Consumer Confidence Plunges Most in 35 Years

Happy Friday! Here's what's happening as we head into the weekend.

Trump Claims He's Made 200 Tariff Deals, but Doesn't Provide Details

Time magazine today published a wide-ranging, news-making and sometimes head-scratching interview it conducted this week with President Donald Trump to mark his first 100 days in office.

Trump spent much of the interview defending his economic policies and tariffs. The president insisted that what he's doing is right and will make the country "very rich" before long. "This is a tremendous success," he said. "You just don't know it yet, but this is a tremendous success what's happening. We're taking in billions and billions of dollars, money that we never took in before. We're also, very importantly, because of that, because of the money we're taking in, those companies are going to come back and they're going to make their product here."

Trump also made the mystifying claim that he's already made a couple hundred trade deals. "I've made 200 deals," he said.

"You've made 200 deals?" Time asked.

"100%," Trump insisted.

Asked to share who he's cut deals with, Trump tried to reframe the conversation, perhaps implying that he has decided unilaterally on the terms he wants. "View it differently: We are a department store, and we set the price," he said. "I meet with the companies, and then I set a fair price, what I consider to be a fair price, and they can pay it, or they don't have to pay it. They don't have to do business with the United States, but I set a tariff on countries."

Trump also said that China's President Xi Jinping had called him about the tariffs, but when asked about that conversation, Trump returned to his metaphor, saying: "We all want to make deals. But I am this giant store. It's a giant, beautiful store, and everybody wants to go shopping there. And on behalf of the American people, I own the store, and I set prices, and I'll say, if you want to shop here, this is what you have to pay."

China continues to deny that Trump and Xi have spoken. "China and the U.S. have not held consultations or negotiations on the issue of tariffs," a spokesman for China's foreign ministry said at a news conference on Friday. "The United States should not confuse the public."

Trump says he was joking when he promised to end the war in Ukraine on day one: The president said he was speaking "figuratively" when he promised to end war between Russia and Ukraine on his first day back in the White House and that comment was "an exaggeration" made "in jest."

Trump Shoots Down Idea of Tax Hikes on the Rich

Republicans returning to Capitol Hill next week will have plenty of decisions to make as they draft their massive package of trillions of dollars in tax breaks and spending reductions. As they hunt for ways to offset the cost of extending the 2017 tax cuts and the new cuts Trump promised on the campaign trail, the idea of raising taxes on the rich keeps swirling. Don't count on it happening.

President Trump himself has dismissed the idea as politically problematic, even as he has said he favors it.

In his new interview with Time magazine, Trump pointed to President George H.W. Bush as a reason he wouldn't favor a tax hike on the wealthy. "Well, I'll tell ya, I certainly don't mind having a tax increase, and the only reason I wouldn't support it is because I saw Bush where they said, where he said 'Read my lips' and he lost an election," Trump said, referring to Bush's famous reversal of a promise to not raise taxes.

Trump - who in 2016 bragged that not paying taxes "makes me smart" - told Time this week that he "would be honored to pay more" and the increase wouldn't be all that painful, but he worried about being tarred as a tax-hiker. "I could just see somebody trying to bring that up as a subject, and, you know, say, 'Oh, he raised taxes,'" Trump told Time. "Well, I wouldn't be, really, you know, in the true sense, I wouldn't. I'd be raising them on wealthy to take care of middle class. And that's-I love, that. I actually love the concept, but I don't want it to be used against me politically, because I've seen people lose elections for less, especially with the fake news."

Speaking to reporters in the Oval Office on Wednesday, Trump added another reason he wouldn't raise taxes on the rich: "I think it would be very disruptive, because a lot of the millionaires would leave the country," he said. "The old days, they left states. They go from one state to the other. Now with transportation so quick and so easy, they leave countries."

Trump added that it would be costly to have wealthy people flee the country over taxes. "You'll lose a lot of money if you do that," the president said. "Other countries that have done it have lost a lot of people. They lose their wealthy people. That would be bad, because the wealthy people pay the tax."

House Speaker Mike Johnson earlier this week also dismissed the idea of a tax increase on millionaires. "I would not expect that. We have been working against that idea," Johnson told Fox News. "I'm not in favor of raising the tax rates because our party is the group that stands against that traditionally. So there are lots of ideas thrown out on the table along this process over the last year, but I would just say for everybody, just wait and see."

The bottom line: Most Americans continue to favor higher taxes on top earners, and some Republicans have reportedly considered the idea as one option to limit the deficit damage of their party-line bill containing Trump's costly legislative agenda. Former Trump strategist Steve Bannon has been publicly urging Republicans to pair budget cuts with tax increases with tax increases on the wealthy. But any populist or budgetary pressure to raise tax rates on the wealthy is certain to face pushback across all levels of the Republican Party, from Trump on down.

Consumer Confidence Sees Biggest Decline in 35 Years

President Trump's chaotic trade war is shattering Americans' confidence in the economy, according to new survey data released Friday.

The University of Michigan's closely watched consumer confidence index dropped 32% between January and the end of April - the sharpest three-month decline since the recessionary year of 1990.

Consumer confidence was down 8% in April relative to March, a more modest decline than expected thanks to Trump's suspension of his "reciprocal tariff" plan on April 9, which helped raise a preliminary monthly reading of 50.8 to a final reading of 52.2. But even with the smaller-than-expected decline, the monthly reading was still the fourth lowest going back to 1952. The index registered 74 in December.

Survey leader Joanne Hsu said the deterioration in the April data was "particularly strong" for middle-class households. At the same time, "expectations worsened for vast swaths of the population across age, education, income, and political affiliation," Hsu said. "Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead."

Inflation expectations soar to highest since 1981: Year-ahead expectations for inflation surged to 6.5%, up a point and a half from March and the highest reading since 1981, when the country was struggling with stagflation, marked by rising inflation and rising unemployment at the same time. Growing worries about inflation were seen across all political affiliations, with even Republicans displaying an increase in expectations, albeit a much lower level (0.4%) than Democrats (8.0%) and independents (6.5%).

In addition to inflation, consumers are worried about losing their jobs. About two-thirds say they expect unemployment to rise, and 44% believe they will be worse off financially in a year. Those perceptions could contribute to an economic slowdown. "Without reliably strong incomes, spending is unlikely to remain strong amid the numerous warning signs perceived by consumers," Hsu said.

Economists see trouble ahead: Like consumers, economists are reducing their expectations for growth in the coming year, and the odds of a recession are rising. Economistssurveyedby Bloomberg now see a 45% chance of recession in the coming year, a sharp increase from the 30% odds they reported in March.

The "U.S. economy is pointed in a bad direction," Bill Adams, the chief economist for Comerica Bank,saidFriday, per Politico. "The further it goes, the higher the risk of a recession."

Poll After Poll Delivers Bad News for Trump

A slew of new polls this week found that Americans are souring on President Trump and his economic policies.

• 56% disapprove of the job Trump is doing as president, compared to 42% who approve (AP/NORC poll) "His standing is historically low for a president this early in a term, but it is in line with his stubborn unpopularity, which did not prevent him from sweeping the battleground states in last year's election," The New York Times says.

A Fox News poll similarly found a 44% approval rating for Trump. "That's lower than the approval of Joe Biden (54%), Barack Obama (62%), and George W. Bush (63%) at the 100-day mark in their presidencies. It's also lower by 1 point compared to Trump's 45% approval at this point eight years ago," Fox reports.

• 61% of U.S. adults disapprove of Trump's handling of the economy (AP/NORC).
• 64% of adults disapprove of Trump's handling of tariffs (Washington Post/ABC News/Ipsos).
• 59% of adults say Trump has gone too far in the tariffs he is imposing (AP/NORC).
• 59% of registered voters disapprove of Trump's handling of inflation (Fox News).
• 54 of registered voters say Trump is hurting the economy in the Fox News poll, while the Times found 50% say Trump has made the economy worse.
• 76% of adults say Trump's tariff policies will raise the costs of consumer products (AP/NORC).
• 50% say the tariffs will increase U.S. manufacturing and 40% say the tariffs will add U.S. jobs (AP/NORC).
• 54% of voters say Trump is "exceeding the powers available to him" (NYT/Siena).
• 66% of voters say the word "chaotic" describes Trump's second term well (NYT/Siena).
• 59% of voters say the word "scary" describes Trump's second term well (NYT/Siena).
• 51% say they are discouraged about the next four year (Fox News).

Number of the Day: $51 Billion

A 25% tariff on imported pharmaceuticals would raise U.S. drug costs by almost $51 billion a year, Reuters reports, citing a new analysis by Ernst & Young. U.S. drug prices would rise by as much as 12.9% if passed on to patients, according to the report, which was commissioned by the Pharmaceutical Research and Manufacturers of America, the drug industry's main lobbying group.

Fiscal News Roundup

• Trump Claims '200' Tariff Deals, Phone Call with Chinese President Xi in Wide-Ranging Interview – ABC News
• Trump Claims He’s Negotiating With China on Trade. China Says Otherwise – New York Times
• China Trolls Trump Over Tariffs as Both Sides Seek Ways to Limit Their Impact – NBC News
• Trump Budget to Take Ax to ‘Radical’ Safety Net Programs – New York Times
• Talk of Raising Taxes on Millionaires Swirls as Republicans Draft Trump’s ‘Big, Beautiful Bill’ – Associated Press
• ‘Won’t Have Anywhere to Hide’: Democrats Are Eager to Pick Apart the GOP Megabill – Politico
• Consumer Expectations Crater to Three-Decade Low Amid Trump Tariff Chaos – Politico
• Nearly Two-Thirds of Americans Disapprove of Trump Tariffs, with Inflation a Broad Concern: Poll – ABC News
• Product Shortages and Empty Store Shelves Loom With Falling Shipments From China – NBC News
• Economists Say Trade War Makes US Recession Almost a Coin Flip – Bloomberg
• Judge Blocks Trump Administration from Nixing Collective Bargaining for Most Federal Employees – Associated Press
• ‘A Gut Punch’: Trump Admin Cuts Wipe Out Firefighter Health and Safety Programs – Politico
• Pregnant and Cut by DOGE, Aid Workers Beg Trump Administration for Compassion – Washington Post
• Almost 4 in 10 Say Neither Party Fights for People Like Them: Survey – The Hill
• Pharma Tariffs Would Raise U.S. Drug Costs by $51 Billion Annually, Report Finds – NBC News
• Intel to Cut Jobs and Spending After Award of $7.9 Billion in Federal Grants – Washington Post
• DOGE Orders Major Cut to AmeriCorps Funding, Imperiling Agency’s Work – Washington Post
• FBI Arrests Milwaukee Judge, Alleging She Interfered in Immigration Operation – NBC News
• Inside Trump’s First 100 Days – Time

Views and Analysis

• Trump Keeps Contradicting Himself on Tariffs, Making a Fragile World Economy Nervous – Josh Boak, Associated Press
• Why Trump’s Call for the Fed to Cut Interest Rates May Not Help Consumers – Christopher Rugaber, Associated Press
• Fact-Checking What Donald Trump Said in His ‘100 Days’ Interview With TIME – Leslie Dickstein and Simmone Shah, Time
• 5 Takeaways From Trump’s Wide-Ranging Time Interview – Julia Mueller, The Hill
• Five Takeaways From the Times/Siena Poll – Shane Goldmacher, New York Times
• I Guess Elon Musk Doesn’t Remember Econ 101 – Gautam Mukunda, Bloomberg
• Trump Is Destroying 100 Years of Competitive Advantage in 100 Days – Fareed Zakaria, Washington Post
• Why Tackling America’s ‘Twin Deficit’ Now Is Essential – Nicholas Sargen, The Hill
• America, Our Long Inflation Nightmare Is Over — for Now – Kathryn Anne Edwards, Bloomberg
• Where's Mike Tyson With Advice When You Need Him? – John Authers, Bloomberg
• Trump Could Seal His Peace Deal with a $50B Arms Sale to Ukraine – Marc A. Thiessen, Washington Post
• Trump Just Did the Most Corrupt Thing Any President Has Ever Done – Michael Tomasky, New Republic
• Trump’s Pharmaceutical Tariffs Will Risk the Lives of American Patients – Marc L. Busch, The Hill
• RFK Jr.’s Absurd Statistic on the Spike in Chronic Diseases in the US – Glenn Kessler, Washington Post