The U.S. economy shrank at a 0.3% annual pace from January through March, the first drop in three years. It was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before President Donald Trump imposed massive tariffs.
Also, Trump has signed executive orders to on automobiles and auto parts, a significant reversal as the import taxes threatened to hurt domestic manufacturers.
Here’s the latest:
House Democratic Leader Hakeem Jeffries says the first 100 days of Trump鈥檚 term a 鈥榙ebacle鈥
The Democratic leader said the Trump team 鈥渢hought they could 鈥榮hock and awe鈥 us into submission.鈥
They thought wrong, he said. He鈥檚 vowing Democrats are ready to fight back.
鈥淲e鈥檙e just getting started,鈥 he said.
Wall Street sinks following signals that the US economy is sputtering
A discouraging report suggesting the at the start of the year, before most of could take effect, is knocking U.S. stocks lower Wednesday.
The S&P 500 was down 1.5% in morning trading and on track to break . The Dow Jones Industrial Average was down 479 points, or 1.2%, as of 10:40 a.m. Eastern time, and sharp drops for AI superstars like Super Micro Computer had the Nasdaq composite down 2%.
The weaker-than-expected report on the U.S. economy was a surprise because economists were expecting to see modest growth, particularly after the economy . But importers rushed to bring products into the country before tariffs could raise their prices, which helped drag on the country鈥檚 overall gross domestic product.
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Protest outside breakfast House Speaker Mike Johnson is attending
About 30 Washington, D.C., residents and organizers angry over the continuing delay to pass the city鈥檚 budget protested outside a private breakfast House Speaker Mike Johnson was attending.
Organizer Alex Dodd, of Free DC, said the goal was to disrupt the speaker 鈥渨hile you hold $1.1 billion of our local funding hostage.鈥
In a statement the organization put out, it said it was trying to send a clear message to Johnson: 鈥淲e are here to disrupt business as usual. We demand the immediate passage of the DC Local Funds Act, with no riders and no excuses.鈥
District of Columbia Mayor Muriel Bowser and the Council are scrambling to address the crisis created by the Republican-controlled House of Representatives. When Congress recessed April 10, it adjourned without addressing a $1.1 billion hole in the city鈥檚 2025 budget that was created when the House eliminated a little-known provision in a budget resolution.
Vermont judge orders release of a Palestinian man arrested at his US citizenship interview
A judge on Wednesday ordered the release of the Palestinian man who led in Gaza as a student at Columbia University and was arrested by immigration officials during an interview about finalizing his U.S. citizenship.
U.S. District Judge Geoffrey Crawford in Burlington, Vermont, issued his ruling following a hearing on Mohsen Mahdawi, a legal permanent resident for 10 years, who was arrested by Immigration and Customs Enforcement agents April 14. He鈥檚 been held at the Northwest State Correctional Facility in St. Albans.
A judge later issued an order barring the government from removing him from the state or country.
Mahdawi鈥檚 lawyers say he was detained in retaliation for his speech advocating for Palestinian human rights.
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Elon Musk now working remotely, not in-person
The billionaire outside adviser is no longer physically working from the White House, although 鈥渋t really doesn鈥檛 matter much.鈥
That鈥檚 according to White House chief of staff Susie Wiles, who tells the New York Post that speaking to him on the phone about his efforts at the Department of Government Efficiency is having the 鈥渟ame net effect鈥 as Musk being there in person.
鈥淗is folks aren鈥檛 going anywhere,鈥 Wiles added in the interview.
Musk is designated as a 鈥渟pecial government employee,鈥 which means he can only work 130 days in a 365-day time period. May 30 marks 130 days since Trump was inaugurated on Jan. 20.
Walmart and Target said to agree to absorb tariffs, ask Chinese suppliers to resume shipments
Chinese state media reported Wednesday that some Chinese toy exporters have been notified by Walmart and Target to resume partial shipments and that the U.S. businesses have agreed to shoulder the extra tariff costs.
The report came after Beijing in March summoned Walmart executives for allegedly pressuring Chinese suppliers to absorb tariff costs. One Chinese exporter named Cheng Zhengren told Beijing News he expects to make a shipment in a week or so.
鈥淲ithout us, what do they have to sell?鈥 the Chinese exporter told the newspaper. 鈥淭heir shelves would be empty.鈥
US inflation cools, consumer step up spending, as Americans brace for tariff impact
The closely watched inflation gauge cooled last month in a sign that prices were steadily easing before most of Trump鈥檚 .
At the same time, consumers accelerated their spending, potentially in an effort to .
Wednesday鈥檚 report from the Commerce Department showed consumer prices rose just 2.3% in March from a year earlier, down from 2.5% in February. Excluding the volatile food and energy categories, core prices rose 2.6% compared with a year ago, below February鈥檚 2.8%. Economists track core prices because they typically provide a better read on where inflation is headed.
The slowdown in inflation could be a temporary respite until the widespread duties imposed by Trump begin to push up prices in many categories. Economists forecast that inflation could reverse its recent decline and reach 3% or higher by the end of this year.
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Trump blames his predecessor, Joe Biden, for sharp stock market selloff Wednesday morning
The news behind the drop was a government report showing the U.S. economy shrank during the first three months of this year, as imports increased because businesses are attempting to frontrun the high import taxes being imposed by Trump.
Trump refused in a social media post to accept any responsibility for the economy鈥檚 direction.
鈥淭his is Biden鈥檚 Stock Market, not Trump鈥檚,鈥 Trump posted on Truth Social. 鈥淭ariffs will soon start kicking in, and companies are starting to move into the USA in record numbers. Our Country will boom, but we have to get rid of the Biden 鈥極verhang.鈥 This will take a while, has NOTHING TO DO WITH TARIFFS.鈥
About that hug ... Whitmer risks backlash from Democrats as she embraces Trump in Michigan
First came their much-analyzed Oval Office moment. Next, their subject-to-interpretation hug.
The two interactions between and a sometime antagonist, Michigan Gov. , reflect the Democratic governor鈥檚 efforts to move past last year鈥檚 hard-fought campaign and find common ground with the Republican president 鈥 at risk of political backlash.
Whitmer, a potential 2028 presidential candidate, shared a hug with Trump as he arrived in her home state Tuesday, less than a month after she shielded her face from cameras during an .
It鈥檚 typical for a governor or another high-ranking state official to greet the president when he steps off Air Force One in their state, a tradition that鈥檚 historically transcended partisanship.
But the embrace between Trump and Whitmer was notable at a time when Americans are increasingly saying and Democrats are for their leaders to take a more approach to the president.
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Trump鈥檚 plan to pave over the Rose Garden lawn will begin soon
The renovation will get underway in a 鈥渃ouple of weeks,鈥 White House chief of staff Susie Wiles told the New York Post in an interview.
Trump also wants to add a ballroom to the mansion, she said.
Wiles said in the interview published online late Tuesday that the ballroom is 鈥渟till in the design phase.鈥 But Trump is a 鈥渂uilder鈥 and she would expect the ballroom 鈥渢o go up pretty quickly鈥 once the preliminary work is done.
It was unclear where the ballroom would be added.
The East Room is the largest room in the White House and is traditionally used for large gatherings, such as receptions, bill-signing ceremonies and news conferences.
Trump has added since returning to power.
Ukraine ready to sign much anticipated mineral resources deal with the US on Wednesday
That鈥檚 according to two senior Ukrainian officials who spoke on condition of anonymity because they weren鈥檛 authorized to discuss the matter publicly.
Economy Minister Yulia Svyrydenko is currently in Washington for the final coordination of the agreement鈥檚 technical details, the sources said.
The Ukrainian Cabinet is expected to approve the agreement鈥檚 text earlier Wednesday, after which it will be signed by an authorized government representative. The deal will then require ratification in the Ukrainian parliament before it can take effect.
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鈥 Samya Kullab and Hanna Arhirova
US economy shrinks 0.3% in first quarter as Trump trade wars disrupt business
The economy shrank 0.3% from January through March, the first drop in three years. It was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before Trump .
The January-March expansion was the slowest in almost three years and was down from 2.4% in the last three months of 2024. Imports shaved 5 percentage points off first-quarter growth. Consumer spending also slowed sharply.
Trump inherited a solid economy that had grown steadily despite high interest rates imposed by the Federal Reserve to fight inflation. His erratic trade policies 鈥 including 145% tariffs on China 鈥 have paralyzed businesses and threatened to raise prices and hurt consumers.
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Former Vice President Kamala Harris plans a speech sharply criticizing Trump鈥檚 policies
The speech planned for Wednesday comes amid speculation about whether she鈥檒l mount another presidential campaign or opt to run for California governor.
Harris will address the 20th anniversary gala for Emerge America, an organization that recruits and trains Democratic women to run for office that grew in part from Harris鈥 run for San Francisco district attorney in the early 2000s.
Her speech also comes the day after Trump reached in office. It鈥檚 expected to be her most extensive public remarks since leaving office in January to Trump, with planned critiques of the Republican president鈥檚 handling of the economy, U.S. institutions and foreign policy.
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Former White House gun prevention official to lead advocacy group founded by the rapper Quavo
The gun violence prevention advocacy group is naming the former top official in the Biden administration鈥檚 office of gun violence prevention as its president.
Greg Jackson was deputy director of the . A first for the federal government, the office was created under President Joe Biden but closed by Trump in the early days of his second term.
Jackson will serve as a president of the Rocket Foundation, which is dedicated to preventing gun violence. The group was founded by the rapper Quavo and hosted a summit in Atlanta last June attended by then-Vice President Kamala Harris.
Quavo鈥檚 nephew, the rapper Takeoff, was killed in a 2022 shooting and the Rocket Foundation seeks to turn his death into a force for change.
The US government has a new policy for terminating international students鈥 legal status
The U.S. government has begun shedding new light on a , spelling out how it targeted thousands of people and laying out the grounds for terminating their legal status.
The new details emerged in lawsuits filed by some of the students who suddenly had their status canceled in recent weeks with little explanation.
In the past month, foreign students around the U.S. have been rattled to learn their records had been removed from a student database maintained by Immigration and Customs Enforcement. Some for fear of deportation or abandoned their studies to return home.
On Friday, after mounting court challenges, federal officials said the government was while it developed a framework to guide future terminations. In a court filing Monday, it shared the new policy: a document issued over the weekend with guidance on a range of reasons students鈥 status can be canceled, including the revocation of the visas they used to enter the U.S.
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Trump administration tells Congress it plans to label Haitian gangs as foreign terror organizations
The Trump administration has told Congress that it intends to designate Haitian gangs as foreign terrorist organizations, people familiar with the notification told The Associated Press.
The State Department similarly labeled in February as it on cartels operating in the U.S. and anyone assisting them. The new move indicates that the administration plans to put similar pressure on gangs from Haiti. The designation carries with it sanctions and penalties for anyone providing 鈥渕aterial support鈥 for the group.
It comes after a series of steps against the Venezuelan gang Tren de Aragua, which was designated a foreign terror organization and then dubbed an invading force under an to justify the deportation of Venezuelan migrants to a notorious under Trump鈥檚 sweeping immigration crackdown.
Trump, at a rally in Michigan on Tuesday, touted his designation of the six Latin American crime groups as foreign terrorist organizations, including MS-13 and Tren de Aragua.
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Trump marks his first 100 days in office in campaign mode, focused on grudges and grievances
on Tuesday celebrated the 100th day of his second term 鈥 yet spent much of his rally marking it in campaign mode, fixated on past grudges and grievances.
He repeatedly mocked his Democratic predecessor, Joe Biden, attacking his mental acuity and even how he appears in a bathing suit. He again uttered the lie that he won the 2020 presidential election. And he attacked polling and news coverage not favorable to him.
And Trump again and again returned to immigration, his signature issue, at the rally that marked his largest political event since returning to the White House 鈥 boasting about his administration鈥檚 鈥渕ass deportation鈥 efforts that have sent arrests for .
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Trump鈥檚 tariffs loom over the economy as shipments from China fall
American businesses are cancelling orders from China, postponing expansion plans and hunkering down to see what trade policy surprises President Donald Trump plans to spring on them next.
The president鈥檚 massive and unpredictable taxes on imports seem likely to mean emptier shelves and higher prices for American shoppers, perhaps within weeks.
And the higher costs and paralyzing uncertainty could exact an economic toll: U.S. consumers are in the biggest funk since COVID-19 hit five years ago, and economists say recession risks are climbing.
An early sign of the damage is expected to emerge on Wednesday when the Commerce Department releases its first look at first-quarter economic growth.
The economy is forecast to have expanded at an annual pace of just 0.8% from January through March, according to a survey of economists by the data firm FactSet. That would be the slowest quarter of growth in nearly three years and would be down from a
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Trump offers automakers some relief on his 25% tariffs, after worries they could hurt US factories
Trump signed executive orders to relax some of his 25% tariffs on automobiles and auto parts, a significant reversal as the import taxes threatened to hurt domestic manufacturers.
Automakers and independent analyses have indicated that could raise prices, reduce sales and make U.S. production less competitive worldwide.
The amended order provides a rebate for one year of 3.75% relative to the sales prices of domestically assembled vehicles. That figure was reached by putting the 25% import tax on parts that make up 15% of a vehicle鈥檚 sales price. For the second year, the rebate would equal 2.5% of a vehicle鈥檚 sales price, as it would apply to a smaller share of the vehicle鈥檚 parts.
A senior Commerce Department official, insisted on anonymity to preview the order on a call with reporters, said automakers told Trump that the additional time would enable them to ramp up the construction of new factories, after automakers warned that it would take time for them to shift their supply chains.
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