15 Posts

While it is still unclear if House Speaker Mike Johnson can muscle through the budget on the House floor after scrapping plans for a vote Wednesday night, the House does plan to go to the floor for a vote around 10:20 a.m. ET Thursday morning.

Conservatives and leadership worked late into the evening on a series of options to quell concerns the Senate bill did not cut spending enough, but it’s not clear what option Johnson will take.

The speaker will talk to reporters at 8:30 a.m. ET. CNN will advise.

The US stock market, fresh off its third-best day in modern history, is sinking back into reality. Although President Donald Trump paused most of his “reciprocal” tariffs, his other massive import taxes have already inflicted significant damage, and the economy won’t easily recover from the fallout.

The Dow, after rising nearly 3,000 points Wednesday, was set to open lower by more than 500 points, or 1.3%, Thursday. S&P 500 futures fell 1.7% and Nasdaq futures were 1.9% lower. The S&P 500 is coming off its best day since 2008, and the Nasdaq on Wednesday posted its second-best daily gains in history.

But even after Trump’s about-face, the reality remains stark: Economists said the economic damage is done, and many predict a US and global recession. Stocks are still well below where they were before Trump unveiled his “Liberation Day” tariffs last week, and those large stock market losses, existing tariffs and high degree of uncertainty about American trade policy are enough to sink the economy, they say.

Goldman Sachs said Wednesday after Trump’s partial detente that recession chances in the United States were still a coin flip. JPMorgan Wednesday evening, said the bank would not alter its recession forecasts, still seeing a 60% chance of a US and global recession even after Trump’s “positive” decision to unwind his “draconian” country-specific tariffs.

President Donald Trump on Wednesday said he is not waiting for China’s President Xi Jinping to blink in the US-China trade war, after Trump said he will pause tariff hikes for 90 days, but not for China.

Asked by CNN’s Alayna Treene if the president is waiting on Xi to blink, Trump quickly shook his head and said no.

“Look, for years we’ve been ripped off and taken advantage of by China and others, in all fairness, but there’s that’s the big one,” Trump said when pressed by Treene on what the end game is with China.

China says it remains willing to negotiate, even after Trump raised US tariffs on Chinese imports to 125%, as reported by CNN.

China says it will cut the number of American movies shown in the country as part of its retaliation against US President Donald Trump’s tariffs.

A spokesperson for the China Film Authority said Thursday that Washington’s tariffs on China “will inevitably reduce the appeal of American movies to the Chinese audience.”

“We will follow market rules, respect the audience’s choice, and appropriately reduce the number of imports of American movies,” the spokesman said in a statement.

“China is the world’s second largest film market. We have always adhered to a high level of opening up to the outside world and will introduce more excellent films from the world to meet market demand,” the statement added.

China already imposed retaliatory tariffs of 84% on US imports on Wednesday as it hit back against Trump’s escalation of the trade war. As part of the retaliation, China also imposed export controls on 12 American companies and added six more US firms to its “unreliable entity list.”

The curb on American movies is China’s first retaliatory move after Trump raised the levies on Chinese imports to 125% on Wednesday.

Foreign powers have reacted positively to US President Donald Trump’s move to pause tariffs on much of the world, but much uncertainty remains.

Here’s a roundup of some of the reaction:

France: The Trump administration’s decision to suspend tariffs for 90 days is “the start of the return of economic reason,” the governor of the Bank of France said. But he added “two bad ingredients in the American salad” remain: unpredictability and protectionism.

Germany: Germany’s chancellor-in-waiting Friedrich Merz said Wednesday that Trump’s decision to pause planned tariff increases for most countries was a testament to European Union unity. Asked about Trump’s reversal in an interview with German broadcaster RTL, Merz said the announcement was a “reaction to the determination of the Europeans.”

Poland: Donald Tusk, the Polish prime minister, welcomed Trump’s decision to pause tariffs on much of the world, posting on X that Europeans and Americans should “make the most” of the three-month period to maintain “close transatlantic relations.”

UK: Trump’s pause on tariffs “reinforces” the UK government’s “pragmatic” strategy, said Yvette Cooper, Home Secretary of the United Kingdom. Asked if the last 24 hours put her off relying on the US as trading partner, Cooper said the UK is taking a “steady course” to avoid getting “buffeted around from day to day or getting into the running commentaries and reactions.”

ASEAN: Members of the Southeast Asian trading block, which were due to be particularly hard-hit by tariffs, said they commit “to not impose any retaliatory measures,” according to a joint statement. ASEAN “stands ready” to work with the US to “find balanced, forward-looking solutions that support a more resilient and sustainable global economy,” they added.

The European Union has announced it is putting retaliatory measures against the United States on hold for 90 days.

“We want to give negotiations a chance,” EU Commission President Ursula von der Leyen wrote on X.

The EU on Wednesday backed its first countermeasures against steel and aluminum tariffs announced by Trump in March. Just after the EU agreed on its response, the US president announced the 90-day pause on the “reciprocal” tariffs he had placed on dozens of countries.

Von der Leyen added: “If negotiations are not satisfactory, our countermeasures will kick in.”

The bloc of 27 countries had been hit by three sets of US tariffs: 25% tariffs on steel and aluminum exports, 25% levies on car exports and 20% so-called reciprocal tariffs on all other goods.

Despite the pause on the “reciprocal” tariffs, Trump said the industry-specific ones would remain in place – as well as his 10% flat-rate minimum tariff on all nations.

Although Trump’s abrupt tariff reversal came as a relief to many in Europe, investors and analysts have warned that the unpredictable, stop-start nature of his trade policy will likely dampen investment and could slow global economic growth.

“Clear, predictable conditions are essential for trade and supply chains to function,” von der Leyen said in a separate statement Thursday.

While the EU “remains committed to constructive negotiations” with the US, the bloc is also focused on “diversifying its trade partnerships, engaging with countries that account for 87% of global trade,” von der Leyen said.

This post has been updated with additional information.

Russian-American woman Ksenia Karelina, who was serving a 12-year prison sentence for treason in Russia, has been released and is on her way to the United States, US Secretary of State Marco Rubio said on X on Thursday.

“American Ksenia Karelina is on a plane back home to the United States. She was wrongfully detained by Russia for over a year and President Trump secured her release,” Rubio said on X.

He added the president would “continue to work for the release of ALL Americans.”

Karelina’s release was part of a prisoner swap between the US and Russia that also released Russian-German Arthur Petrov who was in US prison, according two US officials familiar with the matter.

The prisoner swap took place in Abu Dhabi on Thursday and was conducted by CIA Director John Ratcliffe, the officials said.

The release comes as officials from Russia and the United States hold second-round talks in Istanbul, Turkey.

The US State Department said Tuesday that the talks would focus on embassy operations and that “no political or security issues” were on the agenda. “Ukraine is not, absolutely not, on the agenda,” State Department spokesperson Tammy Bruce said at that time.

CNN’s Gul Tuysuz and Kylie Atwood contributed reporting to this post.

China is digging in for a prolonged trade war with the US and it has “long been preparing for this,” said Keyu Jin, associate professor of economics at the London School of Economics.

“They are in a survival instinct right now,” Jin told CNN’s Polo Sandoval on Thursday.

US President Donald Trump has paused all “reciprocal” tariffs, apart from on major geopolitical rival China which announced its own retaliatory measures.

Beijing has “completely doubled down on more stimulus, more pivoting to new markets” and is making a “technological innovation push,” Jin said.

“Chinese companies have been set off on a globalization frenzy,” Jin added. “They’ve altered business models, opened new factories and opened new markets (at) a pace that would’ve been unseen before.

“China’s position – fight until the end if necessary – goes along with what was said that compromise is not an option because compromise will only lead to further demands from Trump.”

Billionaire investor Ray Dalio praised Donald Trump for “stepping back” from his plan to impose heavy tariffs on dozens of countries and hopes the US president does the same for China.

“This is a great time for all involved to reconsider their approaches!” Dalio posted on X late Wednesday, after Trump announced a 90-day pause on all “reciprocal” tariffs except those on China.

“There are better and worse ways of handling our problems with unsustainable debt and imbalances, and President Trump’s decision to step back from a worse way and negotiate how to deal with these imbalances is a much better way,” Dalio said, adding: “I hope… he will do the same with the Chinese.”

Dalio did not mention tariffs explicitly, but these “imbalances” refer to the trade deficits the US has with dozens of countries around the world, which Trump said repeatedly that his tariffs would aim to wipe out.

Scrapping tariffs on China will involve “negotiating a deal” that appreciates the renminbi, China’s currency, against the dollar, the investor said, which would be “achieved by the Chinese selling dollar assets while also easing their fiscal and monetary policies to stimulate their demand.”

This outcome would be a “win-win,” Dalio said.

The investor, who has long warned against the over-indebtedness of the world economy, said:

“One way or another, there will have to be major changes to the debt/monetary orders to deal with the debt, trade and capital imbalances problem.”

China says it remains willing to negotiate with the US after President Donald Trump raised his tariffs on Chinese imports to 125%.

“The door to talks is open, but dialogue must be conducted on the basis of mutual respect and equality,” a spokesperson for the Chinese Commerce Ministry said Thursday. “We hope the US will meet China halfway, and work toward resolving differences through dialogue and consultation.”

But the spokesperson also reiterated that China will not back down if Trump chooses to further escalate the trade war.

“If the US chooses confrontation, China will respond in kind. Pressure, threats, and blackmail are not the right ways to deal with China.”

The comments came hours after Beijing imposed retaliatory 84% tariffs on US imports to China.

The Chinese Foreign Ministry was asked by reporters on Thursday about Beijing’s response to Trump’s pausing of “reciprocal” tariffs on all countries with the exception of China.

Spokesperson Lin Jian sidestepped the question and instead called US tariffs “a blatant act that defies universal condemnation and goes against the entire world.”

But despite the government striking a consistently defiant tone, China’s export sector, a bright spot in an otherwise lackluster economy, is bracing for impact.

Investment bank Goldman Sachs anticipates the US tariffs will “significantly weigh” on the Chinese economy and labor market. It has downgraded its GDP growth forecasts for 2025 and 2026 to 4.0% and 3.5%, respectively, from previous projections of 4.5% and 4.0%.

US and Russian officials are holding talks at Russia’s consulate in Istanbul today, according to Turkish media.

The meeting is the second round of talks between Russia and the US in Turkey. The first round of talks took place at the US consulate in Istanbul on February 27 and lasted well over six hours.

The US State Department said Tuesday that the talks would focus on embassy operations and that “no political or security issues” were on the agenda. “Ukraine is not, absolutely not, on the agenda,” spokesperson Tammy Bruce said at that time.

The Russian state news agency Tass on Tuesday quoted the Kremlin as saying that the meeting would be “devoted to normalizing the work of the embassies.”

Previous reporting from Jennifer Hansler, Anna Chernova, Clare Sebastian and Lauren Kent

The bond market is showing signs of recovery following US President Donald Trump’s swift retreat from the hefty duties he had imposed on a swath of countries just hours earlier.

The 10-year Treasury yield, a benchmark for various debt, fell to 4.305% on Thursday from as high as 4.5% the previous day. Just a few days ago, it had traded below 4%. Bond yields trade in opposite directions to their prices.

Why this matters: Trump’s global tariff war had triggered a steep sell-off in the US Treasury market, alarming economists and even the president himself. CNN reported Wednesday that the bond sell-off had played a critical role in driving Trump’s decision to postpone his “reciprocal” tariffs.

Falling equity prices are typically accompanied by rising bond prices and decreasing bond yields. In times of market turbulence, investors tend to retreat to safe havens like US Treasury bonds, causing bond prices to go up.

But alarmingly, investors had been dumping stocks and bonds simultaneously, as CNN’s Allison Morrow writes, sending stock prices tumbling and bond yields rising. The two events happening together is very rare, with the most recent period being in 2020, during the Covid-19 pandemic.

US stocks skyrocketed after President Donald Trump announced a three-month pause on all the “reciprocal” tariffs, with the S&P 500 posting its best day since October 2008. It was also the third-best day for the benchmark index since its modern-day version was formed in 1957..

But enormous tariffs will remain on China, the world’s second-largest economy. Trump said they would be increased to 125% after Beijing announced further retaliatory tariffs against the US earlier Wednesday. Those duties on all US imports of 84% are now in effect.

All other countries that were subjected to reciprocal tariff rates would see rates go back down to the universal 10% rate, Trump said.

Here’s the latest on tariffs:

• Historic rallies: The about-turn triggered a massive rally on Wall Street, with the S&P 500 posting its best day since October 2008 on Wednesday. Asian and European markets also rebounded on Thursday.
• Neighbors spared: Mexico and Canada won’t face the 10% tariffs, a White House official told CNN. Almost every good coming from the two nations will be tariffed at 25% unless they are compliant with the US-Mexico-Canada Agreement. But that does not apply to sector-specific tariffs Trump has imposed.
• Why Trump backed down: Historically, treasuries rally in moments of stock market selloffs as investors shift assets to a safehaven. Alarm inside the Treasury Department over signs of distress in the US government bond market played a key role in Trump’s decision to pause “reciprocal” tariffs, according to three sources. Trump acknowledged he’d been watching the turmoil. “The bond market is very tricky,” he told reporters.
• Making deals: Treasury Secretary Scott Bessent said the pause would allow time to negotiate new trade agreements. Trump said he intends to make “fair deals for everybody,” including China, which he said wants to come to an agreement.
• Xi-Trump call expected: Commerce Secretary Howard Lutnick said today that he is not engaging with Chinese officials on tariffs, nor is Bessent. But Trump “expects to have conversations” with Chinese President Xi Jinping, he said.
• What experts are saying: Joe Brusuelas, the chief economist of consulting firm RSM US, warned the shift in tariff policy may not be enough to stave off a recession. In a note to clients yesterday afternoon, Goldman Sachs economists projected a 45% chance of a recession over the next 12 months.

European Commission President Ursula von der Leyen says she welcomes US President Donald Trump’s move to pause his “reciprocal” tariffs.

“It’s an important step towards stabilising the global economy,” she said Thursday. “Clear, predictable conditions are essential for trade and supply chains to function.”

“Tariffs are taxes that only hurt businesses and consumers. That’s why I’ve consistently advocated for a zero-for-zero tariff agreement between the European Union and the United States.”

Last week, Trump had announced 20% tariffs on imports from the European Union as part of his plan to levy “reciprocal” tariffs on dozens of countries. He paused those tariffs yesterday in a surprise reversal, with the exception of duties imposed on China.

European stock markets rallied after the tariff pause. Europe’s benchmark STOXX 600 index was 5.5% higher at the start of trading Thursday. France’s CAC index was up 2.9% and Germany’s DAX jumped 8.3%, while London’s FTSE 100 index rose 6.1%.

China’s yuan has fallen to its lowest level in nearly 18 years, in what some analysts say is a sign the central bank is further easing its grip on the currency to help offset the negative impact on exports from an escalating trade war.

On Thursday, the onshore renminbi dropped to as low as 7.351 per US dollar, the weakest since late 2007, before recovering some losses to 7.342, according to Reuters. The People’s Bank of China, which manages the yuan and sets its daily reference rate, weakened it to 7.209 yuan a dollar, it said.

A weaker yuan could alleviate some pressure on Chinese exporters by making their sales — a key economic driver for the country — cheaper as trade tensions between China and the US grow.

US Treasury Secretary Scott Bessent has warned China against using currency devaluation as a tool to counter Trump’s tariffs.

“If China starts devaluing, then that is a tax on the rest of the world, and everyone will have to keep raising their tariffs to offset the devaluation,” he said in an interview with Fox Business Network on Wednesday. “I would urge them not to do that and to come to the table.”

China’s offshore renminbi plunged to an all-time low of 7.429 per US dollar on Wednesday, a record since the offshore market was established in 2010, according to Reuters. It has since pared some of those losses.