Washington Edition
Some countries get negotiations, some letters
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by Akayla Gardner

This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Every Friday, White House correspondent Akayla Gardner delivers a roundup of the key news and events in politics, policy and economics that you need to know. Sign up here and follow us at @bpolitics. Email our editors here.

Giving Notice

President Donald Trump’s last few days were spent making deals on everything from semiconductors to commercial airliners in the Middle East, along with driving into the region’s complicated — and shifting — politics.

For the president, it’s all interconnected. “I’m using trade to settle scores, and to make peace,” Trump told Fox News, responding to a question about negotiating with Iran on its nuclear program.

His response highlights just how much Trump views trade as essential to his broader agenda, foreign and domestic. And tariffs are his favorite tool for the job.

Trump boards Air Force One as leaves United Arab Emirates. Photographer: Win McNamee/Getty Images Europe

While Trump once touted the prospect of lining up US trading partners to negotiate on the tariffs he imposed on April 2, then paused for three months, he’s giving his team a new task: setting tariff rates and informing other countries by letter what “they’ll be paying to do business in the United States.” 

That’s going to be happening over the next two to three weeks.

There could still be an appeal process, Trump said, without elaborating. And there still may be negotiations with select trading partners. Still it raises doubts about whether all this can be settled by the time the 90-day pause runs out in July.

“One-hundred-fifty countries want to make a deal,” he said today before leaving the United Arab Emirates. “But it’s not possible to meet the number of people that want to see us.” 

There’s some building domestic pressure for an end to what’s been a tariff roller coaster. American consumers have mostly been shielded from much tariff pain so far as businesses absorbed most of the hit from the duties that took effect last month. But the worry is there. The University of Michigan’s consumer sentiment index fell to its second-lowest level on record. And Walmart, the world’s largest retailer, warned this week that tariff-related price increases are coming

Trump has given the job of detailing US trade conditions to other countries to Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent. 

So far, there have been agreements announced with China and the UK, though they are only broad frameworks with major details still to be worked out. National Economic Council Director Kevin Hassett teased earlier this week that the president was likely to announce a new trade pact upon his return to Washington. 

That would make three down and 147 to go. 

Other developments this week:

  • Chip concerns: The semiconductor deals for artificial intelligence projects that Trump struck while in the Middle East have some China hawks in his administration raising concerns that they put US national security and economic interests at risk, Bloomberg’s Mackenzie Hawkins and Jenny Leonard reported. As a result, some senior officials are seeking to slow down those deals over worries that the US hasn’t imposed sufficient guardrails to prevent American chips shipped to the Gulf from ultimately benefiting China, which has deep ties in the region, according to people familiar with the matter.
  • Birthright challenge: Supreme Court justices signaled they are wary of letting Trump limit birthright citizenship by executive order as they heard oral arguments for the first time on one of the president’s initiatives to overhaul the government, my colleague Greg Stohr reported. But the justices also suggested they want to limit the ability of federal judges to issue nationwide injunctions, the question at issue in the case. Trump administration lawyers argued the three federal judges who have blocked Trump’s order on birthright citizenship should have limited their orders to the parties involved in the lawsuits challenging it.
  • Syria breakthrough: Trump’s meeting with new Syrian leader Ahmed Al-Sharaa in Saudi Arabia this week may be one of the most significant outcomes of his trip to the Middle East. The US president said he’s ready to ease sanctions while saying Sharaa also must take actions, including getting rid of foreign fighters in Syria and agreeing to ties with Israel. Making good on those promises, though, presents a thorny challenge for Trump, Bloomberg’s Sam Dagher reported. Syria, which is technically still at war with Israel, has been under myriad US sanctions since its 1979 designation by Washington as a state sponsor of terrorism.

Don’t Miss

The Supreme Court extended an order blocking the Trump administration from using a wartime law to send a group of Venezuelans to a notorious Salvadoran prison.

House Republicans’ massive tax-and-spending bill was blocked in the Budget Committee after hardline conservatives bucked Trump and voted against it over cost concerns.

House Speaker Mike Johnson. Photographer: Kevin Dietsch/Getty Images North America

Two New York Republicans signaled that the cap on the SALT deduction may rise to as much as $80,000 as GOP lawmakers from high-tax states demand a boost in exchange for their votes on Trump’s tax package.

Trump has put his plan to create a sovereign wealth fund on the back burner after three months of administration deliberations failed to offer the broad investment flexibility he seeks.

The president said Iran will face “something bad” if it doesn’t quickly accept his proposal on its nuclear program, while officials in Tehran called the the US message “confusing and contradictory.”

Attorneys for Trump’s World Liberty Financial crypto project pushed back against claims about potential conflicts of interest raised by the Democratic head of a Senate investigative subcommittee. 

Trump again accused South Africa of perpetrating a genocide against White people — without evidence — just days before he is set to receive the country’s leader, Cyril Ramaphosa, in the White House.

The former US ambassador to Ukraine said she resigned in protest over Trump’s handling of the conflict with Russia and that she could no longer stand by while he pressured the government in Kyiv.

The Justice Department is considering an agreement that would allow Boeing to avoid prosecution for its role in two fatal 737 Max crashes, lawyers representing the family members of victims said.

Housing starts in the US increased in April as a pickup in multifamily home construction more than offset a decline in single-family dwellings caused by elevated inventory.

The Federal Reserve plans to shrink its system-wide workforce by about 10% over the next couple of years, mainly through attrition and offering some employees voluntary deferred resignation.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Republican Representative Nick LaLota of New York about how GOP House members can reconcile their differences on their sweeping tax and spending package after it was blocked in the Budget Committee.

On the program at 5 p.m., they talk with Illinois Democratic Representative Raja Krishnamoorthi about the GOP tax-cut legislation and talks between Russia and Ukraine.

On the Big Take podcast, Bloomberg’s Joumanna Bercetche joins host David Gura to discuss the biggest stories from the president’s tour of the Persian Gulf and what the trip tells us about his larger plans for the region. Listen on iHeart, Apple Podcasts and Spotify.

Chart of the Day

Just 21.7% of consumers surveyed by the University of Michigan expect that their family income will beat inflation over the next five years. That's the lowest share on record. The sharp drop suggests that the vast majority of households are resigned to seeing their stand of living getting worse in the near term. Overall, the data shows extremely low confidence that inflation is contained, and the elevated inflationary angst is weighing down consumer sentiment. Respondents to the University of Michigan poll expect annual inflation of 7.3% over the next year, more than twice as high as the 3.1% seen in the Philadelphia Fed Survey of Professional Forecasters. — Alex Tanzi 

What’s Next

Existing home sales in April will be reported next Thursday.

April new home sales will be reported next Friday.

The Memorial Day holiday in the US is May 26.

The Conference Board’s index of consumer confidence will be released May 27.

Capital goods orders in April will be reported May 27.

The March S&P CoreLogic Case-Shiller composite price index for single-family homes will be released May 27.

Minutes of the Federal Reserve’s May meeting will be released May 28.

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