Tariffs Hit At Midnight, Small Business Reactions, National Security Firings

0:01President Trump's tariffs on nearly all imported goods will go into effect at midnight. This is the reordering of global trade. Will the U.S. come out ahead or fall behind? I'm Leila Faudil, that's Michelle Martin, and this is Up First from NPR News.

0:20Small business owners are reacting to the magnitude of the White House's new tariffs. I had to come up with$15 ,000 of extra cash to release my goods just this last month. How are they thinking about their future? And several National Security Council staffers have been fired following a meeting between President Trump and far-right activist Laura Loomer. Always we let go of people, people that we don't like or people that we don't think do the job. Stay with us. We'll give you the news you need to start your day.

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1:39You can invest and trade on your own. Plus, get advice and more comprehensive wealth solutions to help meet your unique needs. With award-winning service, low costs, and transparent advice, you can manage your wealth your way at Schwab. Visit schwab.com to learn more. Support for NPR and the following message come from Washington Wise. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise. From Wall Street to Main Street, businesses are reeling from President Trump's expanded trade war.

2:20Steep new tariffs are set to take effect at midnight on nearly everything the U.S. imports, and even higher taxes are due to kick in next week. Big businesses are losing market value, and small businesses feel like they're caught in the middle of something they can't control. We're going to talk this through with two of NPR's business correspondents, Scott Horsley and Alina Seljuk. Welcome to you both. Hello, hello. Good morning. So, Scott, I'm going to start with you. Judging by the stock market's reaction, a lot of investors have been really rattled by these tariffs. But, you know, Trump had been talking about this for weeks.

2:52So why are they so spooked? Yeah, this was a seismic shakeup. The Dow Jones Industrial Average tumbled more than 1 ,600 points yesterday, or nearly 4%. The Nasdaq dropped nearly 6%. It was the biggest one-day sell-off in the stock market since early in the pandemic. President Trump has ordered a minimum 10 % tax on nearly everything the U.S. buys from other countries. He's also ordered much higher levies on things we buy from China, Japan, the European Union. Altogether, we are looking at about a nine-fold increase in tariffs now compared to what we were paying last year. And businesses are worried that it's going to cause higher prices for them.

3:32For weeks, investors have been waving the caution flag, stating they don't want a wider trade war. But Commerce Secretary Howard Lutnick told CNN the president's not about to change course. I don't think there's any chance that President Trump's going to back off his tariffs. This is the reordering of global trade. If these tariffs stick, it's going to upend the global trading system that the U.S. has spent decades building and leave this country more isolated from the rest of the world. Scott, how will these tariffs affect the economy more broadly? These tariffs are going to bring higher prices.

4:08They're also going to bring slower economic growth. And there could be some fallout in the job market. We're going to get the monthly jobs report later this morning. And that could also start to show the impact of the large-scale layoffs that Elon Musk team has been carrying out in the federal government. And remember, President Trump took over an economy that was in solid shape. Unemployment was low. GDP was growing at a respectable clip. Inflation was a little high, but it was much improved from a few years ago. And Trump made the decision to turn over the furniture and kick up a lot of dust.

4:42So where that dust settles now is going to be on him. It's the old pottery barn rule. If you break it, you own the results. And the president says he's also counting on these tariffs to raise a lot of money for the government, will they? These are high tariffs, and they could bring in a lot of money. That's one way the administration plans to make up for the money that the government stands to lose if it extends to 2017 tax cuts. But this is not a simple matter of taking money out of one pocket and putting it in the other. Tariffs will be paid disproportionately from the pockets of working people.

5:16That's who's shopping at Walmart and paying higher prices for imported toys and shoes and winter produce. Meanwhile, the savings from the tax cuts will primarily flow to the pockets of the wealthy. So this is a reverse Robin Hood policy, trading taxes for tariffs. It takes money from the poor and gives it to the rich. And how are other countries responding? Other countries will likely buy less from U.S. exporters, which will hurt farmers and factories here. What's more, a lot of countries that depend on exports to the United States will find it harder to sell their goods here. and they may be pushed towards recession.

5:53Trump has ordered tariffs that are not only higher but also broader than those we've seen before. He's planning to tax all kinds of things that we do not and cannot produce at scale here, like tropical fruit. You know, even with global warming, I don't think we're going to start growing a lot of bananas in the U.S. So we're going to import the bananas, but Americans are going to pay more for them and nervous shoppers have already started to dial back their spending. So we're going to turn to Alina Seljuk now. Alina, you've been talking to small retailers, are shopkeepers and suppliers from around the country.

6:20What have you heard so far? You know, they feel like collateral damage. The evening when the tariffs were announced, I was actually at a big reception organized by the National Retail Federation. They had scheduled a fly-in for small business owners. And when the magnitude of tariffs became clear, it was like shell shock because it's these companies that are on the hook to pay many of these fees. For example, Sarah Wells from Virginia shared her story. She sells purses and clothes for new moms. They're like for breast pumps and breastfeeding. They're made in China. And late last year, she made a huge shipment order.

6:56It was loading at the port when the White House raised tariffs on China by 10 percent in February. By the time it docked stateside, that tariff was raised again another 10 percent. And I had to come up with $15 ,000 of extra cash to release my goods just this last month. And now that the total tariff on Chinese imports is up to 54%. You know, Wells is reeling. What do people like her plan to do? You know, one common answer is retrenching and scaling back. Maybe your store shrinks the selection, so there's less stuff to ship. Maybe you stop hiring, stop advertising or developing new products, essentially stop growing and go into survival mode.

7:39One retailer talked about saving a lot of money in his bank account. It's money that he could be spending on all kinds of things to expand, hire, market. But now he wants that money to just kind of sit on the sidelines because he expects to pay big tariffs. And then the other answer is what Scott talked about. It's raising prices. Giant companies like Walmart are pressuring suppliers overseas to bear some of those tariff costs. Well, small retailers, they don't have that kind of muscle. And if they pass the cost to consumers with higher prices, you know, how high can they really go before they start losing sales?

8:18Sarah Wells had a grim take. Even if we pass some to the consumer, we can't pass at all. So I really think the honest answer is that businesses will close. And that's the worst case scenario that she thinks a lot of business owners will have to confront and will have to see. You know, Elena, one of President Trump's arguments for these tariffs is that they would bring manufacturing back to the U.S. What about these businesses? Can they find suppliers here? There was a lot of discussion about this at the event that I attended. There was actually this moment when a moderator asked a panel of small business owners, including Wells, to raise their hands if they tried to find domestic manufacturers first, and all the hands went up.

9:02But the reality is for so many things, you know, clothes, shoes, toys, electronics, the US has not manufactured them at scale in ages or ever. And so, you know, one shopkeeper says she sells work boots. She has American made boots. They are$400. Not everyone can afford that. So she also has imported ones that are half the price. Or I also talked to Danny Reynolds. He runs Stevenson's Clothing Boutique in Indiana. It sells also wedding gowns, and he says he supports the president's mission to level the trade playing field. He would love to have more U.S.-made gowns. They are great quality, but they're three times as expensive.

9:44And all the big bridal gown makers, they're overseas. There are only so many wedding gown manufacturers in this world, especially playing in our price range space. And as a smaller retailer, our hands are kind of tied in this regard. He says business people love to negotiate their deals, make their own decisions, and live and die by them. And the sweeping tariffs take that ability out of their control. That is NPRA business correspondents Alina Seljuk and Scott Horsley. Alina, thank you. Thank you. Scott, thank you. Good to be with you.

10:23The director of the National Security Agency and head of U.S. Cyber Command, General Timothy Hawk, has been fired. This, according to top Democrats on Congressional Intelligence Committees, Senator Mark Warner of Virginia and Congressman Jim Himes of Connecticut. The New York Times and The Washington Post are reporting that the firing is in connection to a meeting between President Trump and far-right activist Laura Loomer, during which she advocated for their dismissal. Now, I want to mention here that NPR has not independently verified this. A number of National Security Council staffers have also been fired, and President Trump is downplaying that move.

10:58Here he is talking on Air Force One last night. Always we let go of people, people that we don't like, or people that we don't think can do the job, Some are people that may have loyalties to somebody else. You'll always have them. Here with more on the NSC firings is NPR senior political editor and correspondent Domenico Montanaro. Hi, Domenico. Hey, good morning. Good morning. So what do we know about these firings? Well, Trump confirmed that there were firings at the NSC. For what, we don't know exactly. And the NSC said it wouldn't comment on personnel matters. But all this came after Trump met with Loomer.

11:33She's someone who was close to Trump during the 2024 campaign, which raised some eyebrows even among those on the right because she's someone who's peddled conspiracy theories or misinformation about everything from COVID to the 2017 mass shooting in Las Vegas and the attempted assassination of Trump. She's called herself pro-white nationalist and a white advocate, written racist things about Muslims and former Vice President Kamala Harris that I won't repeat, applauded the deaths of immigrants, and a whole lot of other stuff. Trump denied that Loomer was the reason for the firings. He said that she recommended additions.

12:06But Loomer herself posted on X, one of the many platforms that she'd been banned from before Elon Musk bought it, that she did report people to Trump who she sees as disloyal to him, not necessarily to the country or constitution. The NSA director and his deputy are among the people she called disloyal people, her evidence being that they were, she says, recommended by former chairman of the Joint Chiefs of Staff Mark Milley, who broke with Trump and called him a fascist. Okay, so what's going on here? What's this all about? Well, this is the kind of thing Loomer does. You know, she's very online, far-right activist, bills herself as a, quote, investigative journalist.

12:40But what that means is that she goes through people's social media history, their backgrounds, and connects dots that are often in conspiratorial ways and puts it all out there. In this case, Trump seemed to be taking Loomer's word over even his national security advisor, Mike Waltz. The New York Times reported that Waltz briefly defended his staff, but, quote, it was clear he had little, if any, power to protect their jobs. Remember, it was Waltz or someone on his staff who inadvertently added that reporter to Signal chat group in the first place. That's right. So what does this say about the people Trump is surrounding himself with and who has influence over him?

13:14Yeah, it's always a question with every president who they're listening to, who their advisors are. What this tells us is this is a very different group of people around Trump now than in his first term. Then there were more established, experienced people. But he really soured on those kinds of folks and moved more toward people in the right wing ecosphere of Trump acolytes and devotees that cropped up with him out of office. And the thing is, on any given day, you just don't know who's in Trump's ear or who he's seeking out, someone with more Washington experience or someone like Loomer. And that makes for a very chaotic and destabilizing White House.

13:45That's NPR's Domenico Montanaro. Thank you, Domenico. Thank you.

13:55The crackdown on immigrants in the U.S. without legal status has left many unsure what to do. This weekend on the Sunday story, how some immigrants are responding to the clear message that the Trump administration is sending. Leave now. If you don't, we will find you and we will deport you. You will never return. A look at the fear spreading in many immigrant communities. That's on the next Sunday story from Up First.

14:22And that's Up First for Friday, April 4th. I'm Michelle Martin. And I'm Leila Faudil. Just a reminder, Up First airs on Saturdays, too. Aisha Roscoe and Scott Simon will have the news. Look for it wherever you get your podcasts. Today's episode of Up First was edited by Pellavi Gogoi, Lisa Thompson, and Alice Wolfley. It was produced by Ziad Butch, Nia Dumas, and Christopher Thomas. We get engineering support from Damian Herring. Our technical director is Carly Strange. And our executive producer is Jay Shaler. We hope you'll join us again on Monday.

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