Washington Edition

This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Every Monday, Bloomberg Intelligence senior analyst Nathan Dean gives his insights into what’s been happening and what’s coming up in the nooks and crannies of government and markets. Sign up here and follow us at @bpolitics. Email our editors here.

Hitting the Floor

Happy belated Mother’s Day to all the moms out there. Hope you had a good weekend. Mine was spent in a Cory Booker-style 24-hour marathon of driving girls to dance rehearsals, dropping off food for the recital and a panicked rushing to the nearest florist to buy flowers for said. In the end, the Wizard of Oz ballet was amazing, and for all the headaches it’s something I’ll miss in 10 years.

Of all the news today on the US and China lowering tariffs on each others products, I think Treasury Secretary Scott Bessent’s interview on Bloomberg Surveillance gives a good idea of where we are headed. He called the current tariffs “obviously a floor” and said that the bump up to the 145% level was “retaliation.” When you take that plus the UK-USA deal from last week, it feels like we’re headed for blueprint deals of 10% baseline tariffs — with some countries higher — and a combination of exemptions and non-monetary agreements.

Here at Bloomberg Intelligence, we often put out “reacts” to news breaking events. And whether it’s Stanley Black & Decker or Amazon, the message on tariffs is upbeat. Or as my colleagues Poonam Goyal and Anurag Rana write on the terminal, the lowered tariffs are still a headwind, but it could help retailers meet demand without substantial price increases.

On the budget reconciliation front, the House Way and Means panel released their multi-trillion dollar tax-cut plan. See the outline here: House Tax Bill Calls for $30,000 SALT, Omits Millionaire Tax. The full text can be read here.

The committee debate scheduled for tomorrow is going to be messy. I am still telling clients that a vote to increase the deficit (or scale down the size of the tax extension) is easier than a vote to cut Medicaid, the Inflation Reduction Act or the Supplemental Nutrition Assistance Program.

I’m a US domestic policy analyst and can only watch in awe to my colleagues who cover geopolitical matters, but this Big Take — Trump Truce Leaves India Furious, Pakistan Elated as Risks Loom — explained a lot to me of what is happening between India and Pakistan.

Tidbits

Bessent often mentions deregulation as the third pillar of economic growth. And while I’ve said before there’s no “magic wand” for de-regulation, that effort may kick off soon. Here’s my financial regulation preview for terminal clients.
Last week saw the Vatican City elect Pope Leo XIV but I found this Bloomberg story on a “secretive bipartisan conclave“ to elect a House chaplain interesting.
For those that take the Roosevelt Bridge across to Rosslyn, heads up, looks like massive construction is in the cards – until 2027. — Nathan R. Dean

Don’t Miss

Xi Jinping’s decision to stand his ground against President Donald Trump could hardly have gone any better for the Chinese leader, with the deal on tariffs meeting nearly all of Beijing’s core demands.

The US collected record revenue from tariffs in April, helping to limit a widening of the budget deficit, though Trump’s search for trade deals with targeted nations may scale back future amounts taken in.

Trump is attempting to slash drug prices for Americans by more closely aligning their costs to lower prices paid abroad, though his order was far weaker than pharmaceutical companies anticipated.

A House committee tucked language preventing states from regulating artificial intelligence into a massive tax and spending bill, a move that would benefit many of the US’s largest tech and AI companies.

Small, rural communities are convinced their economic well-being depends on ICE contracts that keep private jails open for immigration detention — no matter what happens inside.

Dozens of White Afrikaners arrived in the US today, the first beneficiaries of a controversial resettlement program instigated by Trump, who is meeting with South African leaders next week.

Trump said he wouldn’t use a luxury jet being offered by the Qatari government after leaving office amid criticism over his administration’s consideration of using the plane as the next Air Force One.

The president raised the possibility of flying to Turkey on Thursday to join potential conversations over the war in Ukraine between Volodymyr Zelenskiy and Russia’s Vladimir Putin.

Harvard University fired back at Education Secretary Linda McMahon, denying her allegation that the school has a partisan political bias and warning that government “overreach” is threatening key freedoms.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Kailey Leinz and Mike Shepard interviewed Samm Sacks, professor of China studies at Yale University, about the trade negotiations between the Trump administration and the Chinese government.

On the program at 5 p.m., they talk with Republican Representative Mike Lawler of New York about the House tax-cut bill released today and the negotiations on the details still ahead.

On The Deal podcast, Alex Rodriguez and Jason Kelly spoke with McLaren CEO Zak Brown about how McLaren Racing came back from the brink of bankruptcy to be a winning team and why Netflix and Brad Pitt are crucial to Formula One’s growth. Listen on iHeart, Apple Podcasts, Spotify or wherever you get your podcasts.

Chart of the Day

For some couples, money is treacherous territory. In close to one third of couples, one partner pays for most expenses while a slightly smaller share split everything proportionally, according to a survey conducted by Self Financial. The remaining respondents either split everything equally regardless of income or take turns covering different expenses. But that's not a key to happiness. Nearly half say their partner is creating a negative financial impact or that their partner was a bad influence on their spending and saving habits. A similar share said they would or would be more likely to break up with their partner if it would have no financial impact, or in other words, they can’t afford to break up. One-in-six say they have broken up with someone for financial reasons in the past. — Alex Tanzi

What’s Next

The consumer price index for April will be reported tomorrow.

Data on retail sales for April will be released Wednesday.

The producer price index for April also will be reported Wednesday.

US industrial production in April is set for release on Thursday.

Housing starts and building permits will be reported on Friday.

The University of Michigan’s preliminary reading of consumer sentiment for this month will be reported Friday.

Seen Elsewhere