Morning Report — Trump drives a tariff pause for carmakers

Editor’s note: The Hill’s Morning Report is our daily newsletter that dives deep into Washington’s agenda. To subscribe, click here or fill out the box below.

In today’s issue:

Trump delays auto tariffs for a month
Veterans Affairs faces big layoffs
RFK Jr. receives measles stress test
U.S. pauses intelligence sharing with Ukraine

Carmakers will get a month-long reprieve from President Trump’s tough tariffs levied this week on goods from Canada, Mexico and China, the administration said Wednesday after Trump spoke with executives from General Motors, Ford Motor Company and Stellantis.

The president is considering a tariff carve-out for certain agricultural products.

Trump also spoke with Canadian Prime Minister Justin Trudeau and is expected today to talk with Mexican President Claudia Sheinbaum. Trudeau told the president he’s not inclined to lift any Canadian retaliatory tariffs if the U.S. leaves any levies on Canadian goods. Trump said Trudeau was angling to remain in power by focusing on the tariff battles. In their discussions, the president suggested the prime minister was not doing enough to keep the synthetic opioid fentanyl from crossing into the U.S. from Canada.

The president defended his tariff rationale during an address to Congress on Tuesday, conceding some “disruptive” effects, which were visible this week in financial markets and among some whiplashed Senate Republicans. But automakers had quickly warned Tuesday that Trump’s tariffs would raise car prices by 25 percent.

The U.S. in 2024 imported $79 billion worth of cars and light trucks from Mexico and $31 billion from Canada. Another $81 billion in auto parts came from Mexico and $19 billion from Canada, the Associated Press reported.

Vice President Vance, traveling in Texas near the border with Mexico on Wednesday, suggested to reporters that industries other than U.S. automakers would not get tariff reprieves.

“A number of industries have reached out to us to ask us for exceptions to the tariffs,” Vance said. “[Trump] wants tariffs to apply broadly. He doesn’t want to have 500 different industries getting 500 different carve-outs.”

“The way to avoid application of the tariffs is to have your factory and have your facility in the United States of America,” the vice president added.

Automakers urged Trump to waive 25 percent tariffs on Mexico and Canada on vehicles that comply with the United States-Mexico-Canada Agreement’s (USMCA) rules of origin. Trump agreed, but only temporarily, to keep pressure on the companies.

“Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month, so they are not at an economic disadvantage,” said White House press secretary Karoline Leavitt.

Commerce Secretary Howard Lutnick on Tuesday broke the news that Trump was eyeing a compromise with Canada, which retaliated with its own 25 percent tariffs on U.S. goods. Mexico said it would respond to the tariffs on Sunday. Lutnick predicted Trump would not simply postpone tariffs.

“It’s not going to be a pause — none of that pause stuff,” Lutnick assured Fox Business.

On Wednesday, Lutnick told Fox News, “There’s going to be a short period of time where there will be some higher prices on certain products. It’s not inflation.”

The Hill: How Trump’s tariffs could pinch the tech sector.

SMART TAKE with NewsNation’s BLAKE BURMAN:

The headline in The Hill reads “Supreme Court denies Trump administration request to cancel $2 billion in foreign aid.” That, of course, is a big story given what the Trump administration is trying to do on spending.

However, another thread emerged as well, one you may or may not have seen in the social media space: conservatives wondering about Justice Amy Coney Barrett, as she joined liberal justices and Chief Justice John Roberts in the decision. This is not the first time that the justice, who was appointed by President Trump, has sided against the other Trump-appointed justices.

Jesse Weber, NewsNation legal contributor, tells me while the ruling is certainly interesting, there are still some unanswered questions, and it’s adding to the intrigue.

“We don’t really know what persuaded her and the other justices to go and actually say that the federal government has to pay out this money to uphold the lower court’s order,” Weber said, “and that’s the issue.”

Burman hosts “The Hill” weeknights, 6p/5c on NewsNation.

3 THINGS TO KNOW TODAY:

▪ Trump is expected to issue an executive order as soon as today aimed at abolishing the Education Department.

▪ More state colleges are letting high school students know they are promised admission before they even apply.

▪ Off the market? The Trump administration, after news media coverage Tuesday, removed the FBI and Justice Department headquarters from an earlier list of federal properties for sale. On Wednesday, the list disappeared entirely.

LEADING THE DAY

© The Associated Press | Charles Dharapak

THE DEPARTMENT OF VETERANS AFFAIRS (VA) plans to purge more than 83,000 jobs, aiming to return to pre-2019 employment levels at a sprawling Cabinet department in which more than a quarter of employees are veterans.

The memo, sent by VA chief of staff Christopher Syrek, said the agency-wide reorganization will take place this August and instructed top-level officials to prepare to “resize and tailor the workforce to the mission and revised structure” while working closely with the Department of Government Efficiency (DOGE).

On Capitol Hill, veterans carry significant sway on both sides of the aisle. Democrats have decried the cuts at the VA, while Republicans have watched with caution.

Rep. Mark Takano (Calif.) the top Democrat on the House Veterans’ Affairs Committee, said the VA’s plan was not just dangerous but an “outright betrayal of veterans.”

“Gutting VA’s staffing to [2019] levels will cripple the very system that millions of veterans rely on, denying them access to lifesaving health care, claims processing, and education benefits they’ve earned,” he said.

▪ ProPublica: How DOGE’s cuts to the IRS threaten to cost more than DOGE will ever save.

▪ WIRED: DOGE engineers and executives are drawing high taxpayer-funded salaries — sometimes from the very agencies they are cutting.

REPUBLICAN SENATORS TOLD tech billionaire Elon Musk at a closed-door meeting Wednesday that his aggressive moves to shrink the federal government will need a vote on Capitol Hill, sending a clear message that he needs to respect Congress’s power of the purse. Musk also learned from lawmakers about budget rescissions, an obscure legislative tool that could enshrine his team’s government cuts into law. He was described as thrilled.

DOGE isn’t just facing pressure from lawmakers. The Supreme Court in a 5-4 emergency ruling Wednesday refused to halt a judge’s decision ordering the Trump administration to immediately release nearly $2 billion in foreign aid payments owed under existing contracts. It hands a loss to the administration as Trump’s efforts to drastically reshape federal spending, agency by agency, reach the high court.

Meanwhile, The Trump administration is signaling it may bring criminal referrals against employees of the U.S. Agency for International Development (USAID) or grantee recipients over allegations of misuse of foreign assistance.

▪ The Hill: A federal board ordered the U.S. Department of Agriculture to temporarily reinstate dismissed probationary workers.

▪ The Hill: A federal judge pressed pause on the National Institutes of Health funding cuts.

BUDGET: Eight days to go until the government funding deadline. Trump met Wednesday with members of the House Freedom Caucus to discuss unifying around a plan for a stopgap bill to keep the government open ahead of a looming shutdown deadline. House conservatives, normally wary of any funding patches, signaled confidence that they would support such a measure once finalized.

The move would give Congress more time to hammer out a budget, after House and Senate Republicans earlier this year advanced competing spending agendas.

▪ The Hill: Republicans need to cut Medicaid to hit their budget savings target, the Congressional Budget Office finds.

▪ Bloomberg News: A House Republican warned a debt ceiling breach is possible in May.

Free-market economics bigwigs, at the request of Trump, have assembled a team to push making the president’s 2017 tax cuts permanent — and to do it as quickly as possible. The Hill’s Emily Brooks reports the Tax Cut Victory Alliance, a coalition of taxpayer groups, business groups, state organizations and activists launching today, is urging Congress to permanently extend cuts under the Tax Cuts and Jobs Act in Trump’s first 100 days. The coalition is an example of how free marketers, even if they cringe at the tariffs, are largely putting those concerns aside as they boost Trump in hopes of securing other tax and economic wins.

ON THE HILL: The House this morning will consider a resolution to censure Rep. Al Green (D-Texas) for interrupting the president Tuesday during a joint session of Congress while trying to admonish Trump against Medicaid cuts. A Democratic-led motion to table punishment of Green fell short on Wednesday.

Rep. Sylvester Turner (D-Texas), the former Houston mayor who won a seat in Congress in November and succeeded the late Rep. Sheila Jackson Lee (D), died a few hours after Trump’s speech. He was 70.

▪ USA Today: “Don't mess with Medicaid”: Turner’s final message to Trump.

▪ The Hill: Democrats brought the Medicaid fight to Trump at his joint address.

Trump's Tuesday call to repeal the CHIPS and Science Act — which provided $52 billion for the domestic semiconductor manufacturing industry — during his address to Congress faces stiff GOP opposition in the Senate. Seventeen Republicans, including Sens. John Cornyn (Texas), Todd Young (Ind.) and Mitch McConnell (Ky.), voted for the bill in 2022. Their votes would be critical to passing any reconciliation package that would be needed to repeal the bipartisan bill, which former President Biden counted as one of his biggest achievements.

The Washington Post: Democratic mayors faced withering attacks on “sanctuary city” policies Tuesday. The leaders of Boston, Chicago, Denver and New York testified for hours before a largely hostile House committee.

WHERE AND WHEN

The House will meet at 9 a.m.
The Senate will convene at 10 a.m.

ZOOM IN

© The Associated Press | Win McNamee, Getty Images

STATE WATCH: The measles outbreak in Texas continues to grow, almost exclusively through unvaccinated people, and as federal agencies aid the state, Robert F. Kennedy Jr., the longtime vaccine skeptic now in charge of federal health policy, is promoting vitamins as a way to fight the virus. The most recent update from state authorities counts 159 measles cases, including one unvaccinated child who died last week shortly after being hospitalized. Kennedy, now the Health and Human Services secretary, has long questioned the safety and efficacy of vaccines. In the face of the outbreak, he has seemingly softened his stance, writing in an op-ed for Fox News that the measles vaccines “not only protect individual children from measles, but also contribute to community immunity.”

At the same time, Kennedy has begun promoting the use of vitamin A as a way of treating measles, with the Centers for Disease Control and Prevention updating its guidance on measles management to include “physician-administered outpatient vitamin A.”

Andy Pavia, professor of pediatrics and medicine at the University of Utah, expressed concerns that Kennedy is misrepresenting what added vitamins can do, including as a preventive therapy.

“There’s absolutely no evidence that taking extra vitamin A will prevent you from getting measles,” Pavia said. “Only vaccines will do that or having had a previous infection.”

▪ The Hill: Abortion care has resumed in Missouri after voters enshrined rights. Providers fear it won't last.

▪ The Hill: Secretary of Energy Chris Wright on Tuesday threw his support behind a vast expansion in geothermal energy. New forms of geothermal, in which Wright’s oil and gas drilling company invested millions, use technology from the fossil fuel boom to generate power on demand without air pollution.

POLITICS: Former Rep. Mary Peltola (D) is reportedly considering a run for Alaska governor, stoking Democratic hopes that she could clinch another upset victory in the red state. Peltola became the first Democrat to win the state’s lone House seat in 50 years in 2022 before narrowly losing reelection in 2024. Democrats are hopeful she could pull off another win in 2026, in a state where a registered Democrat hasn’t held the governor’s mansion since 2002.

Sen. Elissa Slotkin’s (D-Mich.) rebuttal speech to Trump’s joint address to Congress was a bright spot for Democrats on Tuesday. Slotkin, a first-term swing state senator, leaned on her national security bona fides and slammed the president for prioritizing the wealthy. For some observers, the contrast between Slotkin and the chaotic response from other members of her party underscored Democrats’ challenges as they try to formulate a unified and effective response to the president.

“She’s the one who I think has the best chance to be remembered at the end of the day for delivering a message that Democrats want to hear,” said longtime Democratic strategist David Thomas. “If you choose to hold up a sign or you choose to walk out, I’m not sure that’s remembered a week from now.”

The Atlantic: The advice Slotkin didn’t take. The Michigan senator wants to set a new tone for the Democratic resistance.

ELSEWHERE

UKRAINE: The U.S. paused large swaths of its intelligence sharing with Kyiv, restricting information that Ukraine has used to deter Russian attacks and strike back against targets in the country. The pause follows Trump’s decision to freeze military aid to Ukraine in an effort to pressure Ukrainian President Volodymyr Zelensky to enter peace talks with Moscow. CIA Director John Ratcliffe on Wednesday told Fox Business that he thinks intelligence sharing would resume.

“President Zelensky put out a statement that said, ‘I am ready for peace, and I want President Donald Trump’s leadership to bring about that peace,’” Ratcliffe said. “And so I think on the military front and the intelligence front, the pause that allowed that to happen, I think will go away, and I think we’ll work shoulder to shoulder with Ukraine as we have, to push back on the aggression that’s there.”

Zelensky’s top aide said Wednesday that a meeting between Washington and Kyiv delegations was scheduled for the “near future” to further discuss peace talks that could end the three-year war in Eastern Europe.

▪ NBC News: “Wrong, wrong, wrong”: Trump's far-right allies in Europe fault his Ukraine stance.

▪ CNN: Europe’s leaders are meeting in Brussels today for another crucial Ukraine summit. Can they seize momentum back from Trump?

GAZA CEASEFIRE: Trump administration officials have been holding direct talks with Hamas in an effort to release American hostages held in Gaza, the White House confirmed, as well as the possibility of a broader deal to end the war. The talks are the first of their kind; before U.S. presidential envoy for hostage affairs Adam Boehler began meeting with the militant group in Doha, the U.S. had never before engaged directly with Hamas, designated as a terrorist organization in 1997.

After meeting with released Israeli hostages Wednesday, Trump issued an ultimatum to Hamas. Release every prisoner still being held in Gaza or “it is OVER for you.”

▪ Reuters: Hamas says Trump’s threats encourage Israeli Prime Minister Benjamin Netanyahu to evade Gaza ceasefire deal.

▪ NPR: What went wrong? Israel's spy agency lists failures in preventing the Oct. 7, 2023, attack.

OPINION

■ Real Ukraine peace talks require a real U.S. security guarantee, by Andreas Kluth, columnist, Bloomberg Opinion.

■ Medicaid cuts risk children’s health and academics, by Thomas Toch, opinion contributor, The Hill.

THE CLOSER

Take Our Morning Report Quiz

And finally … 🧩 It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Alert to explorers and expansionists, we’re eager for some smart guesses about environments in the news.

Be sure to email your responses to asimendinger@thehill.com and kkarisch@thehill.com — please add “Quiz” to your subject line. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

President Trump, during his Tuesday speech to Congress, predicted the U.S. will one day “plant the American flag” in which hostile environment?

Mexico City
Toronto
Mars
Gaza

Lander “Athena” was sent to the moon a week ago to hunt for what?

Green cheese
Water ice
Rare minerals
Snake-shaped crevices

Lander “Blue Ghost” is on the moon as of this writing doing what?

Sending photos back to Earth
Dismantling China’s lunar lander
Building a space hotel for future manned missions
Retrieving decades-old space junk for recycling

NASA’s Butch Wilmore, Suni Williams and Nick Hague, as well as cosmonaut Aleksandr Gorbunov, said Tuesday they expect to head home this month from where?

Cape Canaveral Space Force Station
International Space Station
Johnson Space Center
Tiangong Space Station

Stay Engaged

We want to hear from you! Email: Alexis Simendinger (asimendinger@thehill.com) and Kristina Karisch (kkarisch@thehill.com). Follow us on social platform X: (@asimendinger and @kristinakarisch) and suggest this newsletter to friends.

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