Trump Escalates His Fight With Harvard

Reuters
By Yuval Rosenberg and Michael Rainey

Happy Tuesday! Because it's Tuesday! Not Monday! Here's what's happening.

Trump Reverses Himself on Another Tariff Threat

Complaining that negotiations are "going nowhere," President Donald Trump threatened to ramp up his trade war with Europe late last week, saying on Friday that he is "recommending a straight 50% Tariff on the European Union," starting on June 1.

Trump added later in the day that he does not expect the U.S. and the EU to reach a new trade deal in nine days. "I'm not looking for a deal," Trump said in the Oval Office. "I mean, we've set the deal. It's at 50%."

Markets did not respond well to the news, and on Sunday, following a phone call with European Commission President Ursula von der Leyen, Trump backed off a bit, announcing that he would delay the new tariffs until July 9.

"She said we will rapidly get together and see if we can work something out," Trump told reporters Sunday, referring to von der Leyen. Stocks soared on Tuesday on the news following the long holiday weekend.

Apple targeted: Adjusting his sights from Europe to California, Trump on Friday targeted Apple with a tariff threat as well.

"I have long ago informed Tim Cook of Apple that I expect their iPhone's that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else," Trump wrote on his social media platform. "If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S."

Trump officials have talked about Apple moving production of its iPhone and other devices from China and India to the U.S., but economists have warned that doing so would be both extremely difficult and extremely expensive. Some estimate that a U.S.-built iPhone could cost upwards of $3,000.

Apple is now the worst-performing of the major tech stocks this year, in large part due to Trump's tariffs, threatened and real, particularly those aimed at China. "This kind of tariff rhetoric, even if it never materializes, chips away at investor confidence," Haris Khurshid, chief investment officer at Karobaar Capital, told Bloomberg. "You can't run a $3 trillion company with a trade grenade hanging overhead."

Trump Targets Harvard Again in Funding Fight

The Trump administration is escalating its fight with Harvard University, directing federal agencies to cancel remaining contracts with the school, estimated to total about $100 million.

The move, detailed in a letter to agencies from the U.S. General Services Administration, is the latest in a series of actions aimed at the university, which President Donald Trump and his administration accuse of failing to protect Jewish students against antisemitism on campus, engaging in discriminatory practices and demonstrating a lack of commitment to national values and priorities. The administration demanded a series of concessions from the school and, when Harvard refused, the government froze some $3 billion in grants and contracts. The president has also threatened to revoke Harvard's tax-exempt status and his administration has tried to block the university from enrolling international students, which reportedly make up nearly a third of its student body.

The university filed a lawsuit last month to halt Trump's funding freeze and filed another last week seeking to preserve its ability to enroll international students. In that case, Harvard says the administration is violating the First Amendment, the Due Process Clause, and the Administrative Procedure Act. A judge last week granted a temporary order reinstating Harvard's right to enroll international students. A hearing in the case is scheduled for Thursday.

The GSA letter, first obtained by The New York Times, directs agencies to report on their contract cancellations by June 6 and encourages officials to "seek alternative vendors" for future services.

"Examples of contracts that would be affected, according to a federal database, include a $49,858 National Institutes of Health contract to investigate the effects of coffee drinking and a $25,800 Homeland Security Department contract for senior executive training," the Times reports.

In a Sunday morning post on social media, Trump said he is considering taking $3 billion in grant money from Harvard and giving it to trade schools across the country. He did not provide any details or explanation about what grants might be involved or how the funding could be redirected.

NPR sues Trump over funding cut: In another fight over Trump's funding cuts, National Public Radio and three of its local member stations sued the president and other administration officials on Tuesday, arguing that his May 1 executive order cutting federal funding to NPR and PBS violates the constitutional separation of powers by intruding on Congress's power over spending. They also say that Trump's order violates their First Amendment freedoms of speech and of the press.

NPR CEO Katherine Maher said in a statement that Trump's order was clearly aimed at punishing the organization for content and programming that the president dislikes: "By basing its directives on the substance of NPR's programming, the Executive Order seeks to force NPR to adapt its journalistic standards and editorial choices to the preferences of the government if it is to continue to receive federal funding."

Consumer Confidence Rebounds in May

For the first time in months, American consumers are feeling a bit more optimistic about the economy.

The Conference Board announced Tuesday that its consumer confidence index rose 12.3 points in May, to a reading of 98. It was the index's first monthly gain in five months, with the improvement seen across all age and income groups, as well as all political affiliations.

The rebound in the index, which gauges consumers' views on business conditions, employment prospects and future income, appears to be related to an easing in President Trump's trade war, at least in the short term. Trump has imposed huge tariffs on key trade partners and threatened to impose more, potentially boosting inflation and slowing the economy. But Trump has backed off those tariffs and threats to some extent in recent weeks, boosting the stock market and consumer attitudes.

"The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards," said Stephanie Guichard, an economist at The Conference Board. (Trump's return to tariff saber rattling against the European Union last week, followed by a brief postponement of hostilities, was too recent to be included in the May survey.)

The potential effects of tariffs remain a top concern for survey respondents. Consumers continue to be worried about the potential negative effects of tariffs on the economy, but also express hope that the tariffs could boost economic activity as well.

The White House was happy to take credit for the improvement. "Despite doomsday prophesizing by the 'experts,' President Trump's America First economic agenda of tariffs, tax cuts, rapid deregulation, and domestic energy production continues to pay off," a spokesperson said.

Quote of the Day

"Did my best."

− Tech billionaire and erstwhile DOGE chief Elon Musk, replying to a supporter on social media who complained about the failure of both Republicans and Democrats to sustain the cost-cutting efforts led by Musk during the first months of the Trump administration. The comment seemingly confirms that Musk is largely done with his work at DOGE.

Musk recently said he plans to spend more time on his tech companies as he steps back from the DOGE project, claiming it has saved $175 billion - a figure critics say is both grossly exaggerated and deceptive, since it obscures the fact that much of DOGE's effort is aimed at firing people in a chaotic and wasteful manner and canceling contracts that have been targeted for political reasons that have nothing to do with "government waste."

Still, the DOGE Project will live on to some degree, with some of Musk's handpicked lieutenants in charge. "The mission of DOGE - to cut waste, fraud, and abuse - will surely continue," White House Press Secretary Karoline Leavitt told Business Insider. "DOGE employees who onboarded at their respective agencies will continue to work with President Trump's cabinet to make our government more efficient."

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