China’s Ministry of Commerce announced Tuesday it was implementing counter-tariffs against the U.S. on multiple products, while announcing other trade-related measures, including an investigation into Google.
The government said it would implement 15% tariff on coal and liquified natural gas products, as well as a 10% tariff on crude oil, agricultural machinery, and large-displacement cars.
“The US’s unilateral tariff increase seriously violates the rules of the World Trade Organization,” the statement said. “It is not only unhelpful in solving its own problems but also damages normal economic and trade cooperation between China and the US.”
The 10% tariff that President Donald Trump ordered on China was set to go into effect Tuesday, though Trump planned to talk with Chinese President Xi Jinping in the next few days.
China’s State Administration for Market Regulation on Tuesday said it is investigating Google on suspicion of violating antitrust laws. While the announcement did not specifically mention any tariffs, the announcement came just minutes after Trump’s 10% tariffs were to take effect.
Elon Musk has launched a campaign from inside the federal government to radically upend agencies, exercising a level of control so sweeping that it is stunning former top White House officials, even in a political moment when many things are described as unprecedented.
Musk, the world's richest man and an advisor to President Trump, is leading a team called the Department of Government Efficiency, or DOGE. Despite the name, DOGE is part of the White House and not a Cabinet agency. In recent days it has gained access to the Treasury Department's payment systems, which are responsible for processing trillions of dollars of spending every year.
The Associated Press reported DOGE representatives have also gained access to classified information at the U.S. Agency for International Development, a decades-old foreign aid agency Musk says he plans to shut down. And now, Musk's cut-slashing unit is reported to be eyeing a way to gain access to the systems of the Small Business Administration, which gives loans and support to small firms, according to PBS News Hour.
"President Trump takes improving government efficiency very seriously. Obviously, although it is a humorous name, ironically, I think DOGE will have a very serious and significant impact on government waste and fraud and abuse, which is really astonishing in its scale and scope," Musk said during a live audio chat on his X platform on Sunday night.
Musk framed his vision of DOGE's work in ideological terms, disparaging the "tyranny of the bureaucracy" as unaccountable to American voters. Later in the conversation, he called for the "wholesale removal of regulations." Musk has a long history of sparring with and outright defying federal regulators who oversee his sprawling array of businesses.
As DOGE officials move quickly to get their hands on the inner workings of the federal government, Musk has been posting through it on X, the social media platform he owns, suggesting routine payments of the Treasury are violating the law and asserting that USAID is "a criminal organization" without providing evidence to support these claims. Musk did not return requests for comment.
"Before our very eyes, an unelected shadow government is conducting a hostile takeover of the federal government," Senate Minority Leader Chuck Schumer said on Monday.
Musk, the biggest donor in the 2024 election, has been using X to pounce on his critics, both Democrats and Republicans, who have questioned the reach of Musk's authority and just how much oversight he is receiving from Trump and senior White House officials.
"In terms of rule of law, we are losing it rapidly," said Eric Rubin, a retired ambassador who spent nearly 40 years in the foreign service. "Musk and DOGE are intentionally creating hundreds of potential court cases that could take months or years to resolve," he said. "But who knows what kind of damage they can inflict before that happens."
Security clearances and employment status
As Musk bores into vast parts of the federal government, his employment status has caused confusion, which the White House clarified on Monday. According to Press Secretary Karoline Leavitt, Musk is spearheading DOGE as "a special government employee." That's a temporary appointment that allows a person to work for no more than 130 days a year to perform "limited" services.
President Trump said Musk can only take action when he has explicit approval from the White House. "Where we think there's a conflict or a problem, we won't let him go near it," Trump said on Monday.
Federal ethics experts say since Musk operates six companies that cross multiple industries, including the rocket company SpaceX and the electric carmaker Tesla, it may be difficult for him to avoid running afoul of strict conflict-of-interest laws.
"He may not participate in any United States government matter that has a direct and predictable effect on his financial holdings," said Richard Painter, who served as the White House's top ethics lawyer under George W. Bush. "If he does, he commits a crime," said Painter, pointing to federal laws governing special government employees.
Something else that has drawn scrutiny: what security clearances Musk and other DOGE staff hold.
Multiple reports indicated DOGE representatives sought access to a "secure compartmented information facility," or SCIF, at USAID, which is a room containing sensitive documents that only someone with a high-level security clearance is permitted to enter.
"No classified material was accessed without proper security clearances," Katie Miller, a DOGE official, wrote on X on Sunday. Leavitt said on Monday she did not immediately have information about Musk's security clearance to share with reporters.
Rubin, the retired foreign service officer, said the possibility of a government employee accessing SCIF material without the proper clearance is concerning, adding that "there are zero exceptions" to the restricted access, given these rooms contain sensitive material.
Some young engineers from Silicon Valley have joined Musk's effort. That includes Gavin Kliger, whose LinkedIn page describes him as a "special advisor to the director" at the federal Office of Personnel Management. Kliger attended UC Berkeley until 2020. He worked as a software engineer at Twitter in 2019 and, most recently, as a senior software engineer at Databricks, a data analytics company, according to his LinkedIn profile.
A USAID.gov email address belonging to Kliger appeared in an email sent early on Monday morning to USAID staff, informing them that the agency's Washington headquarters would be closed for the day. Kliger didn't respond to NPR's questions about his role at USAID or OPM.
Some of the first legal challenges to DOGE's activities came on Monday.
The Alliance for Retired Americans and two unions representing federal employees filed a lawsuit seeking to block DOGE's access to the Treasury payment system, arguing that allowing Musk's DOGE team to access peoples' tax refunds, veterans' benefits, and disability checks is an unlawful privacy violation.
"We filed a lawsuit to say, 'hands off,'" Norm Eisen, a former White House ethics lawyer under former President Barack Obama, said in an interview. "You can't have my data. You can't have my spouse's data. You can't have my kid's data. That information is too precious," said Eisen, representing the alliance and the unions. "This is wrong. It's illegal."
President Donald Trump on Monday agreed to a 30-day pause on his tariff threats against Mexico and Canada as America’s two largest trading partners took steps to appease his concerns about border security and drug trafficking.
The pauses provide a cool-down period after a tumultuous few days that put North America on the cusp of a trade war that risked crushing economic growth, causing prices to soar and ending two of the United States’ most critical partnerships.
“I am very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for 30 days to see whether or not a final Economic deal with Canada can be structured,” Trump posted on social media. “FAIRNESS FOR ALL!”
Canadian Prime Minister Justin Trudeau posted Monday afternoon on X that the pause would occur “while we work together,” saying that his government would name a fentanyl czar, list Mexican cartels as terrorist groups, and launch a “Canada-U.S. Joint Strike Force to combat organized crime, fentanyl, and money laundering.”
The pause followed a similar move with Mexico that allowed for a period of negotiations over drug smuggling and illegal immigration. The 10% tariff that Trump ordered on China is still set to go into effect as scheduled on Tuesday, though Trump planned to talk with Chinese President Xi Jinping in the next few days.
While the trade war feared by investors, companies and political leaders now seems less likely to erupt, that doesn’t mean the drama over Trump’s tariff threats has ended. Canada and Mexico bought some additional time, but Trump could easily renew his tariffs and already plans to announce taxes on imports from the European Union.
All of that leaves the global economy uncertain about whether a crisis has been averted or if a possible catastrophe could still be coming in the weeks ahead.
▶ Follow live updates on President Donald Trump’s return to Washington
Trump on Saturday had directed 25% tariffs on imports from Mexico and Canada, with another 10% tariff on Canadian oil, natural gas, and electricity. The U.S. president had repeatedly previewed these moves, yet they still managed to shock many investors, lawmakers, businesses,s and consumers.
Multiple analyses by the Tax Foundation, the Tax Policy Center, and the Peterson Institute for International Economics showed that the tariffs could hurt growth, lower incomes and push up prices. But Trump repeatedly insisted — despite promises to curb inflation — that tariffs were necessary tools to get other nations to stop illegal immigration, prevent fentanyl smuggling, and treat the United States, in his mind, with respect.
Trump and Mexican President Claudia Sheinbaum announced the monthlong pause on increased tariffs against each other after what Trump described on social media as a “very friendly conversation,” and he said he looked forward to the upcoming negotiations.
Trump said the talks would be headed by Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, Commerce Secretary nominee Howard Lutnick, and high-level representatives of Mexico. Sheinbaum said she was reinforcing the border with 10,000 members of her country’s National Guard and that the U.S. government would commit “to work to stop the trafficking of high-powered weapons to Mexico.”
In 2019, when Mexico’s government also avoided tariffs from Trump’s administration, the government announced it would send 15,000 soldiers to its northern border.
But for much of Monday, the outlook was worrisomely different for Canada, only for an agreement to come together.
A senior Canadian official said Canada was not confident it could avoid the looming tariffs as Mexico did. That’s because Canada feels as if the Trump administration has been shifting its requests of Canada more than it did for Mexico. The official spoke on condition of anonymity, having not been authorized to speak publicly.
Asked Monday afternoon what Canada could offer in talks to prevent tariffs, Trump told reporters gathered in the Oval Office: “I don’t know.” He mused about trying to make Canada the 51st state, part of ongoing antagonism despite decades of friendship with Canada in a partnership that has ranged from World War II to the response to the 9/11 terrorist attacks.
The U.S. president also indicated that more import taxes could be coming against China: “If we can’t make a deal with China, then the tariffs will be very, very substantial.”
Financial markets, businesses, and consumers on Monday were still trying to prepare for the possibility of the new tariffs. Stew Leonard Jr., president and CEO of Stew Leonard’s, a supermarket chain that operates stores in Connecticut, New Yor,k and New Jersey, said his buyers were considering stocking up on Mexico’s Casamigos tequila ahead of the tariffs and switching from Canadian to Norwegian salmon.
Stock markets sold off slightly, suggesting some hope that the import taxes that could push up inflation and disrupt global trade and growth would be short-lived. Trump even inquired Monday how the financial markets were doing as reporters were leaving the Oval Office.
The situation reflected a deep uncertainty about a Republican president who has talked with adoration about tariffs, even saying the U.S. government made a mistake in 1913 by switching to income taxes as its primary revenue source.
Kevin Hassett, director of the White House National Economic Council, said Monday that it was misleading to characterize the showdown as a trade war despite the planned retaliations and risk of escalation.
“Read the executive order where President Trump was absolutely, 100% clear that this is not a trade war,” Hassett said. “This is a drug war.”
But even if the orders are focused on illegal drugs, Trump’s own remarks have often been more about his perceived sense that foreign countries are ripping off the United States by running trade surpluses. On Sunday, Trump said that tariffs would be coming soon on countries in the European Union.
On Monday afternoon, he suggested a willingness to keep using tariff threats because the size of the U.S. economy as the world’s largest made them effective.
“Tariffs are very powerful both economically and in getting everything else you want,” Trump told reporters. “Tariffs for us, nobody can compete with us because we’re the pot of gold. But if we don’t keep winning and keep doing well, we won’t be the pot of gold.”
Jaime Bricker, the tourism director for Skagway, Alaska, said visitors from Canada are an important part of her community’s economy and the uncertainty around the tariffs has been difficult.
She recently was in Vancouver, Canada, for a tourism event, and many people she encountered — from cab drivers to wait staff — expressed concerns that the exchange rate and any tariffs could make it difficult to visit the U.S.
“It seems to be a fluid situation and it’s difficult to know just how impactful it will be without knowing for certain what could come in the days ahead,” she said.
# Understanding Recent Trade Policy Developments
In a dramatic turn of events, proposed 25 percent tariffs on Canadian and Mexican imports have been temporarily postponed following last-minute diplomatic negotiations. The delay, announced just before the tariffs were set to take effect, gives the three nations 30 days to work on enhancing border security measures.
## The Diplomatic Compromise
The negotiations yielded specific commitments from both neighboring countries:
- Mexico agreed to deploy 10,000 National Guard troops to its northern border
- The U.S. committed to addressing the flow of American firearms into Mexico
- Canada reaffirmed its existing 1.3 billion border security plan from December
Taking to Truth Social, the administration expressed satisfaction with this "initial outcome" and confirmed the 30-day pause in implementing the tariffs while pursuing a potential "final Economic deal with Canada."
## Why These Tariffs May Never Materialize
Three key factors suggest these tariffs might be permanently shelved:
First, the economic impact would be severe and widespread. The Peterson Institute for International Economics estimates these tariffs would cost typical American households over $1,200 annually. The auto industry alone would face $60 billion in additional costs, potentially raising new car prices by $3,000. The construction sector would also suffer, particularly problematic given the current housing shortage and ongoing rebuilding efforts in Los Angeles.
Second, the tariffs were officially justified as a response to drug trafficking and immigration concerns rather than trade issues. With border security agreements now in place, the stated rationale for the tariffs has been largely addressed.
Third, there's a historical precedent for using tariff threats as negotiating leverage without following through. In 2019, similar threats against Mexico were withdrawn after securing immigration policy changes, demonstrating a pattern of using aggressive trade positions as diplomatic tools rather than end goals.
## Reasons for Concern
However, several factors suggest the tariff threat might resurface:
1. Recent statements reveal broader ambitions beyond border security, including reducing trade deficits and potentially pressuring Canada into closer alignment with U.S. interests.
2. The administration's views on trade protection date back to the 1980s, suggesting deeply held convictions rather than mere negotiating tactics.
3. Unlike during the previous term, current advisers appear less inclined to moderate extreme policy positions, as evidenced by recent decisive actions in other areas.
## Looking Ahead
While a complete withdrawal of the tariff threat seems most likely, particularly given strong opposition from business interests, the possibility of future protectionist measures cannot be dismissed entirely. The administration's longstanding views on trade combined with reduced internal resistance to dramatic policy shifts create ongoing uncertainty about North American trade relations.
The situation remains fluid, with the next 30 days potentially crucial in determining the long-term trajectory of North American trade relations. While the immediate crisis has been averted, stakeholders across industries continue monitoring developments closely, particularly given the broader implications for supply chains, consumer costs, and international relations.
Cryptocurrency prices took a hit from the prospect of a trade war between the U.S. and its major trading partners, with some well-known digital assets and President Donald Trump’s own meme coin taking big hits.
The price of bitcoin started falling from about $105,000 shortly after Trump announced plans Saturday to start putting large tariffs on goods from Canada, Mexico, and China.
The world’s most popular cryptocurrency fell to about $92,000 Sunday night before rebounding back over $100,000 Monday afternoon following Trump’s announcement of a pause on the tariffs on Mexican goods. He later announced a similar pause on tariffs against Canadian goods.
Bitcoin proved more resilient than other cryptocurrencies. Ethereum, dogecoin, and other popular cryptocurrencies have seen significant price drops since Trump’s weekend tariff announcement. Trump’s meme coin was trading at about $19 on Monday, which is about 75% below the all-time high it reached right after Trump launched the coin on the eve of his second inauguration.
“Those are riskier cryptos” than bitcoin, said Garrick Hileman, an independent cryptocurrency analyst. “But it’s a little surprising how big the gap is.”
The sell-off and partial rebound were part of a worldwide swing in financial markets on the eve of Trump’s tariffs going into effect. Trump warned Americans they may feel “some pain” from the tariffs, which he said would be “worth the price” to make America great again. He also said Sunday night that import taxes will “definitely happen” with the European Union and possibly with the United Kingdom as well. U.S. stock markets pared early losses Monday after Mexico’s president said she had negotiated a one-month reprieve for Trump’s tariffs on goods from her country.
Bitcoin was created in 2009 as a kind of electronic cash uncontrolled by banks or governments. It and newer forms of cryptocurrencies have moved from the financial fringes to the mainstream in recent years, with bitcoin’s price movements largely tracking that of tech stocks.
“The flip side of like this asset gaining respectability and finding a role in institutional portfolios is now all of a sudden you’re exposed to the liquidity constraints that larger investors face,” said Nic Carter, a partner at the crypto investment firm Castle Island Ventures. “We wanted bitcoin to become this global macro asset class. Now it is.”
Meme coins are a highly volatile corner of the crypto industry that often starts as a joke with no real value but can surge in price if enough people are willing to buy them.
Several of them have seen large price drops in the last few days. First Lady Melania Trump’s new meme coin, which she also launched just before Trump took office, is down nearly 90% from its all-time high.
Trump is a former crypto skeptic who has since warmly embraced digital assets, both as a source of personal wealth and as a matter of government policy. He’s promised to make the U.S. the world capital of crypto and appointed several crypto-friendly officials to key government positions.
Cryptocurrencies have enjoyed a surge in value since Trump’s election and bitcoin is still trading near its all-time high of $109,000.