Unadorned Notes: March 26-30, 2025
Trump Plans Broad Tariff Push; U.S. Upgrades Japan Military Command; Core PCE Inflation Rises; IMF Sees No Recession Amid Trump Tariffs; Homebuyers Return Despite Rates
U.S. Politics, Policies, and Geopolitics
Trump Plans Broad Tariff Push: President Donald Trump has announced April 2 as “Liberation Day”, when he plans to unveil sweeping import tariffs aimed at reducing U.S. reliance on foreign goods. The proposed measures include 25% duties on autos, pharmaceuticals, metals, and imports from countries such as China, Canada, Mexico, and members of the European Union. Economists warn the tariffs will likely raise consumer prices and slow economic growth, with Goldman Sachs forecasting U.S. GDP growth to fall to 0.6% this quarter. Foreign leaders have criticized the tariffs as harmful to global supply chains and warned of retaliatory measures. Trump contends the tariffs will revive domestic manufacturing and increase government revenue, though analysts argue their long-term impact may be inflationary and economically disruptive.1
QZ’s Comment: The one keyword consistently missing from the legacy media on Trump tariffs is “geopolitics”.
India, U.S. Advance Trade Talks: India and the United States held trade negotiations in New Delhi from March 26–29, focusing on reducing tariffs and non-tariff barriers. Talks were led by India’s commerce ministry and Brendan Lynch, assistant U.S. trade representative for South and Central Asia. U.S. Deputy Secretary of State Christopher Landau also met Indian officials to discuss trade, immigration cooperation, and regional security. Both sides aim to finalize the initial phase of a bilateral trade agreement by autumn, targeting $500 billion in trade by 2030. Sector-specific negotiations will continue virtually, followed by in-person discussions amid U.S. pressure for greater market access and tariff reductions.2
Yemen Strike Leak Fallout: The Trump administration is facing political backlash following the release of Signal messages revealing internal deliberations over U.S. airstrikes in Yemen. Defense Secretary Pete Hegseth disclosed operational details hours before the strike, raising security concerns among defense experts. The White House maintains the information was not classified and has focused its response on discrediting The Atlantic, which published additional content from the leak. President Donald Trump offered conflicting statements about the classified nature of the messages and defended both Hegseth and National Security Adviser Michael Waltz. Lawmakers, particularly Democrats, have demanded investigations and accountability, while Republicans have largely downplayed the issue.3
U.S. Upgrades Japan Military Command: U.S. Defense Secretary Pete Hegseth announced in Tokyo that the United States will begin implementing a plan to restructure its military command in Japan to enhance coordination amid rising tensions with China. The upgrade will include appointing a combined operational commander to work alongside Japan’s new joint operations command. Hegseth and Japanese Defence Minister Gen Nakatani also agreed to accelerate joint missile production and explore cooperation on SM-6 missile manufacturing. The U.S. maintains about 50,000 troops in Japan, while Tokyo is significantly increasing defense spending despite constitutional constraints on military action.4
Trump Targets Smithsonian Autonomy: President Donald Trump issued an executive order seeking to reshape the Smithsonian Institution by curbing its independence and emphasizing “patriotic history”. The order criticizes the institution for promoting what it calls divisive ideologies and directs Congress to restrict funding for exhibitions perceived as contrary to American values. Trump also ordered the Department of the Interior to review historical interpretations at national monuments and parks, aiming to highlight national achievements over past injustices. The Smithsonian, a congressionally chartered trust, appeared blindsided by the directive and declined to comment, while historians and cultural leaders warned of political interference in historical scholarship. The order follows Trump’s broader agenda to promote a positive national narrative ahead of the 250th anniversary of U.S. independence in 2026.5
U.S. Revokes Student Visas: Secretary of State Marco Rubio announced that over 300 student visas have been revoked, primarily targeting foreign students linked to pro-Palestinian activism. The State Department is using a Cold War-era provision allowing revocations for activities deemed harmful to U.S. foreign policy interests. Immigration and Customs Enforcement has detained students across the country, drawing criticism from civil liberties groups who warn of threats to free speech. Some students have been deported or are held in detention without clear charges, while others left the country after visa revocation. Critics argue the policy shifts enforcement from targeting criminal activity to punishing political expression.6
FDA Vaccine Chief Resigns: Dr. Peter Marks, head of the FDA’s Center for Biologics Evaluation and Research, has resigned, citing concerns over Health Secretary Robert F. Kennedy Jr.’s alleged promotion of vaccine misinformation. In his resignation letter, Marks accused Kennedy of rejecting scientific transparency and pressuring him to support falsehoods about vaccine safety. Marks, who played a key role in “Operation Warp Speed”, warned that current actions risk undermining public trust in immunization and scientific integrity. His departure follows broader turmoil within the Department of Health and Human Services, including mass layoffs and resignations.7
U.S. Shipbuilding Industry Revitalization Efforts: The Trump administration has initiated a strategy to revitalize America’s shipbuilding industry through an executive order, marking the most significant effort since World War II. This plan aims to increase U.S. maritime capacity, assert strategic control in the Arctic, and enhance security by reducing dependence on Chinese commercial shipping. The proposal combines commercial and military shipbuilding efforts and includes various incentives and sanctions to support the industry. Cooperation with allies, particularly Canada and Finland, is deemed essential for success. However, some experts argue that attempts to revive the U.S. shipbuilding industry are impractical and costly, suggesting a focus on domestic technological investments and resource extraction instead.89
Russia Strikes Kharkiv, Trump Warns: Russian drone attacks struck a military hospital, shopping center, and residential areas in Kharkiv, killing two civilians and injuring dozens, according to Ukrainian officials. Ukraine’s air force reported intercepting 65 of 111 drones launched in the latest overnight assault. Ukrainian authorities believe Russia is preparing a new offensive to gain leverage in ceasefire negotiations, which have stalled amid disagreements over territorial control. President Donald Trump condemned Russian President Vladimir Putin’s remarks questioning Ukrainian President Volodymyr Zelenskyy’s legitimacy and warned of secondary sanctions and tariffs on Russian oil. Despite the criticism, Trump reiterated that he maintains a positive relationship with Putin.10
Economics, Finance, and Business
Core PCE Inflation Rises: The U.S. core personal consumption expenditures (PCE) price index rose 2.8% year-over-year in February 2025, exceeding economists’ expectations and highlighting persistent inflationary pressure. The increase, up from 2.6% in January, suggests continued challenges for the Federal Reserve in achieving its 2% inflation target. The broader PCE, which includes food and energy, remained steady at 2.5%. Economists say the data likely delays any potential interest rate cuts, especially amid uncertainty surrounding new tariffs announced by the Trump administration. Consumer income rose by 0.8% in February, while spending increased by only 0.4%, lifting the savings rate to its highest level since mid-2024.11
Auto Tariffs Cloud Fed Outlook: President Donald Trump’s 25% tariff on imported autos has intensified global trade tensions and raised concerns about inflation without offering clear direction for U.S. economic policy. Federal Reserve officials are maintaining interest rates as they assess the combined effects of tariffs, fiscal policy changes, and regulatory shifts under the Trump administration. While inflation remains above the Fed’s 2% target, policymakers are divided on whether future conditions will warrant rate hikes or cuts. Some, like Minneapolis Fed President Neel Kashkari, advocate patience amid uncertainty, while others remain open to policy adjustments depending on forthcoming economic data. Market expectations still lean toward multiple rate cuts in 2025, though Fed officials remain cautious amid mixed signals from inflation and labor markets.12
IMF Sees No Recession Amid Trump Tariffs: The International Monetary Fund (IMF) is evaluating the economic effects of President Donald Trump’s tariff measures, including newly imposed 25% duties on auto imports. While warning of significant consequences for trading partners like Canada and Mexico, the IMF stated that a U.S. recession is not part of its baseline forecast. The upcoming World Economic Outlook, to be released in April 2025, will incorporate recent policy changes and updated data on growth and inflation. IMF spokesperson Julie Kozack noted that the U.S. economy had been stronger than expected but has shown signs of slowing in early 2025. Persistent inflation remains a global concern, requiring adaptable monetary policy responses to maintain stable expectations.13
Consumer Sentiment Hits Low: U.S. consumer sentiment fell sharply in March 2025, with the University of Michigan’s index dropping to 57—the lowest since 2022 and down from 64.7 in February 2025. Expectations for rising unemployment reached their highest level since 2009, reflecting growing concern about economic uncertainty. Inflation fears intensified, with respondents projecting a 5% rise in prices over the next year, up from earlier forecasts. The Conference Board’s survey similarly showed a steep drop in future expectations, historically associated with recessions. Despite resilient spending and steady unemployment, economists warn that policy uncertainty and weakening job creation may push the economy toward stagnation.14
U.S. Jobless Claims Dip Slightly: U.S. initial jobless claims fell by 1,000 to 224,000 for the week ending March 22, slightly below economists’ expectations. The Labor Department revised claims data from 2020 through 2024 and introduced new seasonal adjustment factors for 2025. Despite reduced federal hiring and significant government layoffs under President Donald Trump’s downsizing initiatives, unemployment claims have not risen sharply nationwide. Continuing claims dropped by 25,000 to 1.856 million, suggesting steady labor market conditions. Economists anticipate the unemployment rate for March 2025 will remain at 4.1% despite weak consumer sentiment.15
U.S. Pending Home Sales Rise: Pending sales of previously owned U.S. homes rose 2.0% in February 2025, according to the National Association of Realtors (NAR), exceeding economists’ expectations of a 1.0% increase. The NAR’s Pending Home Sales Index reached 72.0, though contract activity remained 3.6% lower than the same period last year. Chief economist Lawrence Yun noted that signings continue to lag behind historical norms. The modest rebound was attributed to slightly lower mortgage rates. However, rising economic uncertainty may weigh on future housing market momentum.16
Homebuyers Return Despite Rates: U.S. homebuyers are gradually reentering the housing market despite persistently high mortgage rates and elevated home prices. Real-estate showings and mortgage applications have risen ahead of the spring selling season, reflecting pent-up demand driven by life events such as job changes and family growth. Many buyers have adjusted expectations, no longer waiting for rates to return to pandemic-era lows. The typical monthly mortgage payment recently reached a record $2,807, yet increased housing inventory is offering more choices in some regions. While activity remains below historical norms, sustained improvement could support related sectors and broader economic growth.17
Stocks Slide on Inflation, Tariffs: U.S. equity markets declined sharply last Friday, as hotter-than-expected inflation data, weakening consumer sentiment, and new tariff announcements from President Donald Trump rattled investors. The Dow Jones Industrial Average fell over 700 points (1.7%), while the S&P 500 and Nasdaq dropped nearly 2% and 2.7%, respectively. The selloff was broad, with major technology stocks losing significant value and gold reaching a record high as investors shifted to safer assets. Auto stocks also declined globally amid concerns over upcoming U.S. auto tariffs. Treasury yields fell and Bitcoin slipped, capping a volatile week across markets.18
U.S. Equity Funds Rebound: U.S. equity funds recorded $22.24 billion in net inflows for the week ending March 26, 2025, the largest weekly gain since November 2024, according to LSEG Lipper. The reversal followed $33.53 billion in outflows the previous week. Large-cap funds led the gains with $23.1 billion in inflows, while small- and multi-cap funds also attracted capital; mid-cap funds saw slight outflows. Sectoral equity funds posted $1.96 billion in net outflows, driven by declines in consumer discretionary investments. Bond funds experienced accelerated redemptions totaling $2.97 billion, while money market funds posted their first inflow in three weeks at $2.52 billion.19
Musk Sells X to xAI: Elon Musk announced the sale of social media platform X, formerly known as Twitter, to his artificial intelligence company xAI in a $33 billion all-stock transaction. The deal values xAI at $80 billion and aims to integrate the platform’s user base and data with xAI’s AI capabilities. Musk stated the move would enhance both companies’ operations by combining infrastructure, talent, and distribution. xAI already leverages data from X to train its models, and its chatbot Grok is available to X users. Both firms remain privately held and are not required to disclose financial details publicly.20