By LINDSAY WHITEHURST and PAUL WISEMAN Associated Press
Some two dozen states are challenging President Donald Trump's new global tariffs in court. On Thursday, the states filed a lawsuit over import taxes he imposed after a stinging loss at the Supreme Court. Democratic attorneys general leading the suit argue that Trump is overstepping his power with planned 15% tariffs on much of the world. Trump has said the tariffs are essential to address trade deficits. He imposed duties under Section 122 of the Trade Act of 1974 after the Supreme Court struck down tariffs he imposed last year under an emergency powers law. The new suit argues that law was intended to be used only in specific, limited circumstances.
Oil prices jumped Tuesday for the second straight day and gas prices moved higher in the United States, underscoring the threat of rising inflation posed by the Iran war. Coming after nearly five years of elevated costs, even a modest pickup in prices could further sour many Americans on the economy and heighten the affordability concerns that have become a top political issue. A key issue, economists say, is how long the conflict lasts and whether key shipping routes, such a the Strait of Hormuz, at the mouth of the Persian Gulf, are closed. About one-fifth of the world's oil and natural gas is shipped through the Strait.
By CHRISTOPHER RUGABER and PAUL WISEMAN Associated Press Writers
President Donald Trump sought in his first State of the Union address to sell Americans on the idea of a booming economy, falling prices, and soaring jobs, yet he faces a skeptical public with a much gloomier view. Barely 12 hours before his speech, in fact, The Conference Board, a business research group, released its latest consumer confidence report. It showed that overall confidence in the economy remains historically low, and is barely above the level it plunged to in the depths of the COVID recession. Other polling has yielded similar results: Only 39% of Americans approve of Trump's economic leadership, according to the latest Associated Press-NORC Center for Public Affairs Research survey.
Senate Democrats are unveiling a bill to have the government refund about $175 billion in Trump-era tariff money after the Supreme Court ruled that President Donald Trump's emergency tariffs were illegal. The bill from Senators Ron Wyden, Ed Markey, and Jeanne Shaheen would order Customs and Border Protection to issue refunds within 180 days and pay interest. The bill prioritizes small businesses. It also urges big companies to pass refunds along to customers. The Supreme Court announced its 6–3 on Friday, but it gives little guidance on refunds. Trump says refunds could be tied up in courts for years.
By CHRISTOPHER RUGABER and MATT OTT AP Economics Writers
U.S. economic growth slowed in the final three months of last year, dragged down by the six-week shutdown of the federal government and a pullback in consumer spending. The figures point to what could be a more modest pace of growth in the coming quarters, as consumers take on more debt and cut back on saving to maintain their spending. Business investment, outside data centers and other equipment dedicated to artificial intelligence, grew at only a moderate pace. Still, a measure of underlying growth that focuses on consumer and business spending was mostly solid, economists said. The sharp slowdown in government outlays because of the shutdown shaved a full percentage point from growth.
President Donald Trump says he's imposing a temporary global tariff of 10% after his far-reaching tariff regimen was struck down by the Supreme Court. The court handed him a stinging loss on an issue crucial to his economic agenda. Trump says he's "absolutely ashamed" of justices who voted to strike down his tariffs, calling the decision "deeply disappointing." Friday's 6-3 decision centers on tariffs he unilaterally imposed under an emergency powers law, including the sweeping "reciprocal" tariffs levied on nearly every other country. Trump has called the case one of the most important in U.S. history. The new tariffs would come under a law that restricts them to 150 days.
A key measure of inflation fell to nearly a five-year low last month as apartment rental price growth slowed and gas prices fell, offering some relief to Americans still grappling with the sharp increase in costs of the past five years. Friday's report suggests inflation could be cooling, but it comes after the cost of food, gas, and apartment rents have soared since the pandemic, with consumer prices about 25% higher than they were five years ago. The increase in such a broad range of costs has become a high-profile political issue under the rubric of "affordability."
The Federal Reserve pushed the pause button on its interest rate cuts Wednesday, leaving its key rate unchanged at about 3.6% after lowering it three times last year. With the economy growing at a healthy pace and no signs of deterioration in hiring, Fed officials likely see little reason to rush any further rate cuts. While most policymakers do expect to reduce borrowing costs further this year, many want to see evidence that stubbornly-elevated inflation is moving closer to the central bank's target of 2%. According to the Fed's preferred measure, inflation was 2.8% in November, slightly higher than a year ago.
