Tariff Fears, Trump Budget Plan Passes House, Deportation Ruling

0:02Here are some vocabulary words to help describe this week. The market is kind of like, ah! And the consumer is like, ah! 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.

0:46Stay with us. We've got the news you need to start your day.

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2:17Rinse. It's time to be great. 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.

2:49imports to 125 percent. So what does all this mean for financial markets and the broader economy? NPR, 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. 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.

3:23There'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 in New York yesterday, Austin Goolsbee used a technical term to describe all this. He called it the freakout channel. Goolsbee is president of the Federal Reserve Bank of Chicago. The market is kind of like, ah, and the consumer is like, ah, 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 cabinet.

4:08President 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 percent from a year ago. Prices actually came down a little bit between February and March, thanks to a sharp drop in gas prices.

4:43Now, 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, but it's going to take months to rebuild the egg-laying flock. 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.

5:21Up 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.

5:55If 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.

6:16The Speaker of the House is starting his day on a win. Republicans narrowly gained approval of their budget blueprint, which makes room for renewing President Trump's tax cuts as well as his border security policies. This plan also includes trillions of dollars in federal borrowing to finance those tax cuts and other things. Fiscal conservatives resisted that part but got a promise from party leaders to deliver spending cuts later. Speaker Mike Johnson says the real work begins now. That was a big step because that will allow us now to move forward to have our committees actually drafting the one big beautiful bill.

6:52And our congressional correspondent Deirdre Walsh is with us now. Good morning, Deirdre. Good morning, Michelle. So as I understand it, House Speaker Mike Johnson didn't have the votes on Wednesday but got it through yesterday. So what happened? How do you manage it? Well, he and Senate Majority Leader John Thune met separately with a group of about 20 conservatives who were adamant that the budget package had to include a minimum amount of spending cuts. They're talking$1.5 trillion. There's a range in this resolution, but these hardliners weren't convinced the Senate would actually meet the higher number, and now they say they are.

7:24So what's in this blueprint? It's really a big package that wraps the president's legislative agenda into one set of instructions for committees to follow. The resolution says the House and Senate agrees on these goals. Now they have to work out all the details. They've agreed they want more money for border security, domestic energy production. 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.

8:01They'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.

8:38Is 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.

9:14No 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.

9:45And 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.

10:10The Supreme Court says the Trump administration must, quote, facilitate the return of a Maryland man who was mistakenly deported to El Salvador. The high court mostly sided with a lower court judge despite an emergency appeal from the Trump administration. The justices sent the case back for clarification to that judge on just what the court can tell the president to do. And Paris Joel Rose covers immigration and he's with us now. Good morning, Joel. Good morning, Michelle. So if you would just remind us who the man is at the center of this case. His name is Kilmar Abrego Garcia. He had been living in Maryland for over a decade.

10:45He had a form of protected status that should have prevented his deportation to El Salvador. In spite of that, ICE officers arrested Abrego Garcia last month and deported him to El Salvador, along with hundreds of other men the Trump administration also accuses of being gang members. Abrego Garcia denies that. The government says he was deported to El Salvador because of an administrative error, but argued there is nothing it can do now because Abrego Garcia was already out of the U.S. A federal district judge rejected that argument. She ordered that he be brought back to Maryland quickly. But Chief Justice John Roberts put that order on hold while the Supreme Court could consider the case.

11:21And what exactly did the Supreme Court decide last night? The court issued a brief unsigned order. It's interesting to note that there were no dissents, although there was a statement from Justice Sonia Sotomayor joined by the court's other two liberals, calling this an egregious violation of Abrego Garcia's rights. The court said that the government must now facilitate Abrego Garcia's release from custody in El Salvador and handle his case as it would have been handled if he had not been improperly sent there. That part is a win for Abrego Garcia, but the justices also had some instructions for the district court judge.

11:52They told her to clarify the meaning of the word effectuate when she ordered the Trump administration to effectuate Abrego Garcia's return. The justices said the scope of that term is unclear and that it might exceed the lower court's authority when it comes to foreign policy. So when do we expect that judge to act? She already has. Late last night, Judge Paula Zinies issued a new revised order clarifying that the government needs to take, quote, all steps to facilitate the return of Abrego Garcia, unquote, to the U.S. as soon as possible. Zinies wants to know his current physical location and status, what steps the government has taken to bring him back, and what additional steps they are considering.

12:29And she's called a hearing for later today in Maryland. So Judge Zinies is not wasting any time. Has the White House said anything about this? Have they had any comment? White House Deputy Chief of Staff Stephen Miller did post about the case on social media last night. He framed this as a rejection of the judge's order because the Supreme Court said that lower courts cannot dictate foreign policy. Miller claimed that it is El Salvador that is holding Abrego Garcia, not the U.S. government. So at this moment, it is not clear exactly when or if Abrego Garcia will be coming back to the U.S. Before we let you go, there's another closely watched immigration case that's back in court today in Louisiana.

13:06So what can you tell us about that? Yeah, this is the case of Mahmoud Khalil, the Columbia graduate student and lawful permanent resident who was arrested and detained by ICE last month because of his pro-Palestinian activism. Here, the Trump administration has argued that Khalil has engaged in, quote, anti-Semitic and destructive protests. And for that, he should be stripped of his green card and deported. His lawyer says that's a violation of the First Amendment. And the immigration judge says she'll decide today whether there's enough evidence to deport him or not. That is NPR's Joel Rose. Joel, thank you.

13:36You're welcome.

13:44The First Amendment is a cornerstone of American democracy. This week, our co-host, Leila Faddle, wanted to know how the right to free speech might be changing for different people under the Trump administration. Conservatives are just, in general, much more willing to speak their mind. They just sort of shut down the conversation by saying, I'm putting you on a list. This Sunday on Up First, who feels emboldened and who feels silenced? Listen to the Sunday story here on NPR's Up First podcast.

14:15And that's Up First for Friday, April 11th. I'm Michelle Martin. And I'm Steve Inskeep. Remember, Up First comes your way on Saturdays too. Aisha Roscoe and Scott Simon have the news, and you can find it wherever you get your podcasts. Today's episode of Up First was edited by Raphael Nam, Kelsey Snell, Julia Radpath, Jan Johnson, and Jenea Williams. It was produced by Ziad Bunch, Ben Abrams, and Christopher Thomas. We get engineering support from Nisha Hines, and our technical director is Carly Strange. Our executive producer is Jay Shaler. We hope you'll join us again.

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