efficiency received access to the Treasury Department's federal payments system. Top USAID officials are on leave after refusing to loop DOGE in on classified information; the Tesla billionaire has called the agency "a criminal organization" in response (More | More)

Business & Markets

• Major indexes closed lower on Friday. The Dow Jones fell over 300 points in anticipation of President Trump's tariff moves (Dow -0.75%, Nasdaq -0.28%, S&P 500 -0.50%).

• Costco and the Teamsters Union reached a tentative deal, avoiding a national strike of the wholesale chain's organized workers. Starbucks and Workers United will withdraw dueling lawsuits, a key step toward the coffee chain reaching union deals (More | More)

• An ex-Federal Reserve official is accused of spying for China. John Harold Rogers allegedly leaked economically valuable information to Beijing and was paid $450K while pretending to teach at a Chinese university (More)

Entertainment & Sports

• Beyonce won Album of the Year for Cowboy Carter to cap the 67th Grammy Awards, earning the honor for the first time. Kendrick Lamar's Not Like Us won both Song and Record of the Year (More)

• The Dallas Mavericks traded All-NBA star Luka Doncic to the Los Angeles Lakers. The move is being considered one of the most stunning transactions in league history; Doncic is only 25, but has battled injuries (More)

• Former Major League Baseball Commissioner Fay Vincent died at 96 after a battle with cancer. He helmed the sport from 1989-93 and oversaw the 1989 World Series delayed by a Bay Area earthquake and the addition of expansion clubs (More)

Quick Hitters

• Fun Stuff: Who doesn't love penguins? Here are some photos of the adorable creatures exploring and playing in their natural habitats.

• Take Note: Many popular idioms, such as "happy as a clam," sound nonsensical. But they actually make a lot of sense when you know their origins.

• Go Deep: The United Kingdom's National Health Service has approved a groundbreaking new treatment for sickle cell disease. Trials suggest the therapy can lead to a "functional cure" for close to 97% of patients.

• History Lesson: The battle for Irish independence briefly spilled over into New York City over 100 years ago. This is the little-known story of a Central Park shooting involving the Irish Republican Army in 1922.

• Life Hack: If your cup of tea is too bitter for your liking, do not add more sugar. Try sprinkling in a little salt instead.

Watch This

American cheese is not plastic. This guy confirmed it.

Links

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Looking Ahead …

The Supreme Court has agreed to decide whether Oklahoma can open a religious public charter school that receives state funding. The case could transform education law and the fault lines separating church and state.

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