The Big Story 

The president is switching up his messaging on the economy amid growing concern from voters and even fellow Republicans about his trade agenda.

© AP Photo

After months of expressing unabashed confidence in his plans to impose sweeping tariffs, Trump is acknowledging the pain the U.S. economy may face under steep import taxes.

The latest economic blow to Trump came through Wednesday’s disappointing report on economic growth, which fell sharply in the first quarter due to a surge of imports ahead of the president’s tariffs.

While Trump and his top economic officials touted the strength of other areas of the economy and brushed off the tariff impact, the president also attempted to blame the decline on former President Biden.

Trump also conceded that tariffs could push up prices and potentially lead to goods shortages, urging business leaders Wednesday to be patient with him and acknowledging that American consumers might just have to grin and bear it.

Trump’s tariff comments run counter to his previous positions on their economic effects and represent a departure from his pledge to lower costs following the highest levels of inflation in 40 years.

Read the full report at TheHill.com.

Welcome to The Hill’s Business & Economy newsletter, I’m Aris Folley — covering the intersection of Wall Street and Pennsylvania Avenue.

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Tax Watch 

Welcome to Tax Watch, a new feature in The Hill’s Business & Economy newsletter focused on the fight over tax reform and the push to extend the 2017 Trump tax cuts this year.

SALT caucus passes on $25,000 cap as talks heat up

Rep. Nicole Malliotakis (R-N.Y.), one of the blue-state Republicans working to raise the state and local tax (SALT) deduction cap that was enacted as part of the 2017 Trump tax cuts, insisted Wednesday that lifting it to $25,000 wouldn’t be enough.

“$25,000 is not going to cut it,” she said, declining to name the level necessary to win her support.

Whether Republicans will pursue a higher cap for individuals at the expense of joint filers, or whether joint filers will be prioritized, is something that’s currently under discussion, she said.

“The question is, do we want a higher individual number? Or do we want to eliminate the marriage penalty, which would make the number lower for individuals? That’s the question we have to agree [on],” Malliotakis said.

The SALT deduction, a popular tax break among wealthy taxpayers in higher tax states that was limited to $10,000 in 2017, is among the most contentious provisions that Republicans are now debating.

— Tobias Burns

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