(WASHINGTON) — The Supreme Court on Tuesday said the Trump administration can move forward with the termination of 16,000 probationary federal workers across six agencies and departments, rescinding a lower court order that they be reinstated as litigation challenging the layoffs continues.
This is a developing story. Please check back for updates.
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(WASHINGTON) — Amid mixed messaging from top White House officials, President Donald Trump was asked directly on Monday whether his sweeping tariffs are negotiable or here to stay.
“They can both be true,” Trump responded. “There can be permanent tariffs and there can also be negotiations because there are things that we need beyond tariffs.”
For days, from Trump on down, administration officials have offered conflicting statements on whether countries can do anything to save themselves from the tariffs, which include a universal 10% tariff implemented over the weekend and what they claimed were more targeted “reciprocal” tariffs to take effect on Wednesday.
On Monday alone, Treasury Secretary Scott Bessent shared he was tasked with negotiating with Japan while White House trade advisor Peter Navarro penned an editorial that the new policies are “not a negotiation.”
Bessent posted on social media that following a “very constructive phone discussion” with Japanese officials, Trump instructed him and U.S. Trade Representative Jamieson Greer to “open negotiations to implement the President’s vision for the new Golden Age of Global Trade.”
Navarro wrote in the Financial Times that Trump wouldn’t be backing down from his “reciprocal” tariffs on nations the administration’s deemed the worst offenders in trade relations.
“This is about fairness, and no one can argue with that. This is not a negotiation,” Navarro wrote. “For the US, it is a national emergency triggered by trade deficits caused by a rigged system. President Trump is always willing to listen. But to those world leaders who, after decades of cheating, are suddenly offering to lower tariffs — know this: that’s just the beginning.”
When Trump announced the sweeping tariffs in the White House Rose Garden, he justified them as a response to a “national emergency” caused by trade deficits and unfair practices with global partners.
Since then, markets at home and abroad slumped. Foreign leaders recoiled, with some — like China — taking retaliatory action against the United States. Economists increased their odds of a recession this year.
Officials were pressed to justify the action on Sunday morning news shows, where again the confused messaging was apparent. Trump spent the weekend golfing as fallout from his tariff policy continued.
Commerce Secretary Howard Lutnick, on the CBS News program “Face the Nation,” said tariffs were going to “stay in place for days and weeks” and that “this is the policy.”
Meanwhile, National Economic Council Director Kevin Hassett, on ABC News’ “This Week,” boasted that 50 countries had reached out to the White House to negotiate tariffs.
Trump on Monday said they’re open to “fair deals” with foreign leaders that put “America first” — but that tariffs would stay in place in the meantime.
“We’re going to get fair deals and good deals with every country. And if we don’t, we’re going to have nothing to do with them. They’re not going to be allowed to participate in the United States,” he said.
ABC News Chief White House Correspondent Mary Bruce asked Trump on Monday if he’d be open to a pause in tariffs to allow for negotiation.
“Well, we’re not looking at that,” Trump responded. “We have many, many, countries that are coming to negotiate deals with us, and they’re going to be fair deals. And in certain cases, they’re going to be paying substantial tariffs.”
A rumor of a possible 90-day tariff pause that circulated on Monday caused stocks to briefly spike into green territory before going back into the red when the White House denied the report.
Trump said in the Oval Office that he doesn’t “mind going through it,” seemingly a nod to the criticism and volatility of the market because he believes it’s worth it at the end of the day.
“So, it’s got to be very interesting,” he said. “It’s the only chance our country will have to reset the table because no other president would be willing to do what I’m doing or to even go through it. Now, I don’t mind going through it because I see a beautiful picture at the end.”
ABC News’ Michelle Stoddart contributed to this report.
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(WASHINGTON) — The Trump administration has asked the Supreme Court for emergency intervention in the case of a Maryland man the government — by its own admission — removed to El Salvador by mistake and now must return by 11:59 p.m. on Monday under a lower court’s order.
Solicitor General D. John Sauer argued in the filing that a federal court cannot order a president to engage in foreign diplomacy, which he says is implicitly involved in any potential return of Kilmar Armando Abrego Garcia, who the Trump administration alleges is a gang member.
“The Constitution charges the President, not federal district courts, with the conduct of foreign diplomacy and protecting the Nation against foreign terrorists, including by effectuating their removal,” Sauer writes. “And this order sets the United States up for failure. The United States cannot guarantee success in sensitive international negotiations in advance, least of all when a court imposes an absurdly compressed, mandatory deadline that vastly complicates the give-and-take of foreign-relations negotiations.”
The appeal to the Supreme Court came Monday morning, just before the 4th Circuit Court of Appeals agreed with a ruling by U.S. District Judge Paula Xinis that Garcia must be returned by 11:59 p.m. on Monday
The 4th Circuit Court of Appeals rejected the Trump administration’s emergency motion to block the order to return Garcia to the U.S. after he was sent to a prison in El Salvador despite having protected legal status.
In a unanimous decision, the panel of three judges agreed Xinis’ order requiring the government “to facilitate and effectuate the return of [Garcia] by the United States by no later than 11:59 pm on Monday, April 7, 2025,” should not be stayed.
“The United States Government has no legal authority to snatch a person who is lawfully present in the United States off the street and remove him from the country without due process,” the judges said. “The Government’s contention otherwise, and its argument that the federal courts are powerless to intervene, are unconscionable.”
Xinis had ruled on Friday that Garcia must be returned to the U.S.
This is a developing story. Please check back for updates.
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(WASHINGTON) — The 4th Circuit Court of Appeals has rejected the Trump administration’s emergency motion to block a federal judge’s order to return Kilmar Armando Abrego Garcia to the U.S. after he was sent to a prison in El Salvador despite having protected legal status.
In a unanimous decision, the panel of three judges agreed U.S. District Judge Paula Xinis’ order requiring the government “to facilitate and effectuate the return of [Garcia] by the United States by no later than 11:59 pm on Monday, April 7, 2025,” should not be stayed.
“The United States Government has no legal authority to snatch a person who is lawfully present in the United States off the street and remove him from the country without due process,” the judges said. “The Government’s contention otherwise, and its argument that the federal courts are powerless to intervene, are unconscionable.”
Xinis had ruled on Saturday that the man must be returned to the U.S.
This is a developing story. Please check back for updates.
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(WASHINGTON) — As fallout continues from President Donald Trump’s destabilizing tariff policy on virtually all U.S. trading partners, some Republican senators are warning about the risks for American families.
Sen. Ted Cruz, a Texas Republican and ardent Trump supporter, made headlines when he spoke out — first on Fox News last week and in recent days on his podcast “Verdict.”
“Tariffs are a tax on consumers, and I’m not a fan of jacking up taxes on American consumers, so my hope is these tariffs are short-lived, and they serve as leverage to lower tariffs across the globe,” Cruz told Fox Business host Larry Kudlow.
Cruz reiterated that point on his podcast, saying it would be a win if the administration used the policy as leverage to quickly negotiate down tariffs imposed by other nations but if it stays in place long term it could increase inflation, hurt job growth and possibly put the U.S. into a recession — the latter of which would result in a “bloodbath” for the Republican Party in the 2026 midterm election.
“If we’re in a scenario 30 days from now, 60 days from now, 90 days from now with massive American tariffs and massive tariffs on American goods in every other country on Earth, it’s a terrible outcome,” he said on Friday.
Trump officials, including Treasury Secretary Scott Bessent and Agriculture Secretary Broke Rollins, were confronted with his comments during Sunday morning news shows. They largely sidestepped the comments as they projected optimism about the policy’s long term impact.
Sen. Rand Paul, a Kentucky Republican, voiced similar concerns as Cruz.
“Tariffs are taxes and Americans are paying the price,” Paul wrote on X last week.
Paul also spoke on the Senate floor criticizing Trump’s argument that the tariffs are necessary because of what he claimed was a “national emergency” regarding trade deficits. Paul said Congress needed to reassert its constitutional power to regulate tariffs and foreign trade.
“I am a Republican. I am a supporter of Donald Trump,” Paul said. “But this is a bipartisan problem. I don’t care if the president is a Republican or a Democrat. I don’t want to live under emergency rule. I don’t want to live where my representatives cannot speak for me and have a check and balance on power.”
“One person can make a mistake and guess what — tariffs are a terrible mistake,” Paul said.
“Tariffs are like whiskey: A little whiskey, under the right circumstances, can be refreshing — but too much whiskey, under the wrong circumstances, can make you drunk as a goat,” Sen. John Kennedy, a Louisiana Republican, said last week.
Sen. Chuck Grassley, an Iowa Republican, introduced a bill last week that would require Congress to approve any new tariffs. Grassley teamed up with Democratic Sen. Maria Cantwell on the legislation.
Cantwell said on CBS News “Face the Nation” on Sunday that seven Republicans were on board with the bill. Rep. Don Bacon, a Nebraska Republican, told CBS he was “beginning support” for a similar measure in the House.
But the legislation faces an uphill battle, as it would need significant Republican support in both chambers to pass and Speaker Mike Johnson opposes the the idea.
And so far, there are limited signs of any widespread cracks in overall support for Trump.
Sen. John Barrasso, a member of Republican leadership, said on Sunday that he believed Trump’s actions on tariffs were constitutional.
“So, in terms of the tariffs, I believe they’re a tool, and I think we have to go after China,” Barrasso said on CBS. “They have been abusing us for years, and I believe the President is on firm constitutional grounds.”
House and Senate lawmakers are returning to Washington on Monday.
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(WASHINGTON) — A group of business groups and conservative lawyers are preparing a legal challenge to President Donald Trump’s tariffs, arguing he does not have the legal authority to impose them.
Sources familiar with the effort say they are preparing to file the challenge in the coming weeks, possibly as soon as this Friday.
One prominent legal figure close to Trump told ABC News there is “a very good chance” the U.S. Supreme Court would find Trump’s tariffs unconstitutional.
The issue is this: Congress, not the president, has the power to impose taxes and regulate trade. In imposing these tariffs, President Trump cited the 1977 International Emergency Economic Powers Act (IEEPA), which gives the the president power to regulate international commerce in the event of a national emergency.
But the IEEPA — which specifically cites the power to impose sanctions and seize foreign assets — does not mention tariffs. And, even if one argues the right to impose tariffs is implied, it’s not clear what “national emergency” could justify the imposition of global tariffs.
“There is a strong argument that the tariffs imposed under the IEEPA are not legal or constitutional,” a prominent conservative lawyer close to President Trump told ABC News. “Under that particular statute, tariffs are not listed amongst the various actions a president can take in response to the declaration of a nation emergency.”
The lawyer adds: “And when you combine that with the fact that Article 1, Section 8 [of the Constitution] clearly gives Congress the power to impose duties — tariffs — I think those two things in combination raise a very, very serious legal question.”
Another conservative lawyer familiar with the expected legal challenge to Trump’s tariffs predicted the Supreme Court would rule 9-0 against the administration if it reaches the high court.
A lawsuit has already been filed against the 20% sanctions Trump imposed on China earlier this year. The White House cited the IEEPA in imposing those tariffs as well, and the president said they were in response to China’s failure to stop the flow of fentanyl into the United States.
The suit was filed in a federal court in Florida last week by The New Civil Liberties Alliance, a conservative legal, on behalf of a Florida-based paper company called Simplified.
Trump’s tariffs are the first time a president has attempted to impose global tariffs by citing the IEEPA. The steel and aluminum tariffs Trump imposed on China during his first term where narrower and done under a different congressional authorization. But that act doesn’t specifically give the president the authority to impose tariffs — and it’s not clear what the emergency is that would justify his actions under the law.
Tariffs have never previously been imposed under the emergency power Trump is using here. The tariffs he imposed in his first term (and President Joe Biden’s tariffs, too) were imposed citing different congressional authorizations.
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(WASHINGTON) — A contract to inspect low-income and other assisted housing for gas leaks, faulty smoke detectors and other life-threatening deficiencies was terminated by the Trump administration in February as part of its cost-cutting efforts, according to a Department of Government Efficiency database, potentially leaving thousands of vulnerable Americans in harm’s way.
Tom Feehan, a veteran home inspector who lost work as part of the termination, told ABC News that these legally required inspections frequently uncover painted-over ceiling sprinklers, defective gas ranges and any number of home-related liabilities that can pose a danger to occupants.
“By not doing [the inspections], we’re not catching those,” Feehan said. “So those are not being repaired, and it’s putting people at risk.”
Last year, the contractor, Project Solutions Inc., in its third year of working with the U.S. Department of Housing and Urban Development, was assigned to inspect roughly 6,200 public housing and multifamily properties across the country over the course of 12 months. In addition to flagging dangerous conditions, the inspections ensure that tenants have hot and cold water, safe electrical outlets, and working heating and cooling systems, experts said.
A HUD official told ABC News that the contract was for “software modification,” despite Project Solutions identifying the contract as being for inspection services. The HUD official declined to elaborate on the reason behind the contract’s termination.
The sudden termination threatens thousands of inspections, according to Robin Miller, a contract manager at Project Solutions, including those at roughly 250 “priority” properties, where inspections were already delayed or significant deficiencies were found during previous inspections.
Project Solution’s contract termination was among more than 7,000 federal contracts canceled by DOGE and posted to the agency’s “Wall of Receipts” web page in recent weeks. The DOGE site claimed that terminating the inspection contract would return $285 million to taxpayers.
But Miller, the Project Solutions official, said that figure was inflated because it was based on a high estimated ceiling value that wasn’t reflective of what the contract would actually cost. According to federal spending records, HUD had only awarded Project Solutions roughly $29 million so far.
Experts said it was unclear how housing officials planned to carry out the outstanding inspections.
HUD spokesperson Kasey Lovett said in a statement that “HUD is reviewing all contracts for efficiency and effectiveness to accomplish good government goals,” and that “certain contracts were found not to accomplish HUD’s mission with economy, efficiency, and effectiveness.”
Industry experts said that the inspections, which are required by law, will likely fall to other contractors at a similar price. But arranging those inspections will take time, experts said, and delaying inspections compounds the risks for tenants.
“We’re helping low-income people and we’re helping senior citizens maintain a safe, livable environment,” Feehan said. “And with not getting these inspections done on time, it’s hurting them.”
Another HUD-certified inspector based in Illinois, who asked that their name not be used so they could speak freely about their field of work, told ABC News that one of the properties that was scheduled to be inspected until the Project Solutions contract was canceled was a 24-unit multifamily property that had received far below the “failing” score, meaning significant deficiencies were found during its previous inspection and the property needed more frequent inspections. The property was already past due its Dec. 13, 2024, inspection date, and its inspection has yet to be rescheduled, the inspector said.
Project Solutions was one of at least three contractors that were hired to inspect HUD-insured and assisted properties under the agency’s Real Estate Assessment Center program, which is aimed at “improving housing quality by performing accurate, credible, and reliable assessments” of its properties.
“I 100% agree that all governments, all organizations, businesses, even personal family units, should routinely review budget and spending habits and cut things out that are not necessary,” the Illinois inspector said. “Get rid of the fraud, waste abuse — but you have to be responsible about it.”
“If it wasn’t for DOGE, we’d still be doing the contract. That’s my opinion,” Feehan said. “DOGE is trying to get rid of waste, fraud and abuse. I didn’t see where there was waste fraud and abuse with PSI.”
Alia Trindle, co-director of political strategy at housing advocacy group Right to the City Alliance, stressed that many HUD-funded buildings have been in dire shape for decades due to past funding cuts. She said for some properties, tenants and advocates have had to organize to push for basic repairs after years of neglect.
“Working-class and poor communities have to contend with substandard and neglected housing that could have devastating long-term health consequences for those that live there, from mold to pest to a lack of access to basic utilities like water and heat,” Trindle said.
“So regular inspections, whether done by HUD or HUD-affiliated groups or by municipalities, are critical to ensuring that those who are responsible for this housing stock do the bare minimum to maintain them,” she said.
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(JUPITER, FL) — As markets braced for another meltdown triggered by President Donald Trump’s sweeping tariffs, Democrats hammered the president for spending the weekend golfing rather than responding to Americans’ fears that their retirement accounts are plummeting with the markets.
Trump left Washington, D.C., for Florida on Thursday to attend a LiV Golf Tournament dinner ahead of a tournament at his Doral club in Florida. On Saturday and Sunday, he played in a club championship at his Trump National Golf Club in Jupiter.
On Thursday, the first trading day after Trump announced the tariffs, the Dow Jones Industrial Average plummeted nearly 4%, while the tech-heavy Nasdaq declined almost 6%. On Friday, the downward spiral continued with the Dow falling by 2,230 points, or 5.5%, while the S&P 500 plunged by 6%.
Dow futures opened Sunday evening down 1,500 points, or 4% percent., while the S&P 500 and NASDAQ 100 futures were also down 4%.
Democrats criticized Trump’s apparent lack of concern at Americans’ anxiety surrounding the tanking markets.
“I think people have seen their retirement savings on fire. And there he is out on the golf course,” Democratic Sen. Adam Schiff said Sunday on NBC’s “Meet the Press.” “That may end up being the most enduring image of the Trump presidency, that is, the president out on a golf cart while people’s retirement is in flames.”
On Saturday, Trump encouraged Americans to “HANG TOUGH” in a post on his Truth Social platform. “THIS IS AN ECONOMIC REVOLUTION, AND WE WILL WIN,” he said.
The same day, the White House told reporters covering the president that Trump had won his second-round matchup for the senior championship at his Jupiter club and was to play in the championship round on Sunday. Trump posted a video of him teeing off on Truth Social on Sunday, though it was not clear when the video was shot.
During Saturday’s “Hands Off” protests, Democratic lawmakers railed against Trump’s policies and his time on the golf course.
“Get your ass off the golf course and face the people!” California Rep. Eric Swalwell told Trump in front of a crowd protesting at the National Mall in Washington.
Rep. Jasmine Crockett of Texas posted on Bluesky: “Trump’s out here swinging golf clubs while folks are in the streets fighting back.”
Sen. Elizabeth Warren called on Republicans to help Democrats reverse Trump’s tariffs and stop what she called “the dumbest trade war in history.”
“While Donald Trump is relaxing on the golf course, working people are worried about rising prices and an economic crash,” she posted on X.
House Minority Leader Hakeem Jeffries also took issue with Trump’s weekend.
“You know, Donald Trump, the biggest lie that this guy ever told was that he cared about you, the American people. He does not. He cares about himself and his billionaire donors like Elon Musk,” Jeffries said Saturday on MSNBC’s “The Weekend.” “And as if we didn’t need any additional proof, but at the same time that the retirement savings is crashing, the stock market is crashing, the economy is crashing, Donald Trump is on the golf course? This is what he chooses to do?”
Trump boarded Air Force One in Palm Beach, Florida, en route back to Washington on Sunday without speaking to reporters.
ABC News’ Hannah Demissie contributed to this report.
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(WASHINGTON) — Speaker Mike Johnson and Florida GOP Rep. Anna Paulina Luna say they have cut a deal to end the fight over proxy voting for new parents, which will re-open the House floor after nearly a week of legislative paralysis.
House Republican leaders will formalize “vote pairing,” a procedure that allows a member who is absent during a vote to coordinate with a present member on the other side of the matter to offset the absence, multiple sources familiar with the deal told ABC News.
For example, the procedure in this case would allow a new mother, who is absent for a House vote, to team up with a present lawmaker voting opposite from their stance to form a “pair.”
Some logistics of this deal remain unclear including how this will be enforced.
Vote pairing — which is a rare practice in Congress — is certainly not an equivalent to remote voting but allows for an absence to be offset. But the absent member’s vote is not recorded into the tally of a recorded vote.
The vote pairing process was used in 2018 when the Senate voted to confirm Supreme Court Justice Brett Kavanaugh. At the time, Sen. Lisa Murkowski, R-Alaska, who said she would vote against Kavanaugh, paired her vote with Sen. Steve Daines’ of Montana so their votes would cancel out.
Johnson laid out the specifics of the agreement on a GOP member conference call Sunday afternoon, sources said.
In light of the deal, sources said Rep. Luna will not trigger her bipartisan discharge petition — which has 218 signatures — to allow mothers and fathers to vote remotely for up to 12 weeks after childbirth.
“Speaker Johnson and I have reached an agreement and are formalizing a procedure called ‘live/dead pairing’—dating back to the 1800s—for the entire conference to use when unable to physically be present to vote: new parents, bereaved, emergencies,” Rep. Luna posted in a statement on X.
Luna thanked President Donald Trump for his “support” of new mothers. “If we truly want a pro-family Congress, these are the changes that need to happen,” she added.
It is possible for other members — including any Democrat who signed the petition — to call up and force action on Rep. Luna’s measure. But it would likely fail if Republicans stick to the vote pairing agreement.
Johnson is still looking at ways to increase accessibility for new mothers in Congress like adding a room off the House floor for nursing mothers, sources said.
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(WASHINGTON) — White House National Economic Council Director Kevin Hassett defended President Donald Trump’s tariffs on Sunday, refuting the idea they will cost American consumers more.
“So, the fact is, the countries are angry and retaliating and, by the way, coming to the table. I got a report from the [U.S. Trade Representative] last night that more than 50 countries have reached out to the president to begin a negotiation. But they’re doing that because they understand that they bear a lot of the tariff. And so, I don’t think that you’re going to see a big effect on the consumer in the U.S. because I do think that the reason why we have a persistent, long-run trade deficit these people have very inelastic supply. They’ve been dumping goods into the country in order to create jobs, say, in China,” Hassett told ABC News’ “This Week” anchor George Stephanopoulos.
Trump announced tariffs on nearly all of the U.S.’s trading partners on Wednesday. Trump’s policy includes a 10% tariff on all imports, as well larger tariffs on some individual countries. The announcement was met with an immediate and ongoing plunge in global markets as well as various countries levying retaliatory tariffs against the U.S. Democratic lawmakers and critics of Trump’s economic policy raised alarms about a potential recession and adverse effects on the U.S.’s relationship with allies.
The universal 10% tariffs went into effect on Saturday, while tariffs on individual countries are set to go into effect on Wednesday.
Former Treasury Secretary Larry Summers disagreed with Hassett’s contention that tariffs will cause a drop in prices for American consumers.
“This is the biggest self-inflicted wound we’ve put on our economy in history. We are increasing inflation because the prices are higher because of the tariffs. That gives people less spending power. That means fewer jobs,” Summers said after Hassett’s interview. “Markets are looking at all of that. And they think companies are going to be worth $5 trillion less than they thought before these tariffs started. And that’s just the loss to companies. If you add in the loss to consumers, a reasonable estimate would probably be something like $30 trillion.”
Here are other highlights from Hassett and Summers’ interviews:
Hassett on Trump using the market crash to influence the Fed
Stephanopoulos: Right, but you also — he also said prices were going to come down and he just conceded the prices are going to go up. Also on Truth Social, the president retweeted a post that said the market drop was part of a deliberate strategy to force the Fed to lower interest rates. Is that the president’s strategy? If not, why did he post it?
Hassett: Yeah, that, you know, the bottom line is the president has been talking about tariffs for 40 years and this is like been absolutely the policy that he’s focused on in the campaign and throughout his political career. And you know, the cyclical cycle of the Fed, it comes and goes. That’s a different matter. But this is President Trump’s desired policy. He’s been arguing for it ever since. I think he was on “The View” 30, 40 years ago, and it’s exactly — the baseline tariff is exactly what he — he put into the convention.
Stephanopoulos: But is it his strategy —
Hassett: So, this is not a surprise for anyone.
Stephanopoulos: Is it his strategy to force the Fed to lower interest rates, and that the market crash was part of that strategy?
Hassett: We understand the Fed is an independent agency. We respect the independence of the Fed. But the president’s allowed to have an opinion. The — absolutely, the president’s allowed to have an opinion but there’s not going to be any political coercion over the Fed, for sure.
Stephanopoulos: So — so that is his strategy? Tank the market so the Fed will lower interest rates?
Hassett: No, no, no.
Hassett on the lack of tariffs against Russia
Stephanopoulos: Why did the president not include Russia on the list of countries who are facing tariffs?
Hassett: There’s obviously an ongoing negotiation with Russia and Ukraine, and I think the president made the decision not to conflate the two issues. It doesn’t mean that Russia, the fullest of time, is going to be treated wildly different than every other country, but Russia is one of the only countries, one of the few countries, that is not subject to these new tariffs, aren’t they? They’re in the middle of a negotiation, George, aren’t they?
Stephanopoulos: Well, I’m asking a different question: Why? And I just want to know why—
Hassett: Would you literally advise that you go in and put a whole bunch of new things on the table in the middle of a negotiation that affects so many American and Ukrainian and Russian lives.
Stephanopoulos: Negotiators do that. Negotiators do that all the time.
Hassett: No, no, that’s not appropriate to throw a new thing into these negotiations right in the middle of it. It’s just not.
Stephanopoulos: So you are conceding that Russia is not paying any new tariffs, unlike many of our allies, including Europe, Canada, Mexico.
Hassett: Russia is in the midst of negotiations over peace that affects, really, thousands and thousands of lives of people, and that’s what President Trump is focused on right now.
Summers on the stock market
Stephanopoulos: If you’re advising American consumers, also American corporate leaders on where this is headed, how would you counsel them to prepare for all of this?
Summers: Look, I think there’s a very good chance there’s going to be more turbulence in markets. The two-day move we saw on Thursday and Friday was the fourth largest two-day move since the Second World War. The other three were the 1987 crash, the 2008 financial crisis, and the pandemic. So a drop of this magnitude signals that there’s likely to be trouble ahead. And people ought to just be very cautious.
But the risk is, of course, when all of us decide to be cautious, that can become a bit of a self-fulfilling prophecy. Unless and until the president recognizes that this is a very serious error that is likely to have very adverse consequences, I think it’s likely to make things very difficult. I think people are right to hold off on making big new purchases, businesses are right to be cautious. People are right to want to hold cash. What we need is a reversal of these policies, and until we have a reversal, I think we’re going to have a real problem. This is a moment of testing for the president’s advisers. The intellectually honest ones know that this reflects presidential 40-year fixation, not any kind of proven economic theory.
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