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| | Wall Street and Corporate America have finally started to absorb that President Donald Trump is deadly serious about using tariffs to flex on foreign policy and reorient domestic manufacturing. Understanding Trump’s resolve is one thing, grasping how and when those policies will make an actual dent in the global economy is another matter entirely. The White House delivered another stunning announcement on Wednesday when Press Secretary Karoline Leavitt told reporters that domestic auto manufacturers would be temporarily exempt from the 25 percent tariffs Trump imposed on Canadian and Mexican imports. But the White House also made it clear that the one-month reprieve granted to any autos produced through the U.S.-Mexico-Canada Agreement should not be construed as the end of Trump’s trade war with America’s two largest trading partners. And, per Doug Palmer and Ari Hawkins, Leavitt stressed that Trump still plans to move ahead with “reciprocal tariffs” on April 2. And that’s where things get a lot more challenging for businesses. “The uncertainty around what’s going to happen with tariffs is making [businesses] a lot more cautious,” Larry Adam, chief investment officer of the private client group at Raymond James, told MM. “Consumers are still spending, businesses are still spending, but it’s unclear if they're going to continue at that pace.” As your host reports in a story out this morning: “Trump’s whipsaw approach to trade policy — which has included sweeping proclamations about universal tariffs followed by delays, exemptions and reversals — has undercut businesses’ ability to plan ahead during the early days of his administration. And while he has sworn to pursue an agenda that would empower private businesses, the uncertainty generated by his myriad tariff announcements could jeopardize investment that will help the economy expand.” Put another way: “The administration wants higher growth because animal spirits are unleashed,” Rebecca Patterson, a senior fellow at the Council on Foreign Relations and former chief investment strategist at the hedge fund Bridgewater Associates, told your MM host. “But how do you get more animal spirits — more mergers and IPOs — if there’s uncertainty around market and economic conditions? That seems contradictory.” IT’S THURSDAY — I took five days off and missed 13 news cycles, by the looks of it. A huge thank you to my colleagues for handling Morning Money while I was grilling steaks and mixing cocktails for my in-laws in Florida. Send econ policy thoughts, Wall Street tips, personnel moves or general thoughts to me at ssutton@politico.com.
| | Acting SEC Chair Mark Uyeda speaks at WSJ CFO event at 9:40 a.m. … The Senate Finance Committee holds a confirmation hearing for Deputy Treasury Secretary nominee Michael Faulkender at 10 a.m. … At 11 a.m., Senate Banking will vote on the nominations of Jonathan McKernan to be CFPB director, Stephen Miran to be chair of the Council of Economic Advisers, Jeffrey Kessler to be Commerce undersecretary for industry and security and William Pulte to be director of the Federal Housing Finance Agency … Treasury Secretary Scott Bessent will speak at the Economic Club of New York at noon … Fed Gov. Christopher Waller speaks at WSJ CFO event on the economic outlook at 3:30 p.m. … More on tariffs — As Megan Messerly, Daniel Desrochers and Ari Hawkins report, Trump’s reprieve for the auto sector “reflect[s] the president’s dual impulses: longstanding sensitivity to stock market fluctuations — which he has long read as Nielsen ratings for his performance — and a love of tariffs as a primary instrument to get what he wants from foreign governments.” — The WSJ’s Chip Cutter, Sarah Nassauer and Roshan Fernandez: “Trump’s Tariff War Puts CEOs on the Front Lines” Crypto’s internecine battles — The crypto industry scored big in the 2024 election. In 2025, myriad battles between industry heavyweights could run the risk of derailing crypto-friendly legislation, Victoria Guida reports in her latest column. Chaos at the CFPB — Hundreds of emails unearthed in federal court detail how Acting Consumer Financial Protection Bureau Director Russ Vought’s stop-work order ignited chaos as employees scrambled to accommodate an order that “in many ways conflicted with officials’ legally required responsibilities,” Kyle Cheney and Katy O’Donnell report. — Katy also has a story on the Senate’s 51-47 vote to overturn a rule spearheaded by former CFPB Director Rohit Chopra that subjected nonbanks with digital payment platforms to greater scrutiny. Sen. Elizabeth Warren (D-Mass.) compared the resolution to a “get-out-of-jail-free card” for Elon Musk, whose social media website X has partnered with Visa to enable electronic payments. — Meanwhile, House Financial Services voted for a resolution that would overturn a Biden-era CFPB rule restricting overdraft fees, Jasper Goodman reports. Money (still) gone — A federal judge declined to grant New York City’s request to force the Trump administration to return an $80 million federal grant that had been clawed back from the city’s coffers, Eric Coltin reports. Comptroller Brad Lander — who had pushed the embattled Adams administration to sue — “didn’t see it as a major blow to the city’s case.”
| | Deal or no deal — Jennifer Scholtes, Mia McCarthy and Meredith Lee Hill report that Congress’s top appropriators are close to a deal that would avert a government shutdown scheduled to begin on March 14. Current policy — Senate Majority Leader John Thune told Jordain Carney that GOP lawmakers still haven’t decided whether they’ll use a current policy baseline to extend Trump’s tax cuts permanently. Graham presses — Also from Jennifer: “Senate Budget Chair Lindsey Graham asked Trump’s latest budget nominee on Wednesday to help dislodge funding now frozen for widely supported programs, warning that the trust of the American people is at stake.” — Republican senators are calling on Musk to work with them on legislation that would enshrine some of the spending cuts he’s overseen at DOGE, per Jordain Carney and Lisa Kashinsky. “We need to capture this in the legislative process to make it real,” said Graham (R-S.C.). “It’s time for the White House now to go on offense. We’re losing altitude here. We started off good. We’re losing altitude. We need to get back on the game, on offense.”
| | First in MM: Warren, Wyden slam reported IRS cuts — Amid reports that Trump plans to slash the IRS’s workforce by half, Warren — along with Senate Finance’s ranking Democrat Sen. Ron Wyden of Oregon, Senate Minority Leader Chuck Schumer of New York and 15 other Senate Democrats — pressed the Treasury’s acting Inspector General for Tax Administration Heather Hill to evaluate how the proposed cuts to the IRS’s workforce could hamper enforcement and collection efforts and weaken taxpayer services. “Reducing IRS staff will have profound effects, hindering the agency’s ability to process the more than 140 million individual tax returns it expects to receive for tax year 2024, potentially causing delays for taxpayers waiting for refunds, and inhibiting the agency’s ability to conduct audits to catch wealthy tax cheats who avoid paying their fair share and to pursue stricter enforcement of rules governing businesses,” they wrote in a letter to Hill that was shared with MM. Hill’s office did not immediately respond to a request for comment. Democrats push back on HUD cuts — House Democrats warned Secretary Scott Turner to avoid cuts to public housing as the administration chops away at HUD programs and staff, Katy O’Donnell reports. To the states — Nevada's top gambling regulator called on financial exchange startup Kalshi to halt trading on sporting events and elections within the state, Declan Harty reports. The board said Kalshi’s sports and election marketplaces violate state law. The Treasury hack seems like an eternity ago — From Maggie Miller: “The Trump administration on Wednesday announced a series of charges and sanctions against a dozen Chinese nationals — including two tied to the Chinese government — for hacking critical U.S. government systems.” When it rains… — From Katherine Hapgood: “Sen. John Kennedy (R-La.), co-leader of Senate Banking’s National Flood Insurance Program working group, introduced a bill to reauthorize the NFIP under its current form until September 30, 2025.”
| | First in MM: Small businesses still see upside — New survey data collected by Goldman Sachs 10,000 Small Businesses Voices found that nearly seven-in-10 small business owners feel positive about their financial outlook for 2025. Still, more than half said they can’t afford to take out a loan at current interest rates, and 54 percent of those surveyed said they still view inflation as the biggest policy priority for the Trump administration. Survey respondents also identified simplifying the tax code and Small Business Administration reforms among their top priorities. Speaking of economic uncertainty… — Business executives are moderating their optimism for the U.S. economy, according to a quarterly economic outlook survey conducted by the Association of International Certified Professional Accountants. Just 47 percent of those surveyed said they were optimistic, a 20 percentage point decline from what was reported during the fourth quarter. | | | | Follow us on Twitter | | | | Follow us | | | |
