God morgen and welcome to White House Watch! Our world leader of the day is Norwegian Prime Minister Jonas Gahr Støre, who is slated to meet Donald Trump in the Oval Office to talk Nato, the war in Ukraine and trade. For now let’s jump into:

• Turmoil at the top

• Lobbyists’ Trump bump

• A roundtable with Scott Bessent

A couple of Trump’s top lieutenants are in hot water. 

This week we’ve learnt that Elon Musk’s political stock might be overvalued, while Pete Hegseth fends off more Signal group chat drama.

After Trump’s win in November, the Tesla CEO’s electoral experiment looked like one of the savviest investments of his career. The hope was that his influence in Trump’s orbit would supercharge his businesses. But, by Musk’s own admission, his position in the White House has brought damaging “blowback” for his electric-car maker.

“It went from a Cinderella story to [A] Nightmare on Elm Street,” Dan Ives, a Wedbush Securities analyst who had initially cheered Musk’s closeness to Trump, told the FT’s Joe Miller, Kana Inagaki and Rafe Uddin. Musk’s increasingly controversial role heading the so-called Department of Government Efficiency (Doge) had caused “massive brand damage”, Ives added. 

As Tesla reported a 70 per cent drop in first-quarter profits, Musk announced he would step back from Doge next month.

Over at the Pentagon, Trump’s defence secretary is under siege after revelations that he discussed sensitive military information with family members in a Signal chat — just weeks after Hegseth and others spoke about the same operation in a separate group on the commercial messaging app.

The Pentagon’s leadership is also in disarray after Hegseth purged some of his top aides following an internal leak investigation. Former Pentagon spokesperson John Ullyot wrote in a searing Politico op-ed that “the last month has been a full-blown meltdown at the Pentagon”.

Trump, so far, has defended Hegseth, but if the US defence secretary is later forced out, it would be an embarrassment for the president and a waste of political capital after the immense effort it took to get the former Fox News host’s confirmation over the line. It would also kick off a tough search for a replacement.

If Hegseth keeps his post, the Pentagon risks being left adrift as Trump tries to implement an ambitious foreign and defence policy.

“[Hegseth’s] lack of experience is a huge demerit,” Benjamin Friedman, policy director at Defense Priorities, a think-tank that advocates for a less interventionist US foreign policy, told the FT’s James Politi.

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• Meet Brian Ballard, one of the top lobbyists in Trump’s Washington. His firm is on track to more than double its 2024 revenue this year. [Free to read]

• It’s earnings season and corporate America is putting Wall Street on alert over the impact of Trump’s tariffs on their companies and the US economy.

• There’s a growing cohort of Maga Catholics who hope that Pope Francis’s death will shift the faith away from reformism, towards more traditional Christian values and a new “Trump-like pope”.

• The White House plans to spare carmakers from some of its toughest tariffs after intense lobbying and crunch talks with industry executives.

• Trump keeps attacking Ukrainian President Volodymyr Zelenskyy, this time for refusing to recognise Russia’s occupation of Crimea.

With global economic leaders in Washington for the IMF and World Bank meetings, one thing is top of mind: what will happen with Trump’s massive tariffs on Chinese goods, which have rattled markets.

FT’s Washington bureau chief James Politi was at a roundtable with Scott Bessent yesterday, where the Treasury secretary exercised caution on any quick breakthrough.

“There would have to be a de-escalation by both sides,” Bessent said, denying that Trump would unilaterally lower tariffs to calm investors or appease Beijing. While he acknowledged that the current tariff levels were in nobody’s interest right now, he gave no timeline for a cessation of trade hostilities. 

Bessent also touched on another hot economic topic that’s got markets worried: whether Trump could move to fire Federal Reserve chair Jay Powell. 

Bessent said he was “not a lawyer” and could not say if the president has the authority to sack the Fed chair. But he said that Trump’s comments last week that Powell’s “termination” could not come soon enough had been misconstrued, and that Trump meant he was looking forward to the end of the Fed chair’s term next year. 

Trump has hit out at Powell for “making a mistake” by not cutting interest rates, but denied he would fire the Fed chair. 

Yesterday, Trump said he “might call him”. Presidents occasionally speak to Fed chairs, but usually refrain from doing so while publicly campaigning for the central bank to take certain actions on interest rates. 

Powell “was recommended by a certain person that I’m not particularly happy with”, Trump added, though he didn’t specify who he’s blaming for the central bank’s leadership.

• Rebecca Kelly Slaughter and Alvaro Bedoya, ex-Federal Trade Commissioners fired by Trump, argue their removal is “a terrifying warning sign for the future of the American economy”. 

• Robert O’Brien, Trump’s final first-term national security adviser, praised his former boss’s shipbuilding executive order as economically and militarily smart.

• Trump inherited a weakened hand in the game of global trade poker — and he’s playing it very badly, writes Alan Beattie.

• The FT editorial board lays out Trump’s “art of the retreat” as the president U-turns on Powell and Bessent says the trade war with China isn’t sustainable.