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U.S. markets are poised to open with big gains, a clear sign of relief after President Donald Trump said he would not attempt to fire the head of the Federal Reserve.
U.S. Treasury Secretary Scott Bessent also said Tuesday that the ongoing tariffs showdown against China is unsustainable and he expects a “de-escalation” in the trade war between the world’s two largest economies. With Tesla profits tanking, billionaire Elon Musk said he advised Trump against tariffs and he’ll now spend less time in Washington slashing government costs.
Two major law firms will be in court asking judges on Wednesday to permanently block Trump’s executive orders that are designed to punish them and hurt their business operations.
And U.S. partners are taking stock of Secretary of State Marco Rubio ‘s plans for a massive overhaul of the State Department including closing or consolidating more than 100 bureaus worldwide.
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Rubio’s massive State Department overhaul would cut staff and bureaus
Democrats blasted the reorganization plan announced by Rubio on social media Tuesday and detailed in documents obtained by The Associated Press as the Trump administration’s latest attempt to gut “vital components of American influence” on the world stage.
Rubio ‘s overhaul would reduce staff in the U.S. by 15% while closing and consolidating more than 100 bureaus worldwide, reimagining foreign policy as Trump cuts the size of the federal government. It’s driven in part by the need to find a new home for the remaining functions of the U.S. Agency for International Development, an agency that Trump administration officials and billionaire ally Elon Musk’s Department of Government Efficiency have dismantled.
“We cannot win the battle for the 21st century with bloated bureaucracy that stifles innovation and misallocates scarce resources,” Rubio said in a department-wide email obtained by AP. He said the reorganization aimed to “meet the immense challenges of the 21st Century and put America First.”
▶ Read more about Rubio’s plan to overhaul the department
Law firms fighting Trump to ask judges to permanently block executive orders
Two major law firms are expected to ask separate judges on Wednesday to permanently block Trump’s executive orders that were designed to punish them and hurt their business operations.
The firms — Perkins Coie and WilmerHale — have said the orders imposed in March are unconstitutional assaults on the legal profession that threaten their relationships with clients and retaliate against them based either on their past legal representations or their association with particular attorneys who Trump perceives as his adversaries.
Courts last month temporarily halted enforcement of key provisions of both orders, but the firms are in court Wednesday asking for the edicts to be struck down in their entirety and for judges to issue rulings in their favor. Another firm, Jenner & Block, is expected to make similar arguments next week.
The executive orders taking aim at some of the country’s most elite and prominent law firms are part of a wide-ranging retribution campaign by Trump designed to reshape civil society and extract concessions from perceived adversaries.
▶ Read more about the law firms’ request to the judges
US Treasury secretary says trade war with China is not ‘sustainable’
Treasury Secretary Scott Bessent said in a Tuesday speech that the ongoing tariffs showdown against China is unsustainable and he expects a “de-escalation” in the trade war between the world’s two largest economies.
Scott Bessent, President-elect Donald Trump’s choice to be secretary of the Treasury, appears before the Senate Finance Committee for his confirmation hearing, at the Capitol in Washington, Thursday, Jan. 16, 2025. (AP Photo/J. Scott Applewhite)
But in a private speech in Washington for JPMorgan Chase, Bessent also cautioned that talks between the United States and China had yet to formally start.
“I do say China is going to be a slog in terms of the negotiations,” Bessent said according to a transcript obtained by The Associated Press. “Neither side thinks the status quo is sustainable.”
The S&P 500 stock index rose 2.5% after Bloomberg News initially reported Bessent’s remarks.
Trump acknowledged the increase in the stock market in remarks to reporters afterward on Tuesday, but he avoided confirming if he, too, thought the situation with China was unsustainable as Bessent had said behind closed doors.
▶ Read more about Bessent’s comments
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