Economists say Trump tariff threats, DOGE job cuts are ‘chilling’ the economy
(KLH49/Getty Images)
(WASHINGTON) — Economists say the uncertainty from President Donald Trump’s tariff threats and mass layoffs of government workers are starting to have a “chilling” effect on the U.S. economy.
“It’s a very difficult business environment, because they can’t plan for what their cost structure is going to be,” said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security. “It’s adding to investment uncertainty, and some people are holding back on investments.”
Trump has so far imposed 10% tariffs on Chinese imports and says he’ll impose additional 10%, plus 25% tariffs on Canada and Mexico on March 4. Trump also says he will impose “reciprocal tariffs” that match the duties other countries levy on the U.S. That comes on top of tariff plans on cars, semiconductors, steel and aluminum. Even if Trump doesn’t ultimately move forward with all his tariff threats, the mere uncertainty has a chilling effect.
“If one of the inputs of your factory goes up by 25%, you might cut your production and say maybe we’ll have to fire some people,” Ziemba added.
Meanwhile, the Department of Government Efficiency’s slashing of the federal workforce across the country “also impacts consumption, because people are losing their jobs or are afraid of losing their jobs, so that might cause them to save more money,“ Ziemba said.
This week, The Conference Board’s consumer sentiment survey found that it registered the largest monthly decline since August 2021.
“Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a 10-month high,” said Stephanie Guichard, senior economist for global indicators at The Conference Board.
“Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs,” Guichard said.
The Canada and Mexico tariffs would have a sweeping effect, since those are America’s two biggest trading partners. It could raise prices at the grocery store and the gas pump. Ziemba also noted that the cost of cars could increase by several thousand dollars.
“Every time a car part crosses the border, 25% tariffs could be very onerous,” Ziemba said. “We could see the cost of building a house go up quite substantially.”
(WASHINGTON) — As Kash Patel, President Donald Trump’s pick to lead the FBI, appears Thursday for his Senate confirmation hearing, some of the rhetoric he has espoused for years to defend Trump and promote Trump’s reelection is sure to elicit sharp questions about whether he is fit to lead one of the nation’s premiere law enforcement agencies.
Patel has derided the FBI as the “Federal Bureau of Insanity.” He’s announced “a mission to annihilate the ‘Deep State'” — what he calls a “cabal of unelected tyrants” inside government, undermining Trump. He’s said the conspiracy theory QAnon, claiming a secret global plot to traffic children and take down Trump, is right in many ways and “should get credit for all the things” it has accomplished. And he once promised to “come after” and prosecute “the conspirators not just in government, but in the media” who “helped Joe Biden rig the presidential election.”
On a podcast two years ago, Trump adviser Roger Stone told Patel his critics are right about one thing: “You are a Trump loyalist.”
Patel chuckled and nodded affirmatively.
But that’s just what Democrats — and even some Republicans — on the Senate Judiciary Committee may wonder about most: If confirmed, is Patel so loyal to Trump that he would use the FBI to push Trump’s political agenda and target Trump’s perceived enemies?
‘An existential threat’
According to Patel, the FBI has already become a political weapon — especially with its multiple investigations of Trump, including the unprecedented search of Trump’s Mar-a-Lago estate in 2022 — and that’s what he wants to change.
“The rot at the core of the FBI isn’t just scandalous, it’s an existential threat to our republican form of government,” Patel wrote in his book, published two years ago, titled “Government Gangsters.”
Trump, on social media, called Patel’s book “the roadmap to end the Deep State’s reign” when it came out.
Many of Trump’s allies in Congress have lauded Patel’s nomination, touting him as the change agent needed at the top of an embattled agency. Judiciary Chairman Chuck Grassley, R-Iowa, has called Patel’s career “a study in fighting for unpopular but righteous causes, exposing corruption, and putting America First.”
Democrats, however, not only point to what they see as Patel’s concerning rhetoric — but also what they’ve described as his relative lack of experience for such a significant position.
After meeting with Patel last week, the top Democrat on the Judiciary Committee, Sen. Dick Durbin, D-Ill., said he has “grave concerns” about Patel’s nomination, declaring, “Mr. Patel has neither the experience, the temperament, nor the judgment to lead the Federal Bureau of Investigation.”
‘I just got to my breaking point’
Now in his mid-40s, Patel grew up on New York’s Long Island, ultimately deciding to attend law school after caddying for a group of criminal defense attorneys at the Garden City County Club. By his own account, in 2005, he graduated from Pace University Law school in the bottom third of his class — something he was “very proud of,” he once joked.
After law school, he spent nine years as a public defender, and in late 2013 he moved to Washington, D.C., to join the Justice Department’s National Security Division as a terrorism prosecutor, helping U.S. attorneys’ offices around the country prosecute their cases.
He was involved in Justice Department cases all over the world, including ones stemming from the 2012 attack on the U.S. mission in Benghazi and the 2010 World Cup bombings in Uganda.
But in his book and in media interviews, he said he grew frustrated with his time at the Justice Department, especially after a dust-up with a federal judge that made national headlines.
In early 2016, while Patel was in Tajikistan for work, the judge presiding over one of his cases in Texas called for an in-person hearing back in the United States. Patel didn’t have a suit or tie with him in Tajikistan, and after racing halfway around the world to make the hearing, the judge badgered him to “dress like a lawyer” and “act like a lawyer,” according to a transcript of the exchange.
“You don’t add a bit of value, do you?” the judge added.
As Patel recounted in his book, his bosses at the Justice Department privately expressed support for him, but when the Washington Post wrote a story about it two weeks later, the Justice Department, in Patel’s telling, refused to defend him publicly, so the newspaper “dragged my name through the mud.”
Patel has also described how he grew upset over the Justice Department’s handling of the Benghazi case following the 2012 attack by Islamic militants, believing that “terrorists went free” despite his disputed assertion that the Obama administration had enough evidence to charge even more people for the attack.
“I just got to my breaking point,” Patel once recalled. So in 2017, he left the Justice Department to become a senior investigator on Capitol Hill, where he helped lead the House Republicans’ probe of “Russiagate” — which, as he describes it, exposed FBI wrongdoing in its 2016 investigation of alleged ties between Trump’s presidential campaign and Russia.
‘Not a credible witness’
Patel’s work on the Russia probe led to him joining the Trump administration in 2019, and in the final year of Trump’s presidency he was appointed acting deputy director of national intelligence — the second-in-command of the entire U.S. intelligence community — and then chief of staff to the acting U.S. defense secretary, a position that critics claimed he was unqualified to hold even for just the 10 weeks he was there.
After Trump’s first administration ended, Patel regularly appeared on conservative media outlets, frequently praising Trump and criticizing the Justice Department for investigating and then prosecuting Trump for his alleged mishandling of classified documents after leaving office and his alleged efforts to overturn the 2020 presidential election.
Patel has claimed — despite the Justice Department’s inspector general finding otherwise — that the FBI played a part in pushing pro-Trump protesters to attack the U.S. Capitol on Jan. 6, 2021. And he has claimed in media interviews and court testimony that Washington, D.C., Mayor Muriel Bowser and then-House Speaker Nancy Pelosi deserve blame for the attack — not Trump — because, Patel insists, Trump days earlier had authorized up to 20,000 National Guard to secure the Capitol.
The judge who listened to his court testimony in a case about Trump’s eligibility to be on Colorado’s ballot in the November election ruled that Patel “was not a credible witness,” saying his testimony was “not only illogical” but “completely devoid of any evidence in the record.”
After Trump left office, Patel launched a tax-exempt charity, now known as the Kash Foundation, which made national headlines in 2023 with revelations that it provided thousands of dollars to at least two so-called “FBI whistleblowers” who helped House Republicans push disputed claims of corruption inside the Justice Department.
Patel has said his charity helps fund defamation lawsuits, supports whistleblowers, buys meals for families in need over Christmas, supports Jan. 6 families, and more recently funds “rescue operations” out of Israel.
But he has refused to offer specifics about who is benefiting from his charity, and, as ABC News previously reported, experts have questioned whether it was following the law. At the time, Patel declined to speak with ABC News about its reporting.
After Trump announced his latest presidential campaign, Patel traveled the country to promote Trump’s reelection, saying that Trump would fire “thousands and thousands and thousands” of government employees to root out the “Deep State.”
Three weeks after Trump was reelected president, he named Patel as his pick to lead the FBI.
(WASHINGTON) — Ahead of Linda McMahon’s hearing to become the next secretary of the Department of Education, America’s state teachers of the year for 2024 have said they worry the future of public education is under direct attack.
De’Shawn C. Washington, the 2024 Massachusetts teacher of the year, said he will be heartbroken if the Department of Education is dismantled under McMahon.
“This is a great opportunity to invest even more in our children right now, instead of retracting,” Washington told ABC News. “To pull further in, to watch those seeds grow and become a harvest, so that our country could thrive.”
President Donald Trump is preparing an executive order to abolish the Department of Education. The order, which has not been signed yet, reportedly calls for the education secretary to submit a proposal to diminish the department and urges Congress to pass legislation to get rid of it.
McMahon has vowed to carry out the president’s policies, and her allies have said they believe she has the business acumen to make budget cuts as she sees fit.
The looming department changes could be devastating for vulnerable students, according to Jeff Keller of Virginia. Keller warned shuttering the federal agency could mean students will have less protections and schools will have less oversight.
“When I think about what the Department of Education means, it means safeguarding kids’ civil rights,” Keller told ABC News.
“Whether that’s students with disabilities having the ability to get into the building and to get around the building … whether that’s safeguarding, you know, racial minorities to make sure that educational outcomes are equitable for them — I mean, I think it’s across the board,” Keller said.
Colorado’s Jessica May said she fears her students’ basic needs won’t be met if the department is abolished.
“What I am most afraid of is they are not going to get the attention and the care and the dedication that they need to survive, to live,” May said.
However, abolishing the Department of Education can only be done if Congress passes legislation to eliminate it. Clare McCann at American University said it is illegal to “uncreate” the department without congressional authorization — and it would require 60 votes in favor of the legislation in the Senate to pass.
Still, these teachers, who were all awarded their states’ top teaching honors in 2024, said they’re a nervous group right now.
Zach Arenz, the New York teacher of the year, predicted lost educators, increased class sizes and a widening achievement gap in which wealthy communities get wealthier through school voucher programs.
“All of these things are going to lead to a weak public education system,” he told ABC News. “If our public education system isn’t successful, there is no future.”
Arenz said he hopes teachers are listened to moving forward. Kentucky’s Kevin Dailey said he is also worried about student opportunities, arguing a conservative school voucher push would privatize the public school system and enrich private businesses.
“Kentucky schools receive over $1 billion a year in federal funds [from the Department of Education] in order to facilitate the growth of our communities,” Dailey told ABC News. “Kentuckians, not just teachers, not just public school students, but Kentuckians believe in strong public schools.”
McMahon is ‘in over her head’
McMahon, the president’s pick to carry out his vision for injecting school choice throughout the nation’s schools, will go before lawmakers on Capitol Hill on Thursday. Her nomination to become the next secretary of the Department of Education has been loathed by many top educators.
“She’s well in over her head,” Greg Kester, the 2024 Missouri teacher of the year, told ABC News. Kester has been teaching over 30 years and said McMahon is a step down from billionaire Betsy DeVos, Trump’s first education chief, arguing education isn’t McMahon’s “calling.”
However, McMahon earned a teaching certification from East Carolina University before pivoting to the wrestling arena. McMahon spent most of her career as a business executive and wrestling mogul, and the president has praised her for her knowledge of both business and education.
But Indiana’s Eric Jenkins told ABC News there’s a distinct difference between the two fields.
“There are similarities between business and education, but the core difference — the purpose,” Jenkins said. “So the purpose of a business is to increase profits. The purpose of education is to increase opportunity for all students.”
Elon Musk’s Department of Government Efficiency made sizable cuts to the Department of Education this week, slashing critical independent research contracts at the department’s Institute of Education Sciences worth nearly $900 million. Jenkins said he embraces a department that works to create efficiency — so long as the budget cuts don’t hamstring students.
“What brings us together, these different state teachers, regardless if they’re blue or red, is that we see those numbers actually as our students’ faces,” Jenkins said. “I think that’s where we’re coming from, is that we truly see the faces and the impacts that cuts are going to make.”
Conservatives such as Rep. Burgess Owens, R-Utah, said McMahon has the business mindset to create innovative solutions for all students.
However, Virginia’s Keller said he disagrees, noting the nation’s next education chief should run the country’s public school system like it’s the “backbone” of society, not a corporation.
“I don’t think you got to be a K-12 teacher, but I do think you have to have a mindset that understands schools don’t exist for the benefits of teachers or the benefit of students: They exist for the benefit of society,” Keller said. “It’s not a business. We’re not in business. That’s not what schools are.”
(WASHINGTON) — The United States used manned fighter jets to conduct an airstrike against Islamic State targets in Somalia on Saturday, three U.S. officials told ABC News on Saturday.
President Donald Trump and Defense Secretary Pete Hegseth confirmed the airstrike, claiming no civilians were harmed in the attack. No details were released about the targets aside from the president labeling the target as a “Senior ISIS Attack Planner.”
Hegseth said the airstrikes were carried out “at President Trump’s direction and in coordination with the Federal Government of Somalia.”
Notably, the strikes were not drone strikes but were carried out by fighter aircraft from the aircraft carrier USS Harry S. Truman, which is currently in the Red Sea, as well as Air Force fighter aircraft, U.S. officials told ABC News.
And unlike other airstrikes, these attacks were offensive airstrikes against ISIS, not the defensive drones strikes, such as what U.S. forces have done against al Shabaab when they’re called in to support Somali troops who are being attacked by the militant group.
“This action further degrades ISIS’s ability to plot and conduct terrorist attacks threatening U.S. citizens, our partners, and innocent civilians and sends a clear signal that the United States always stands ready to find and eliminate terrorists who threaten the United States and our allies, even as we conduct robust border-protection and many other operations under President Trump’s leadership,” Hegseth added.
