Principals

1. US-China tariff pause
2. Trump’s Mideast trip
3. Gulf eyes deals
4. Senate debates reg repeal
5. SALT meeting
6. Dem immigration moves
7. Jeffries defends NJ Dems
8. NOAA cuts

PDB: Sanders adviser has praise for Trump tax hike idea

EU finance ministers meet … Marcos vs. Duterte feud fuels Philippines election … Dow futures ⬆️ 2.16%

US, China agree to pause tariffs

The White House announced a 90-day tariff pause with China following weekend talks in Switzerland. In a joint statement early Monday, the US said it would temporarily drop its levies on China to 30%, from 145%, and China pledged to drop its tariffs in kind from 125% to 10%. Global stocks surged on the news. Treasury Secretary Scott Bessent, who traveled with US Trade Representative Jamieson Greer to Geneva for the trade discussions over the weekend, teased the deal on Sunday by praising the “substantial progress” made there; Greer was more forceful, touting “how quickly” the two countries struck a deal. The Monday statement also named Bessent and Greer as the US pointmen for later rounds of talks. The Trump administration continues to engage with other countries about tariffs: Trump said he plans to “increase trade substantially” with India and Pakistan after the US helped broker a peace deal between the two countries.

— Shelby Talcott and Graph Massara

Trump’s Gulf trip is all business

President Donald Trump’s first international trip of his second term will be mostly business. Trump is expected to highlight a series of investment announcements during his swing through Saudi Arabia, Qatar, and the UAE. Trump is also getting ready to accept a luxury jet as a gift from the royal family of Qatar, though the plane — a luxe “palace in the sky” — will not be presented to Trump during this visit. Iran and the Gaza war will also unavoidably come up in his meetings, and CNN reports that the administration is eyeing a longer-term expansion of the Abraham Accords — and turning to Jared Kushner to help lay the groundwork. Notably, Trump does not plan to visit Israel on the trip, perhaps a sign of the growing divide between the American president and Israeli Prime Minister Benjamin Netanyahu.

Gulf expectations high for Trump deals

Expectations in Gulf state-backed media ahead of Trump’s visit range from cautious optimism to what can politely be called wishful — or more accurately, delusional — thinking, Semafor’s Mohammed Sergie writes. Among the floated outcomes have been Trump agreeing a nuclear deal with Iran, recognizing a Palestinian state, normalizing Saudi-Israel ties, and even breaking ground on a Trump tower in Damascus. What is more likely is a set of deals that converge “America First” and Saudi, Qatari, and Emirati priorities: Trump wants investment and arms deals, the Gulf is targeting closer alignment with Washington, along with concessions on technology transfers and nuclear cooperation. One tangible possibility, two experts write in a Semafor column, is a US-Gulf economic corridor focused on investment and technology, and not simply on defense as prior relationships have been based.

GOP questions Calif. emission vote

Senate Republican leaders want to repeal the emissions waivers California received to push toward zero-emission vehicles. They still have work to do, Semafor’s Burgess Everett reports. There are at least four Republicans either still asking questions about the move or staying quiet: Mitch McConnell, John Curtis, Lisa Murkowski, and Susan Collins — the last of whom is “always wary of disagreeing with the parliamentarian.” The nonpartisan parliamentarian cited a Government Accountability Office review that found that the emissions waivers are not a rule subject to repeal via the Congressional Review Act. That has Democrats arguing the GOP, if it takes up the waivers, would set an expanded precedent for regulatory rollbacks that they could use if they retake power. Republican leaders shrug off those concerns, but Curtis said he’s “using all the time I have to gather all the information I can.”

Republicans close in on tax package

Republican proponents of ending the 2017 cap on the state and local tax deduction are headed for a meeting today that could lead to a final deal. The so-called SALT Caucus, leveraging the GOP’s razor-thin House majority, has made clear that the price of their support for Trump’s broader economic agenda is SALT relief. House Speaker Mike Johnson called the SALT cap “one of the last issues to resolve” in a text message to lawmakers, viewed by Semafor, after the preliminary text for major portions of the party’s marquee tax bill emerged. The legislation would make permanent the individual tax rates set to expire at year’s end, while temporarily boosting the child tax credit and standard deduction. The early estimate isn’t complete but is already raising concerns; Republicans are reportedly eyeing a $4 trillion bill that would require $1.5 trillion in revenue-raisers.

— Kadia Goba

Gallego jumps into immigration debate

Sen. Ruben Gallego, D-Ariz., is introducing his own moonshot immigration plan as Democrats mostly cool on shooting for big immigration reforms. After all, Trump’s strongest issue has historically been immigration, and the Gang of Eight bill is more than a decade in the rearview. But Gallego won’t be dissuaded — and he’s using an increasingly large platform to push his priorities. “Talking to voters in Arizona, what they wanted was a secure border and a sane pathway to citizenship or stabilization. If we make that policy, and we communicate that, I think that’s the winning argument,” Gallego said during a swing in Pennsylvania over the weekend. His five-pillar plan: border security, asylum reform, expanding legal pathways for workers, allowing a path to citizenship for Dreamers and undocumented spouses, and implementing a “proactive” regional strategy to stem illegal immigration.

— Burgess Everett and Dave Weigel

Jeffries backs Dems after ICE scuffle

House Democratic Leader Hakeem Jeffries defended three New Jersey colleagues after the Trump administration suggested it might charge them over a scuffle at an ICE facility. Reps. LaMonica McIver, Bonnie Watson Coleman, and Robert Menendez had joined Newark Mayor Ras Baraka on a Friday visit to the Delaney Hall detention center in Newark. Video taken from the scene showed Watson Coleman and McIver protecting Baraka when agents began arresting him for trespassing; McIver resisted when an agent approached with handcuffs, and was held back when Baraka was marched behind a gate. After DHS warned of “more arrests coming,” Jeffries told the administration to “keep your hands off members of Congress.” The incident has already impacted Baraka’s run for governor, with every Democratic competitor declaring solidarity with him and GOP frontrunner Jack Ciattarelli accusing him of “shilling for illegal immigrants.”

— David Weigel

NOAA cuts could come with an upside

The deep budget cuts DOGE has inflicted on the National Oceanic and Atmospheric Association could also spur the agency to adopt high-tech weather balloons, Semafor’s Reed Albergotti writes. A weather balloon startup called WindBorne can provide valuable weather balloon data for a fraction of the cost by keeping the balloons in the sky for weeks, using a combination of off-the-shelf computer parts and novel software to maneuver in midair. The result, WindBorne says, is an AI-powered weather prediction model that is currently among the best in the world. CEO John Dean called some of DOGE’s cost-cutting “reckless,” but said it might be a net positive for NOAA and his business: “It’s created chaos that, long term, will probably get us more data,” he said.

Uncommon bonds: Lowering drug prices

Lowering US drug prices has emerged as a popular and bipartisan cause. The topic is attracting attention from President Donald Trump, who is expected to sign a related executive order this week, as well as from lawmakers on Capitol Hill. Sens. Josh Hawley, R-Mo., and Peter Welch, D-Vt., recently locked arms to introduce a bill to block pharmaceutical companies from selling drugs in the US at a higher cost than the international average. “What I appreciate about Sen. Hawley is, he gets it,” Welch told Semafor’s Morgan Chalfant. “The folks in his state are hammered with these high prices just like the folks in Vermont. This is a universal problem.” Hawley said he’s trying to convince other Republican senators to sign on, and expressed hope that Trump’s support for a similar policy would add momentum.

Beltway Newsletters

Punchbowl News: House Republicans are planning a significant overhaul of clean energy tax credits as part of their tax package. For instance, electric vehicle tax credits are likely to be repealed by the end of the year, while the credits will be phased out.

Axios: President Trump is hoping to return to Washington from the Gulf with $1 trillion in deals and investment commitments.

Playbook: Trump’s trip could seal the deal on an emerging agreement between Qatar Airways and Boeing.

White House

• President Trump ousted the head of the US Copyright Office, Shira Perlmutter, triggering backlash from Democrats.

Congress

• The House Energy and Commerce Committee released the text of its portion of the reconciliation package late last night, confirming a Wall Street Journal report that the panel would try to strike a middle ground on cuts to Medicaid spending after the issue inspired a heated debate between Republican moderates and conservative hardliners.

Economy

• The economist Stephanie Kelton, a onetime adviser to Sen. Bernie Sanders, spoke approvingly of President Trump’s musings about letting tax cuts on some high-earning Americans expire. Trump’s no-tax-on-tips and no-tax-on-overtime proposals are “likely to be stimulative,” she told Semafor’s Ben Smith, so “you have to think seriously about the potential for inflation.”

• Treasury Secretary Scott Bessent is giving lawmakers until mid-July to raise the debt limit in order to avoid a US default.

Courts

• A federal judge in California largely paused President Trump’s efforts to shut down programs and fire federal workers.

Transportation

• Newark International Airport is operating at reduced capacity after a technical problem, the third in recent days, snarled air traffic.

Foreign Policy

• Hamas said it would free the last living American being held hostage in Gaza.
• Ukrainian President Volodymyr Zelensky offered to meet Russian President Vladimir Putin in Turkey this week.

Technology

• The Treasury Department is reviewing a Benchmark Capital-led $75 million investment in Chinese startup Manus AI, Semafor’s Reed Albergotti reports, the latest example of an intensifying tech race between the two countries.

Media

• Democrats have been seeking out a variety of progressive and liberal media commentators; Substack stars like Matt Yglesias and Tim Miller were invited to a recent donor retreat, Semafor’s Max Tani writes.
• The former top number-cruncher at 538 is starting his own data journalism site, Max scoops.

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

Tim Burchett is a Republican congressman from Tennessee.