Trump Slaps 25% Tariff on All Auto Imports

Tulsi Gabbard and other intelligence officials testified in the House.
(Sipa USA)
By Yuval Rosenberg and Michael Rainey

We're only halfway through the week, but it's shaping up to be a newsy doozy. Here's the latest.

Democrats Fume as Trump Admin Downplays Signal Chat Debacle

The security breach that's been dubbed SignalGate continues to dominate headlines and consume official Washington.

After President Donald Trump and key administration intelligence officials maintained Monday that no classified information was shared in the Signal group chat that accidentally included journalist Jeffrey Goldberg - and after Defense Secretary pugnaciously insisted that he had not shared "war plans" - The Atlantic on Tuesday morning published more messages from the exchange. The texts showed that Defense Secretary Pete Hegseth shared operational plans and some details on the commercial app, including the types of aircraft involved and the timing of strikes against the Houthis in Yemen.

Democratic lawmakers used those fresh details to again tear into Trump officials including Tulsi Gabbard, the director of national intelligence, and CIA Director John Ratcliffe, who were testifying on Capitol Hill for a second straight day, this time in a testy hearing before the House Intelligence Committee after a similar session on the Senate side yesterday.

Gabbard acknowledged that having a reporter included in the group chat was a "mistake" and added that National Security Adviser Mike Waltz has taken responsibility and that a review is being conducted. But she again said that the information shared wasn't classified. "The conversation was candid and sensitive, but as the president and national security advisor stated, no classified information was shared," Gabbard said. "There were no sources, methods, locations or war plans that were shared."

Democrats were incredulous. "The idea that this information, if it was presented to our committee, would not be classified, you all know, is a lie," Democratic Rep. Joaquin Castro of Texas said to the Trump officials. And Rep. Raja Krishnamoorthi of Illinois insisted that, despite the claims of administration officials, the messages included information that clearly was classified. "Secretary Hegseth has disclosed military plans as well as classified information," he said. "He needs to resign immediately."

Other Democrats also called for the resignations of Hegseth, Waltz and other officials involved in the chat.

In a social media post and in remarks to reporters, Hegseth remained defiant. "So, let's me get this straight," he wrote. "The Atlantic released the so-called 'war plans' and those 'plans' include: No names. No targets. No locations. No units. No routes. No sources. No methods. And no classified information. Those are some really shitty war plans."

Hegseth, the White House and other administration officials also attacked Goldberg, adopting an aggressive if disjointed messaging strategy. "We are not going to bend in the face of this insincere outrage," White House Press Secretary Karoline Leavitt said at her press briefing Wednesday afternoon. In a social media post, she wrote: "This entire story was another hoax written by a Trump-hater who is well-known for his sensationalist spin."

The president on Wednesday decried the furor over the chat and the national security concerns it raised in familiar terms, calling it a "witch hunt."

Republicans at Wednesday's hearing often echoed the administration's defenses, but some key lawmakers have scoffed at those efforts to deflect and downplay. "The White House is in denial that this was not classified or sensitive data," Rep. Don Bacon, a former Air Force general, told reporters. "They should just own up to it and preserve credibility."

Republican Sen. Roger Wicker, the chair of the Senate Armed Services Committee, said that he and Sen. Jack Reed, the top Democrat on the committee, are "very concerned" about the use of Signal and have agreed to request an investigation by the Department of Defense Office of Inspector General into the matter. "The information as published recently appears to me to be of such a sensitive nature that, based on my knowledge, I would have wanted it classified," Wicker said.

The bottom line: Despite the Trump administration's efforts, this isn't going away.

Trump Slaps 25% Tariff on All Auto Imports

President Trump announced on Wednesday that he will impose a 25% tariff on foreign-made cars and light trucks starting on April 2, adding to the growing list of enacted or threatened import taxes that have rattled markets and set the stage for an escalating global trade war.

The tariff will also apply to American brands that are assembled outside of the country, including Mexico and Canada. Trump White House aide Will Scharf said the tariff could produce $100 billion in tariff revenue annually, though Trump bumped that number to $600 billion to $1 trillion as he signed the order. The U.S. imported about $220 billion worth of foreign vehicles in 2024, accounting for nearly half of all sales.

Trump said the tariffs are part of his effort to put an end to the "rip off" of foreign trade by sharply reducing imports and thereby boosting domestic production. "We're going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they've been taking over the years," he said. He also described the tariffs as "permanent" and said he is not interested in negotiating exemptions.

Earlier in the day, Trump claimed that his tariffs are already pushing manufacturers to increase their investments in the U.S., citing an announcement earlier this week by Korean auto giant Hyundai that it plans to invest $5.8 billion in a Louisiana steel mill.

Trump has also promised to unveil new "reciprocal" tariffs on trading partners around the world starting on April 2. According to reports, those tariffs will roughly mirror the import taxes, manufacturing subsidies and consumption taxes in place overseas, though Trump said Wednesday that the levies would be more modest than some analysts have assumed.

Automakers not happy: The auto industry has warned that additional tariffs could be severely damaging to their market. Jonathan Smoke, chief economist at Cox Automotive, said Wednesday that new tariffs would be "highly disruptive" in North America, which operates as a unified manufacturing zone, potentially leading to a drop in supply, a jump in prices and a "much weaker economy."

The industry has repeatedly warned that higher tariffs will mean increased prices. An analysis cited by Bloomberg estimates that new tariffs on imports from Canada, Mexico and China will raise the price of popular crossover models by $4,000, while electric vehicle prices could increase by $12,000 per unit.

"Storm clouds are forming on the horizon," Smoke said, per USA Today, adding that problems could emerge within a matter of days as the new tariffs take effect.

US Could Hit Debt Ceiling as Soon as May: CBO

The federal government could run short on funds in August or September if lawmakers fail to raise or suspend the debt ceiling before that time, the Congressional Budget Office warned in a new analysis released Wednesday.

Much depends on the timing and amount of tax payments that come in during tax season, CBO noted, and any revenue shortfalls - which are a growing concern amid dramatic cutbacks at the IRS by the Trump administration - could move the date forward. "If the government's borrowing needs are significantly greater than CBO projects, the Treasury's resources could be exhausted in late May or sometime in June, before tax payments due in mid-June are received or before additional extraordinary measures become available on June 30," CBO said.

The debt limit was suspended under the Fiscal Responsibility Act in June 2023 but was reinstated at a level of $36.1 trillion this past January. The Treasury quickly started relying on "extraordinary measures," such as suspending contributions to certain federal employee retirement funds, to provide enough headroom to make payments. Options for deploying such measures will eventually run out, at which point the government may default.

Experts have warned repeatedly about the extremely negative repercussions of triggering a default, and U.S. debt has been downgraded in the past because lawmakers have failed to address the issue in a timely and civil manner. As CBO noted, a delay in payments for government activities or a default in debt obligations "could result in distress in credit markets, disruptions in economic activity, and rapid increases in borrowing rates for the Treasury." Some economists think a default could trigger an immediate recession, and possibly a global crisis.

What comes next: Republican lawmakers are currently mapping out their strategy for raising the debt ceiling, with the Senate reportedly warming to a House plan to include a $4 trillion debt limit increase in a massive reconciliation package that would also extend the 2017 tax cuts and slash at least $1.5 trillion in spending. There are still serious concerns about such a package. For one thing, some GOP lawmakers may not be willing to vote for an increase in the debt limit, complicating any path to passage. Also, the House plan is expected to require big cuts to Medicaid, which could be a tough sell politically. Tying the debt limit to that package could thus heighten the risk of default.

GOP lawmakers have their work cut out for them as they try to stick to an aggressive schedule that calls for finishing their reconciliation work by the end of May.

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