President Donald Trump said he won’t back down on major tariffs against U.S. trading partners around the world, even as stocks ended lower on Thursday and Americans worry about a potential recession.
“We’ve been ripped off for years, and we’re not going to be ripped off anymore. No, I’m not going to bend at all,” said Trump, who earlier this week backed off on a threat to double levies on Canada following a dispute with the Ontario premier.
Trump also took aim at the European Union, calling it a “hostile and abusive taxing and tariffing authority” and threatening a 200% tariff on alcohol from EU nations.
The back-and-forth has sparked uncertainty that has driven U.S. stocks lower and fueled fears of a recession. J.P. Morgan’s chief economist said Wednesday that there is a 40% chance of a U.S. recession in 2025.
Stocks were down again Thursday, as the S&P 500 fell into correction territory − at least 10% below a record high − a week after the Nasdaq did the same. Both indexes and the Dow Jones dropped by at least 1.3%.
Still, the risk of a painful government shutdown lessened on Thursday after Senate minority leader Chuck Schumer said he would vote for a GOP-backed spending plan. Democrats could still turn their back on the agreement, but it marked a step toward keeping the government’s doors open.
Current funding expires on Friday night. A shutdown would be triggered if a funding bill is not passed and signed by Trump by 11:59 p.m. ET Friday night, though the chances of that happening diminished considerably Thursday evening after Schumer said he would vote for the Republican-led measure.
A shutdown would mean the furlough of thousands of federal workers and a reduction of federal services.
Workers identified as essential continue to work, but might not be paid right away. On the other hand, nonessential workers are furloughed and are not allowed to work or to be paid until the government reopens.
National parks, monuments and other sites will close to the public, with rangers furloughed and facilities shut down. Some states may temporarily fund park operations, as seen during the 2018-2019 shutdown.
− Fernando Cervantes Jr.
Schumer and his fellow Democrats are being forced to choose between two options they despise: Accept a federal funding extension that empowers Trump or risk being blamed for shutting down the government and losing further control over federal agencies.
House Republicans passed a bill to keep the government’s doors open earlier this week and promptly left town, leaving the Senate to accept it or send critical programs into a shutdown. Funding expires at the end of the day Friday.
Republicans, who control the Senate 53-47, will likely need eight Democrats to join them in advancing the bill to overcome the filibuster’s 60-vote threshold. Sen. Rand Paul, R-Ky., has said he will vote against it.
Democrats are pushing instead for a shorter 28-day funding extension they say will allow them time to broker a bipartisan deal, which Republicans say they won’t accept. It’s unclear whether enough Democrats will vote with the Republicans to avoid a shutdown.
– Riley Beggin
Eight economists who serve on the Business Cycle Dating Committee, within a nonprofit research organization not affiliated with the federal government known as the National Bureau of Economic Research (NBER), make the call of when a country’s economy has gone into a recession.
They are appointed by the NBER president, James Poterba, who has held the position since 2008, after consultation with committee chairs and the nonprofit’s board of directors.
The committee has maintained a chronology of U.S. business cycles since its creation in 1978. Without an alternate chronology compiled or published by the U.S. government, the committee became the go-to source for formally identifying recessions.
− Rachel Barber
One of the reasons Trump has cited for imposing tariffs on Canada appears to be slowing.
The number of migrants apprehended after entering the U.S. from Canada fell in February to the lowest point since 2022, according to U.S. Customs and Border Protection data published Thursday.
Apprehensions near the countries’ border declined to 481 people in February, nearly 22% less than the 616 in January. That’s still only about one-sixth of the 3,601 caught in June, a multi-year high.
Under pressure to harden its border since Trump cited migrants and the flow of fentanyl as justification for the tariffs, Canada has tried to crack down on visa issuances, but otherwise it has little authority over people trying to cross into the U.S.
A group of labor unions is suing the Trump administration for ending a collective bargaining agreement signed in 2024 under former President Joe Biden.
The action comes just under a week after the Department of Homeland Security’s decision March 7 to end collective bargaining for employees of the Transportation Safety Administration, saying the union was creating “bureaucratic hurdles.”
In the suit, filed in Seattle, the American Federation of Government Employees and others allege the Trump administration rescinded the contract illegally and in retaliation for the union’s activity suing the Trump administration over its workforce crackdowns. The unions asked the court to void the contract termination.
The DHS has criticized the number of union employees doing administrative work, citing airports that operate with fewer security personnel than the total number of union administrators at the TSA.
– Erin Mansfield
A California federal judge on Thursday ordered six federal agencies to reinstate thousands of recently hired employees who were fired as part of a purge by the Trump administration.
The ruling by U.S. District Judge William Alsup in San Francisco suddenly stands in the way of Trump’s plan to significantly shrink the federal workforce, which has resulted in more than 100,000 layoffs.
The agencies Alsup ordered to bring back the dismissed workers are the Department of Defense, Department of Veterans Affairs, Department of Agriculture, Department of Energy, Department of Interior and the Treasury Department.
Alsup said the federal Office of Personnel Management is not authorized to order firings, and there was evidence it had improperly directed the termination of workers at those agencies. He did not require the 16 other agencies named in the lawsuit by unions and nonprofit groups to reinstate workers. Last month Alsup prevented the OPM from mandating that agencies fire probationary employees, but did not require that dismissed workers be brought back.
“It is a sad day when our government would fire some good employee and say it was based on performance when they know good and well that’s a lie,” Alsup said.
Democratic state attorneys general from 20 states and the District of Columbia filed suit Thursday to block the Trump administration from laying off another 1,300 staffers at the Department of Education. Trump has vowed to eliminate the department, which oversees $1.6 trillion in federal student loans, enforces civil rights laws in schools and provides supplemental funding for districts.
The latest round of cuts would leave the department with 2,183 workers, down from 4,133 when Trump took office in January. Trump has said he wants to give states full control over education.
Protesters from a Jewish organizing group occupied the ground floor of Trump Tower in Manhattan on Thursday over the immigration arrest of Mahmoud Khalil, a Palestinian graduate student and activist at Columbia University.
Led by Jewish organizers, approximately 300 people donning red shirts reading “Not in My Name,” chanted and held banners in support of Khalil in the lobby of Trump Tower, according to spokesperson Sonya Meyerson-Knox. She represents Jewish Voice for Peace, an organizing group critical of Israel and U.S. policies toward the Palestinian territories.
Over the weekend, federal immigration agents detained Khalil, a 30-year-old permanent U.S. resident, as officials said they revoked his status in the country.
Khalil is now in a detention facility in Louisiana as protests against his arrest unfolded around New York City, including a demonstration outside the Manhattan federal courthouse Wednesday during a hearing for Khalil.
– Eduardo Cuevas
What’s the impact of all those staff reductions at the Education Department?
The most affected areas were among the department’s most vital offices, such as branches that disburse federal financial aid, investigate discrimination and conduct research about American students.
That means it may become more difficult to get help paying for college, make sure students with disabilities are fairly treated and keep track of educational progress, an especially important issue in light of learning losses during the pandemic.
“If you get rid of that entire office, where does all of that work go?” said Sheria Smith, a civil rights lawyer recently laid off from the department. “We were already barebones anyway.”
− Zachary Schermele and Javier Zarracina
Treasury Secretary Scott Bessent, asked about Trump’s tariffs and its effects on the economy, sidestepped the issue with reporters at the White House on Thursday morning. Instead, he blamed Democrats for the looming government shutdown.
The House of Representatives has passed, and the Senate must approve by Friday at 11:59 p.m. a bill that would keep the government funded until Sept. 30. A vote on the stopgap funding bill, known as a continuing resolution, will determine whether there’s a shutdown of the federal government after midnight Friday.
“I don’t know what Democrats are thinking here ’cause they’re gonna own it to the extent that it hurts confidence, hurts the American people,” Bessent said. “We have had incredible Republican unity on this since January 20th.”
Bessent said the shutdown would be “the economic story for the next few days, not the tariffs. … If they want to take us into a shutdown, they’re gonna own it.”
Thursday is the deadline for federal agencies and departments to give the Trump administration their plans for large-scale layoffs. The layoffs do not have to occur on Thursday, and there is no specific deadline by which agencies must deliver the news that the jobs will end within 30 or 60 days.
In an effort led by Musk and his Department Of Government Efficiency aides, more than 100,000 federal employees have already lost their jobs in the last two months through layoffs of probationary employees, who are new to government work or recently moved between agencies or accepted a promotion. Another estimated 75,000 federal employees accepted the original buyout offer Trump extended shortly after he took office.
About half of Department of Education employees were laid off Wednesday. Earlier in the week USA TODAY learned that the Department of Veterans Affairs was laying off about 16% of its staff, or 76,000 workers. The National Oceanic and Atmospheric Administration is laying off more than 1,000 people, or about 20% of its staff. Likewise, NASA told employees Monday it would shutter three offices, including the office of the chief scientist.
It remains unclear how many of the about 2 million federal employees spread out across the country could lose their jobs under the new layoff plans, called a “reduction in force,” or RIF. The memo ordering agencies to produce the RIF plans called for “a significant reduction.” Agencies can whittle down personnel through layoffs, attrition, removal of underperforming employees or renegotiation of collective bargaining agreements.
White House press secretary Karoline Leavitt said Thursday that the Trump administration will “communicate directly to the American people” plans submitted by federal departments for large-scale reductions in force – but not until those plans are enacted.
In a statement ahead of Thursday’s deadline for federal departments to finalize the next round of mass layoffs, Leavitt said “each agency will work together to review each agency’s respective Reductions in Force (RIF) plans.”
“Once the plans are enacted, in the continued effort of transparency, the Trump administration will communicate them directly to the American people,” she said. “This incoming mass reduction in the federal workforce will streamline our broken bureaucracy, save taxpayers millions of dollars, and make the government more efficient for all.”
− Joey Garrison
The Trump administration is focused on building an economy that is healthy for the long term and is less interested on the short-term volatility rocking the financial markets, Bessent said Thursday. He dismissed a new flare-up over alcohol as a relatively minor issue.
“We’re focused on the real economy,” Bessent told CNBC. “Can we create an environment where there are long-term gains in the market and long-term gains for the American people?”
The Bureau of Labor Statistics reported Thursday that wholesale inflation was flat in February, below Wall Street expectations.
“Maybe the inflation is getting under control and the market is going to have some confidence in that,” Bessent said.
The EU said Wednesday that it would impose counter tariffs on almost $30 billion worth of U.S. goods starting next month. The EU announcement said the levies would include “products ranging from boats to bourbon to motorbikes.”
The proposal targets items that “include a mixture of industrial and agricultural products,” the announcement says. Industrial products listed include steel and aluminum items, textiles, leather goods, home appliances, house tools, plastics, wood products. Agricultural products include poultry, beef, certain seafood, nuts, eggs, dairy, sugar and vegetables.
Trump blasted the EU in a post on Truth Social on Thursday: “The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky. If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.”
Chris Swonger, head of the Distilled Spirits Council, said the U.S. and EU have had “zero-for-zero” tariffs since 1997. The U.S. spirits sector supports more than $200 billion in economic activity, including 1.7 million jobs across production, distribution, hospitality and retail and the purchase of 2.8 billion pounds of grains from American farmers, Swonger said in a statement.
“We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create U.S. jobs and increase manufacturing and exports for the American hospitality sector,” Swonger said. “We want toasts not tariffs.”
A majority of Americans believe Trump is being too “erratic” in his moves to shake up the U.S. economy, as his imposition of tariffs against some of the nation’s top trading partners hammers stock markets, a new Reuters/Ipsos poll found. Some 57% of respondents, including one in three Republicans, said the president’s policies have been unsteady as his efforts to tax imports have prompted a global trade war, according to the two-day poll that closed Wednesday.
Americans instead want Trump to continue to focus on combating high prices even as there are growing concerns his policies will drive costs up, not down, the poll found.
Canadian Finance Minister Dominic LeBlanc, Ambassador to the U.S. Kirsten Hillman and Ontario Premier Doug Ford are in Washington on Thursday to meet with Lutnick, and LeBlanc says the goal for the meeting is to get a sense of the Trump administration’s long-term plans for tariffs.
“The conversation tomorrow will be around lowering the temperature,” LeBlanc said Wednesday.
He said Canada is ready to review the United States-Mexico-Canada Agreement, which outlines trade among the nations. Earlier this week, tensions were heightened when Trump threatened to double the tariffs on Canada. He shelved the idea after Ford agreed to drop a proposed a surcharge on electricity that Ontario sells to three U.S. states.
“We’ve always said the best approach is a coherent conversation that looks at all of these issues, where the three economies are part of the conversation, and where we can arrive at the best agreement for North America,” LeBlanc said.
Trump’s tariffs may be a concern for the economies of Canada and Mexico, but the levies are pure gold for political leaders in those nations − even as Trump’s own approval ratings have slipped among Americans. Trump’s steep tariffs and his vision of swallowing up Canada as the “51st state” have fueled strong support for leaders in Mexico and Canada.
Mexico President Claudia Sheinbaum’s approval ratings recently reached 85%, the highest of any Mexican president in the last three decades, according to a poll from El Financiero. In Canada, the ruling Liberal Party hadn’t led in national polls since February 2021. Now, according to a recent Ipsos survey, it leads the opposition Conservatives, 38% to 36%.
“The Americans – they should make no mistake,” said Mark Carney, who will be sworn in Thursday as Canada’s prime minister. “In trade, as in hockey, Canada will win.”
− Cybele Mayes-Osterman
Trump has long talked about tariffs as a tool to raise revenue and offset costs associated with proposed tax cuts, going so far as to float the idea of replacing income tax with tariffs. Trump’s tariffs on Canada, Mexico and China are expected to cost the typical U.S. household more than $1,200 per year, according to the Peterson Institute for International Economics, a nonpartisan think tank.
The money from tariffs, paid by American companies, goes to the U.S. Department of Treasury and enters the general affairs budget, said Felix Tintelnot, an associate professor of economics at Duke University in North Carolina. From there, it can be used “essentially for anything.”
Trump won’t say whether he thinks his sweeping tariff plan could help push the country into a recession. But the threat of tariffs and the already-rising costs of everyday items are raising concerns about where the economy is headed. A recession could happen if more people are out of work, large companies see lower profits, the stock market slips and home prices tumble, according to the International Monetary Fund.
Generally, a recession is marked by an extended period of many months or more of economic downturn. And even when a recession is acknowledged by experts and officials, not everyone agrees on when it started or when it ends.
− Damon C. Williams, Zachary Schermele
Tariffs can apply to exports but are are primarily levied on imports, typically to protect industries in the country levying them. Tariffs make imports more expensive, thus making local goods cheaper by comparison. Tariffs also can provide income that can be used to support local industries, fund public programs or cover government expenditures. And they can serve as bargaining tools to win concessions from trading partners.
“While tariffs may seem to penalize foreign producers by making their goods or services less competitive, the reality is that U.S. consumers and businesses ultimately bear the cost,” the Wilson Center scholars Diego Marroquín Bitar and Valeria Moy write in a “Tariffs 101” analysis.
Contributing: Francesca Chambers, USA TODAY; Reuters
