Today's Headlines

STATE

Tariffs creating uncertainty in Texas as report shows slower revenue growth since late 2024

Texas local businesses reported slower revenue growth since late last year, sparking uncertainty over President Donald Trump's policies on tariffs and concerns of a possible recession, according to a report released by the Federal Reserve Bank of Dallas on Thursday.

As the nation's leading trade state, Texas has been significantly impacted by the higher tariffs on imports from Mexico, Canada, and China imposed earlier this year by Trump's administration.

"The uncertainty index for both manufacturers and service sector companies jumped in March to levels not seen since late 2022, during the height of the pandemic," the Dallas Fed Texas Business Outlook Surveys (TBOS) report stated.

Nearly half of Texas businesses surveyed expressed concerns that rising costs could reduce consumer demand and push the state into a recession. Among those hit hardest are manufacturers, many of whom reported difficulties maintaining production levels. The Texas service-sector was also affected: its revenue growth has been declining since late 2024, reaching zero by March, according to TBOS respondents.

The Trade Partnership Worldwide, an international research firm, estimates that the tariffs could cost Texas businesses $47 billion and cut the state's gross domestic product (GDP) growth by 1.5 percentage points. Researchers predict that this decline in economic growth could lead to the loss of approximately 100,000 jobs.

Tony Payan, the executive director of the Center for the U.S. and Mexico at Rice University's Baker Institute for Public Policy, said that tariffs are "going to hit Texans very hard."

"We have to remember that 40% to 50%, depending on the season, of our agricultural produce comes from Mexico," said Payan. "Tariffs on cucumbers or strawberries or avocados, other Mexican fruits and vegetables, they have no easy and quickly available import substitution opportunity. So inflation is going to be very hard to control."

Texas sues San Antonio over abortion funding

On Thursday night, a divided San Antonio City Council voted 6-5 to spend $100,000 on helping residents travel out of state to get abortions.

Less than 24 hours later, Attorney General Ken Paxton sued in state court, arguing San Antonio is "transparently attempting to undermine and subvert Texas law and public policy." The lawsuit alleges that the fund violates the gift clause of the Texas Constitution, and requests a temporary injunction blocking the funding allocation.

The lawsuit is not unexpected: Paxton previously sued the City of Austin over a similar fund.

San Antonio originally allocated $500,000 for a Reproductive Justice Fund in 2023, in response to Texas' near-total ban on abortion. After much debate, and a private lawsuit, the money was spent on non-abortion related reproductive health initiatives, like contraception, testing for sexually transmitted infections and health workshops.

But this recent addition of $100,000 was narrowly approved to be spent specifically on abortion travel, the San Antonio Express-News reported. Some council members opposed the measure due to anti-abortion sentiment or a fear of being sued, while others said it was a necessary step to support people who were being harmed by the state's abortion laws.

Texas Education Agency can release schools' 2023 performance ratings, appeals court rules

A state appeals court has ruled the Texas Education Agency can release its 2023 ratings of the state's school districts, overturning a previous injunction in a legal battle that has stretched 19 months.

The 15th Court of Appeals — all Republicans appointed by Gov. Greg Abbott — argued on Thursday that TEA Commissioner Mike Morath did not overstep his authority when he changed the college readiness metrics that help determine schools' performance ratings.

"It is not our role as judges to decide whether the Commissioner's decisions were necessary or fair. The Districts' burden … was to show the Commissioner acted 'without legal authority,' not that he should have exercised his discretion another way," Chief Justice Scott Brister wrote in an opinion for the court.

A separate lawsuit over the schools' 2024 ratings is still waiting a decision from the same appeals court.

NATION

Trump tariffs prompt retaliation, plunging stocks, auto plant shutdowns

DETROIT — The aftershocks from President Donald Trump's "reciprocal" tariffs have reverberated around the globe as trade partners unveiled retaliatory tariffs, stock market indices plunged and automakers announced plant shutdowns and other production changes.

Tariffs of 25% on vehicles imported into the United States began being collected Thursday, and "Liberation Day" duties of at least 10% on dozens of countries start Saturday. The president insists they will spur economic growth from boosted U.S. production, new factories and more well-paying manufacturing jobs. But economists have warned that the widespread nature of the levies could send the country into a recession, with Michigan bearing a disproportionate share of the burden.

The Dow Jones Industrial Average on Thursday had its largest wipeout since 2020, down nearly 4%. The S&P 500 and Nasdaq were down an even larger percentage. Automotive stocks also sank: General Motors Co. closed down 4.3%, Ford Motor Co. down 6%, Stellantis NV down 9.4%, Tesla Inc. down 5.4% and Toyota Motor Corp. down 5.2%. Markets continued to slide on Friday.

If uncertainty and whiplash have marked the rollout of Trump's new trade policies, the auto industry's varied actions following the auto tariffs taking effect may appear just as chaotic. Stellantis NV on Thursday said it's temporarily shutting down assembly plants that make minivans, muscle cars and some Jeep SUVs in Windsor and Toluca, Mexico, affecting feeder plants in Michigan and Indiana.

General Motors Co. said it's adding production at its full-size truck assembly plant near Fort Wayne, Indiana, hiring hundreds of temporary workers. A Mercedes-Benz Group AG executive told Bloomberg it's considering making more vehicles in the United States and weighing whether to pull its least expensive cars like the GLA small SUV from the U.S. market.

Fed chairman warns Trump tariffs risks higher inflation, slower growth

ARLINGTON, Va. — Federal Reserve Chairman Jerome Powell said Friday that President Donald Trump's "Liberation Day" global tariffs will lead to "higher inflation and slower growth" in the coming months.

"While tariffs are highly likely to generate at least a temporary rise in inflation, it's also possible that the effects could be more persistent," Powell said at a conference of business journalists in suburban Washington.

Powell cautioned that the Federal Reserve board will wait to see how Trump's tariff policies get implemented to decide whether to adjust interest rates.

"To me, it's not clear what the appropriate path for monetary policy will be," Powell said. "And we're going to need to wait and see how this plays out before we can start to make those adjustments."

Trump says he will extend TikTok's sell-or-be-banned deadline

With a deadline to sell itself or be banned in the United States just hours away, TikTok got another last-minute reprieve from President Donald Trump on Friday.

"My Administration has been working very hard on a Deal to SAVE TIKTOK, and we have made tremendous progress," Trump wrote on Truth Social. "The Deal requires more work to ensure all necessary approvals are signed, which is why I am signing an Executive Order to keep TikTok up and running for an additional 75 days."

Trump also said that China was "not very happy" about the steep tariffs he announced this week, which he said were necessary for fair and balanced trade between the two countries.