Last night, Republicans retained two House seats in Florida to grow their slim majority, and a Democratic-backed candidate won a Supreme Court race in Wisconsin. Catch up on the results here.
The stock market has seen the largest quarterly drop since 2022, partly due to uncertainties tied to Trump’s tariffs. S&P dropped 4.6 percent in the first quarter, and NASDAQ dropped about 10 percent.
Goldman Sachs said there’s a 35 percent chance the U.S. economy will enter a recession within 12 months, up from the previous 20 percent. Again, driven by tariffs.
Despite that, Trump remains committed to using tariffs to make the country self-sufficient with its supply chains, attract more investment, and create new jobs. He has dubbed today “Liberation Day,” when he will announce his sweeping reciprocal tariffs to level the trading field with 200 partners.
Experts say the journey to reciprocity will be bumpy but necessary because no partners will voluntarily give up their longstanding trade surpluses with the United States.
However, the United States will ultimately be better off, according to the experts. In the meantime, the administration will likely adjust its plan to a more refined tariff regime tailored to the modern trade world.
“In terms of whether they will eventually blunder their way into a more sophisticated, appropriate tariff, I would say the chances of that happening are probably two out of three,” economist Ian Fletcher told The Epoch Times. “But maybe [they] won’t. You never know with this guy.”
Frank Xie, a professor of business and marketing at the University of South Carolina–Aiken, is more confident about the outcome. He predicts an economic boom before the 2026 midterms, with early signs to appear in the next 12 to 18 months.
His confidence comes from the additional investments the White House pushes for, both tariff-related and non-tariff-related.
For example, in his view, the 25 percent tariffs announced on foreign-made vehicles and parts last week will generate enough pain—thus incentive—for auto parts manufacturing to move to the States.
The new auto tariffs are expected to generate an additional $100 billion in annual revenue and bring in $600 billion to $1 trillion in investments into the United States, according to the White House.
Xie said that early signs of the results of such investments could appear within 12 months. That could bring in new jobs and more income for American consumers, who, with the assistance of potential tax cuts, might find they can live with higher prices.
To Fletcher, the president has already been considering where to spend the new tariff revenue to alleviate consumers’ pain because he proposed an income tax deduction on loans for buying American-made cars.
Peter Navarro, a senior trade adviser to President Trump, told Fox News on Sunday that overall tariff revenue would reach more than $6 trillion over the next decade.
Tariffs are only one piece of Trump’s total economic strategy, Xie said, noting that the administration’s $500 billion investment in artificial intelligence (AI) also plays a key role in resetting global economic competition.
He believes AI development will cause a seismic shift in the labor force worldwide, and the technological leader will reap the most benefits.
High U.S. labor costs, the key factor driving multinational corporations to favor foreign over domestic investments, might become irrelevant when labor is much less significant in the production process.
Xie said the United States has a small window to act, given the high speed of the AI race and how quickly U.S. debt is mounting. The country is in a different position than in the 1970s, when the trade deficit first appeared.
The United States has gone through a “net transfer of wealth” to other countries via decades of trade deficits, according to former U.S. trade representative Ambassador Robert Lighthizer.
Last year, the U.S. trade deficit reached more than $1.2 trillion—the most ever in history. At the same time, Americans owe the rest of the world $26 trillion more than what they own in foreign countries, as indicated by the U.S. net investment position in data released last week by the U.S. Bureau of Economic Analysis. The 2024 number represents a 30 percent year-on-year drop.
Economists generally view debt as a tool for a country’s fiscal management; therefore, it is not seen as inherently bad. However, an increasingly high level of debt is concerning.
That’s what America is facing.
The country now uses one-fifth of its annual federal revenue to service interests on its debt, which reached a record level of $36 trillion last year.
The U.S. government doesn’t have an unlimited runway to borrow money, Xie said, so the administration needs to act fast.
Historian Victor Davis Hanson describes Trump’s theme as “mandated reciprocity.”
“The United States is not rich or powerful enough anymore to subsidize the economies and militaries of its friends, or to ignore and sluff off the aggression of its enemies,” the Hoover Institution fellow told The Epoch Times.
Regarding the effects of reciprocal tariffs, he said, “Neither our friends, the EU, nor our enemies, like China, will continue to pile up huge trade surpluses by the use of asymmetrical mercantile protectionism.”
—Terri Wu
HHS LAYOFFS
Federal health agencies have begun laying off staff, as recently foretold by Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr.
One person who has worked for the federal government for decades said she and co-workers regularly worked more than 10 hours a day and were surprised on the morning of April 1 to find they were unable to enter their workplace.
“That’s what hurts about all of this—that with all of that dedication, this is what we get in return,” she told The Epoch Times.
Another laid-off HHS employee, a young man, said that he was not sure if there would be any opportunities in Washington as he looks for his next job.
He said the layoffs were handled badly, with some workers initially unable to retrieve their personal belongings, and that the termination email he received contained what he described as inaccurate information about his job performance.
“This was an uneducated, unscientific process, where I think they were just trying to reach a number,” he said.
The workers spoke on condition of anonymity because they are still negotiating severance packages.
The department previously fired about 3,200 workers, but has been reinstating them under orders from a federal judge.
Kennedy announced on March 27 that the agency would fire about 10,000 workers, on top of those who have already retired early or accepted buyout offers.
He said he expected this would be “a painful period,” but hoped the department would emerge stronger and more efficient.
HHS includes the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention, and the National Institutes of Health (NIH).
Former FDA Commissioner Dr. Robert Califf thinks Kennedy is making a mistake with the cuts.
“The FDA as we’ve known it is finished, with most of the leaders with institutional knowledge and a deep understanding of product development and safety no longer employed,” he wrote on Linkedin.
Most of the 10,000 jobs cut—about 35 percent—will come from the FDA, with another 24 percent coming from the CDC.
Despite the tumult, new FDA Director Dr. Martin Makary is optimistic about his agency’s future, and is looking forward to tackling “the chronic disease epidemic that has reached a boiling point and threatens our quality, quantity, and way of life.”
—Zachary Stieber, Stacy Robinson
BOOKMARKS
Attorney General Pamela Bondi is seeking the death penalty against Luigi Mangione, the man accused of murdering UnitedHealthcare executive Brian Thompson. Bondi said the murder was “a premeditated, cold-blooded assassination.”
Finland’s government announced on Tuesday that it will withdraw from an anti-landmine alliance dating back to 1997. The move, coupled with a plan to increase defense spending, is motivated by the looming prospect of Russian military threats.
The U.S. government says an El Salvadoran man was deported in spite of a protection order by a federal judge due to an “administrative error.” The government says Kilmar Armando Abrego-Garcia, suspected of being a prominent member of the transnational gang MS-13, will not be recalled to the U.S. as he is now under the jurisdiction of a foreign sovereign nation.
Rep. Brittany Pettersen (D-Colo.) will get a House vote for her resolution that allows parents of newborns to vote by proxy, thanks to help from Rep. Anna Paulina Luna (R-Fla.) and eight other Republicans. Speaker Mike Johnson (R-La.) tried to procedurally block the resolution from coming to the floor because he feels proxy voting is “unconstitutional,” but was thwarted in a 206–222 vote.
Gen. John D. “Razin” Caine is the latest Trump nominee to run the Senate confirmation gauntlet, in his bid to be chairman of the Joint Chiefs of Staff. The Epoch Times’ Ryan Morgan hits the highlights from his April 1 hearing.
—Stacy Robinson
