Principals

1. Bessent, Trump soothe markets
2. 60 Minutes turmoil
3. Pushback on Medicaid cuts
4. State overhaul
5. Dems press Hegseth
6. New Jersey gov to Gulf
7. US-China AI race
8. Fewer US employees thriving

PDB: Musk vows to step back from DOGE as Tesla earnings drop

Semafor’s World Economy Summit kicks off at 9 a.m. … Apple, Meta fined for breaking EU antitrust rules ... S&P 500 futures ⬆️ 2.14%

Stocks rise on hopes of China thaw

Markets surged as hopes of a trade deal with China rose. Reports broke that Treasury Secretary Scott Bessent privately told investors the administration does not see tariffs of more than 100% on Chinese goods as sustainable. He characterized the current state-of-play as a trade embargo, someone who attended the closed-door JPMorgan Chase event Monday told Bloomberg, and insisted the goal was not to decouple from China. Hours later, President Donald Trump said his China tariffs would “come down substantially” in any deal, though the two sides still have yet to start talking. Wall Street also breathed a sigh of relief after said he has “no intention” of ousting Federal Reserve Chairman Jerome Powell, after days of broadsides against the Fed chair. Bessent is slated to deliver remarks today at the IMF and World Bank’s spring meetings.

— Eleanor Mueller and Morgan Chalfant

Trump tensions at ‘60 Minutes’

The owner of CBS’ parent company in recent days sought to know which upcoming 60 Minutes stories were about Trump, two people familiar with the situation told Semafor’s Max Tani, as the White House continues to pressure the TV network over what it perceives as unflattering coverage. Shari Redstone’s involvement — and Paramount’s oversight of CBS, as it seeks the Trump administration’s approval for a merger with Skydance — have strained tensions between 60 Minutes and Paramount. That came to a head Tuesday when longtime producer Bill Owens resigned, saying he no longer had the editorial independence to make the right decisions for the program and its audience, as he wrote in a note first shared with The New York Times.

Choppy waters for GOP’s Medicaid cuts

When Republicans get into the details of cutting Medicaid spending to pay for tax cuts, things get pretty perilous. Consider Rep. Austin Scott, R-Ga., who on Monday floated shrinking the federal government’s 90% share of Medicaid expansion for states that opted to expand the program under the Affordable Care Act (Georgia is one of 10 states that have not expanded the program). He said on Fox Business that “we are going to ask the states to pick up and pay some additional percentage.” By Tuesday evening, congressional Democrats were hammering the plan, while Rep. Mike Lawler, R-N.Y., distanced himself from the idea. Senate Majority Whip John Barrasso suggested earlier this month that Republicans would look at imposing work requirements, ending benefits for undocumented immigrants and making sure people aren’t enrolled in multiple states as ways to save money through Medicaid adjustments.

— Burgess Everett

Rubio unveils his plan for State

Secretary of State Marco Rubio unveiled a plan to overhaul his department on Tuesday, though it fell short of more dramatic proposals that had been circulating. Rubio’s plan would cut State’s offices from 734 to 602, according to a senior spokesperson; among its more substantial moves, the plan would eliminate the office of the undersecretary for civilian security, democracy and human rights. The Trump administration is expected to also submit plans for reducing US-based staff by 15%. However, Rubio does appear to be keeping State’s Africa Affairs bureau, despite earlier rumors it would be slashed. And at least one office is getting added: a bureau focused on emerging threats like cybersecurity and AI. The department in its current form is “bloated, bureaucratic, and unable to perform its essential diplomatic mission in this new era of great power competition,” Rubio said.

National security Dems press Hegseth

Democrats with national security backgrounds are pressing Defense Secretary Pete Hegseth about recent staffing shakeups at the Pentagon. In a letter to Hegseth first shared with Semafor, the Democrats, led by Rep. Maggie Goodlander, D-N.H., pointed to the mishandling of sensitive information related to a military operation in Yemen in group Signal chats, as well as a round of firings of senior military advisers. “This lack of judgment is dangerous and has already put American lives at risk,” the letter reads. Goodlander and Reps. Seth Moulton, D-Mass., Chrissy Houlahan, D-Pa., and Eric Sorensen, D-Ill., requested details related to staffing in the absence of recently fired senior aides and details on national security protocols. The group also requested information about any improvements that have been implemented since the first Signal group chat scandals.

— Kadia Goba

New Jersey gov plans Gulf trip

New Jersey Governor Phil Murphy will lead an economic mission to Saudi Arabia, Bahrain, and the United Arab Emirates from April 25 to May 3 after the Gulf countries pledged to invest more than $2 trillion in the US economy over the next decade. Discussions will focus on creating jobs and investments in the Garden State in industries like manufacturing, artificial intelligence, and education, Murphy told Semafor. Murphy, a Democrat in his final year in office, has led similar trips in Asia and Europe, and plans additional missions to Israel, India, and Mexico. Murphy said there are opportunities for states to differentiate themselves within the broader US context. “There’s been a lot of volatility in our brand lately, and I’m confident that will settle down,” he said.

US, China battle over chips and talent

The US-China competition in AI is heating up as the Trump administration doubles down on Biden-era tech controls. Reuters reported this week that Huawei is on the verge of beginning “mass shipments” of its new AI chip to Chinese customers, on the heels of the Trump administration restricting the sale of AI chips made by Nvidia and AMD. The controls could be a boon for Chinese chipmakers, analysts told CNBC, after the US industry lobbied unsuccessfully against further curbs. One unsettled question: whether Trump will stick to the Biden-era AI export control regime that upset US allies and industry. At issue isn’t just the chips themselves: The US also risks losing the talent race to China, as evidenced by DeepSeek’s results, the Hoover Institution writes. More broadly, American scientists submitted 32% more applications for overseas jobs in Q1 2025 than the same period last year.

Share of ‘thriving’ employees shrinks

Fewer American and Canadian workers say they’re “thriving,” according to Gallup’s State of the Global Workplace report released today. The figure — 52% — is still higher than the 33% global average, which is at a four-year low. The US and Canada are falling behind Australia, New Zealand, Latin America, and the Caribbean in this measurement — which could worsen, if US tariffs usher in an economic slowdown. Employee engagement in the workplace is also on the decline globally, falling for the second time in the past 12 years, according to the report. Just over half of employees say it’s a good time to find a job where they’re living — another four-year nadir.

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Blindspot: Warren and Palin

Stories that are being largely ignored by either left-leaning or right-leaning outlets, curated with help from our partners at Ground News.

What the Left isn’t reading: Sen. Elizabeth Warren, D-Mass., struggled to answer questions about her past defense of Joe Biden’s mental acuity during a podcast interview.

What the Right isn’t reading: A jury found that The New York Times did not libel former Alaska Gov. Sarah Palin.

Beltway Newsletters

Playbook: With no trade deals in sight, Canada and Europe are prepping retaliatory moves to squeeze the US. “There’s a change in mindset. We’ve moved on from seduction to strategy,” one EU diplomat said.

Axios: The CEOs of major US retailers Walmart, Target, and Home Depot privately warned President Trump on Monday that his tariffs threatened US supply chains and price spikes.

White House

• President Trump plans to visit Saudi Arabia, Qatar and the United Arab Emirates, representing his first foreign trip of his second term.
• The White House is taking a serious look at backing an increase on taxes for the wealthy, despite pushback on Capitol Hill. — WaPo

Congress

• Democratic Leader Hakeem Jeffries met with Speaker of the House of Commons Lindsay Hoyle and British Foreign Secretary David Lammy on Tuesday during a multi-leg bipartisan congressional delegation. Jeffries also met with business leaders to reinforce “the close economic and security partnership that exists between the two countries,” he said in a statement.
• Rep. Haley Stevens, D-Mich., is running for US Senate.
• Sen. Shelley Moore Capito, R-W.Va., asked Health and Human Services Secretary Robert F. Kennedy Jr. to rethink cuts to a National Institute for Occupational Safety and Health branch in her state that studies black lung.

Outside the Beltway

• Yale is considering selling billions of its private equity portfolio as it faces potential budget challenges.
• Three federal lawyers who worked on the prosecution of New York City Mayor Eric Adams resigned, saying they felt the Justice Department wanted them to admit wrongdoing for refusing to drop their case against him.

Business

• Tesla saw its net profits declined by 71% during the first quarter, as Elon Musk faced backlash for his involvement in the Trump administration. The company’s auto revenue dropped 20% from a year prior. On a Tesla earnings call, Musk said his “time allocation to DOGE will drop significantly” likely next month.

Economy

• The IMF warned that President Trump’s trade war would lead to slower global and US economic growth, predicting the US economy would grow 1.8% in 2025 compared to 2.8% last year.

Courts

• The Supreme Court signaled it would side with religious parents looking to remove their children from public school lessons involving LGBTQ-themed books.

National Security

• Defense Secretary Pete Hegseth sent information about a US operation against the Houthis in Yemen that was provided to him in a secure channel by a top US general to “at least two group text chats” on Signal. — NBC

Foreign Policy

• The Trump administration plans to propose recognizing Ukraine’s Crimea as Russian territory in a new round of talks to end Moscow’s war in Ukraine, according to The Washington Post. Semafor’s Shelby Talcott and Morgan Chalfant first reported the administration was considering doing so last month.
• Secretary of State Marco Rubio is expected to skip the next round of peace talks because Kyiv rebuffed the Crimea proposal. — NYT
• The seasonal Canadian tourists known as “snowbirds” are increasingly staying away from the US. — Reuters

Big Read

• Harvard “frantically tried to cut a deal” with the Trump administration before receiving the April 11 letter of demands that set off its very public spat with the White House. — NYT

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

Greg Landsman is a Democratic congressman from Ohio.