Principals

1. Republican friction
2. China’s retaliatory tariffs
3. Lesson from Trump’s backtrack
4. Dems’ anti-tariff strategy
5. Paul steps back from conservative group
6. US-Iran talks

PDB: Supreme Court rules against Trump

Trump gets his annual physical … Big banks to report earnings … Caine confirmed as Joint Chiefs of Staff chairman

Why Republicans can’t celebrate yet

The champagne will remain on ice in Republicans’ offices, despite a pause on some tariffs and a budget breakthrough in the House, Semafor’s Burgess Everett and Eleanor Mueller report. That’s because there are huge disagreements to sort through on taxes, spending cuts, and Medicaid in order to finalize President Donald Trump’s agenda — and there’s still a lot of heartburn about Trump’s remaining tariffs. Indeed, all is not all well in the Republican Party at the moment, and some are still second-guessing the reconciliation strategy they settled on. “Now you’ve got to actually write these bills,” Sen. Lindsey Graham, R-S.C., told Semafor. “If this gets to be a long, drawn out and never-ending process, then everything we worried about with the ‘big beautiful bill’ comes true.” And those remaining tariffs? “I’m not a fan,” said Sen. Ron Johnson, R-Wis.

China hits back

The US-China trade war worsened as Beijing hiked tariffs on US goods to 125% in retaliation. China is “not afraid,” Chinese leader Xi Jinping said. Despite Trump hitting pause on higher tariffs on other nations, the markets are suffering due to the heightening trade tensions between the world’s two largest economies. US stocks slid again on Thursday after a brief respite, while the dollar had its worst day since 2022. Stocks in Europe and Asia also fell. The Trump administration did receive some encouraging economic news on Thursday, with data showing that US consumer prices eased more than expected last month. That trend is unlikely to continue, though, as existing tariffs will contribute to inflation, economists warn.

Beware the bond market

It turns out there was a “Trump put.” It just had a lower strike price than we thought and was on a different market. Investors who had clung to the idea that enough pain would force Trump to buy back his policies — a “put,” in market-speak — turned out to be correct, but it wasn’t the $10 trillion that vanished from stock portfolios that did the trick. It was the bond market, where Treasurys saw their sharpest moves since 2008. The threat of sustained high borrowing costs took the king of debt from “BE COOL” to blinking in just a few hours. In head-to-head negotiations during his presidency, Trump has been all but unbeatable, cowing one law firm and world leader after another. But the market is too diffuse to be bullied. In the end, the crypto president was beaten by decentralized finance.

Dems stick with long-shot anti-tariff strategy

House Democrats are trying to drive a wedge between Republicans on Trump’s tariffs, but their potential GOP allies aren’t moving in their direction, Semafor’s Kadia Goba reports. As House Republican leaders shut off a tool Democrats could use to force quick floor votes objecting to the tariffs, Democrats quickly embraced another route, known as a discharge petition. With 218 signatures, the petition would force action on their proposals to roll back the tariffs. But getting there would require at least five Republicans to cooperate, and the GOP’s tariff skeptics and battleground-seat members are holding back. “I don’t know if we’re to that point yet,” Rep. Dan Newhouse, R-Wash., said. Still, Democrats’ long-shot anti-tariff push, Kadia writes, is arguably the party’s most cohesive legislative strategy so far to push back against Trump, in spite of a handful of Democratic holdouts.

Rand Paul’s new mission

Sen. Rand Paul is inarguably one of the most conservative members of Congress — yet he’s decided to step back from the conservative Senate Republican Steering Committee, he told Semafor. The Kentucky Republican has been ending up on the other side of his Steering colleagues on tariffs, raising the debt ceiling, and the GOP’s budget plans. “Let’s just say, like the tariffs, we put it on pause,” he said of his involvement in the committee. Paul said it’s part of a larger effort to focus his energy and unique message outside Washington. “I just need more time talking with the public, traveling to meet with the public. The things that I’m for are maybe more popular outside of Washington than inside of Washington. So I think I’m going to direct my view outwards for the next couple years,” Paul said.

— Burgess Everett

Trump’s latest ‘peace’ target: Iran

Trump’s latest quest to be the world’s peacemaker has landed special envoy Steve Witkoff in Oman, where the administration says the US will hold “direct talks” with Iran on Saturday over curtailing its nuclear program. Secretary of State Marco Rubio said that Witkoff would meet with “a top-level” Iranian leader. The conversation would represent the first direct talks between the US and Iran in a decade, but the Iranians have described the talks as indirect, making the exact nature of the engagement unclear. “We hope that’ll lead to peace,” Rubio said. The plans are raising eyebrows on Capitol Hill and in Israel, where officials worry about Trump agreeing to a weak deal. “We should be very, very careful,” Senate Armed Services Chairman Roger Wicker told The Hill. The Economist, meanwhile, called Trump’s pursuit of a deal an “oddly sensible move.”

Blindspot: Trade ties and Social Security

Stories that are being largely ignored by either left-leaning or right-leaning outlets, curated with help from our partners at Ground News.

What the Left isn’t reading: Australia turned down an offer from China to “join hands” in the face of President Trump’s tariffs.

What the Right isn’t reading: The Social Security Administration is reversing course on a requirement that would have forced certain people to go into agency offices to verify their identities.

A doctor debates 20 anti-vaxxers, Ben Shapiro debates 25 liberals, Pete Buttigieg debates 25 conservatives. In a YouTube universe overflowing with talking heads and political rants, Jubilee Media’s chaotic, irresistible debate videos stand out. But are they healing America’s divides — or just cashing in on them?

This week, Ben and Max talk to Jubilee founder and CEO Jason Y. Lee about his ambitious mission to foster “radical empathy” through face-offs between people who rarely sit in the same room. They dive into whether even the silliest debates — flat-earthers vs. “round-earthers” — can spark something meaningful. They also discuss why the Biden White House censored parts of their video with Buttigieg and the lessons Democrats can learn for the next election.

Beltway Newsletters

Punchbowl News: Rep. Angie Craig, D-Minn., is “weeks away” from deciding whether to jump into the state’s Senate race, and she’s planning a town hall tour of GOP districts in the meantime to highlight how Republicans have scaled back their own appearances. “I work with Brad Finstad, Tom Emmer, Michelle Fischbach and Pete Stauber when I can on specific policy issues that are right for Minnesota, but it’s chicken sh*t not to show up and do a town hall to your constituents,” she said.

Playbook: Treasury Secretary Scott Bessent is in charge of the Trump administration’s trade team now, while trade adviser Peter Navarro has been pushed to the side and Commerce Secretary Howard Lutnick is now the “bad cop.”

WaPo: Vice President JD Vance is increasingly at odds with Pope Francis on immigration, despite being vocal about his Catholic faith.

Axios: During upcoming talks, Iran may propose that Tehran and Washington “work on an interim nuclear agreement before pursuing negotiations over a comprehensive deal.”

White House

• President Trump is planning to establish a federal wildfire response task force. — Politico
• The Government Accountability Office is auditing DOGE’s data use practices. — WIRED

Congress

• The House passed legislation requiring proof of citizenship to vote.
• Republican Sens. Lisa Murkowski, John Curtis, Thom Tillis, and Jerry Moran raised concerns about repealing Biden-era clean energy tax credits in a letter to Senate Majority Leader John Thune. — Bloomberg
• Democratic Sens. Adam Schiff and Ruben Gallego wrote to the White House calling for an investigation of possible insider trading related to President Trump’s backtrack on tariffs.
• The Senate confirmed Mark Meador as an FTC commissioner.

Outside the Beltway

• A helicopter crashed in the Hudson River, killing six people.

Economy

• The European Union delayed retaliatory tariffs to allow for talks with the US. European Commission President Ursula von der Leyen also told the Financial Times that the EU could target Big Tech’s ad revenues if trade talks don’t pan out.
• The UK’s central bank said it would sell just under $1 billion in short-term US bonds, rather than selling longer-term ones, due to “market volatility.”

Courts

• The Supreme Court ordered the Trump administration to try to retrieve the immigrant man who was deported due to an “administrative error” and who has since been imprisoned in El Salvador.

Education

• The Trump administration wants to pursue an arrangement that puts Columbia University into a consent decree, which would require federal oversight to ensure the school complies with demands of the federal government. — WSJ
• The Commerce Department pulled a $4 million grant from Princeton University for research that focuses on “alarming climate scenarios.”

Health

• At a Cabinet meeting, HHS Secretary Robert F. Kennedy Jr. said the agency had launched a research effort into autism and would know “what has caused the autism epidemic” by September.
• The CDC has laid off many of its cruise ship inspectors amid a surge of norovirus cases.

Transportation

• The FAA is investigating an incident at Ronald Reagan National Airport outside DC during which two American Airlines regional jets bumped wings. At least six lawmakers were onboard, but no one was hurt.

National Security

• In a memo to a federal court, State Secretary Marco Rubio did not accuse Mahmoud Khalil, a pro-Palestinian activist with a green card who the administration has sought to deport, of any illegal conduct. But he maintained Khalil’s presence in the country would undermine US foreign policy. — AP
• The Trump administration has moved more than 6,000 migrants’ Social Security numbers into the “death master file,” part of a new tactic of revoking benefits that the White House hopes will pressure legal migrants to “self-deport.” — NYT
• Chinese officials acknowledged late last year that Beijing was behind a series of cyberattacks on US infrastructure, a threat officials worry could intensify during President Trump’s trade war. — WSJ

Foreign Policy

• US ambassador to Ukraine Bridget Brink is leaving her post early.
• Vietnam, hit with particularly punishing tariffs in the original version of President Trump’s “Liberation Day” rollout, is offering to tighten its own exports to China in exchange for some relief. — Reuters
• The Trump administration is working on plans to acquire Greenland, emphasizing “persuasion over coercion” and drawing comparisons between Greenland and Alaskan Inuit culture. — NYT

Media

• Kentucky Gov. Andy Beshear launched a podcast.

Principals Team

Edited by Morgan Chalfant, deputy Washington editor

With help from Elana Schor, senior Washington editor

And Graph Massara, copy editor

Contact our reporters:

Burgess Everett, Kadia Goba, Eleanor Mueller, Shelby Talcott, David Weigel

JB Pritzker is the Democratic governor of Illinois. Sign up for Semafor Net Zero to read more about the Trump administration’s order designed to block state-level climate change policies.