A.M. Edition for Mar. 19. A federal judge in Maryland ruled that the Department of Government Efficiency’s dismantling of USAID was likely unconstitutional, while a judge in Washington D.C. has blocked President Trump’s executive order which excludes transgender individuals from serving openly in the military. Plus, WSJ autos reporter Stephen Wilmot explains what a decades-old chicken tax has to do with the barrage of new tariffs being pursued by the Trump administration. Kate Bullivant hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the recent legal challenges to Trump's policies?
In a blow to Elon Musk, a judge rules Doge's move to dismantle USAID was likely unconstitutional. Plus, how a decades-old chicken tax sheds light on the barrage of new tariffs being pursued by the Trump administration.
What the history of the chicken tax shows is that it really means there aren't any imports of vehicles which are taxed at 25% because it's impossible to make them competitive at that level.
And Fitch Ratings adds its name to a slew of prominent forecasters downgrading the outlook for economic growth. It's Wednesday, March 19th. I'm Kate Bullivant for The Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today.
Chapter 2: Why was the transgender military ban blocked?
A federal judge has blocked the Pentagon from implementing President Trump's executive order that excludes transgender individuals from serving openly in the military, marking a major legal setback for one of the administration's policy priorities.
Judge Ana Reyes ruled the order likely violated the constitutional guarantee of equal protection and issued a preliminary injunction that halted it while litigation continues.
The government defended the policy, saying that military leadership has the broad authority to decide medical criteria for service members, while current and prospective transgender service members challenged the executive order as discriminatory. Reyes' ruling is set to go into effect Friday. The White House didn't immediately respond to a request for comment.
Meanwhile, a federal judge in Maryland has similarly ruled that the Department of Government Efficiencies move to dismantle the U.S. Agency for International Development was likely unconstitutional on multiple fronts. The ruling directed Doge to halt its work in closing down USAID and ordered it to reinstate access to electronic systems for employees and contractors who were shut out.
Chapter 3: How does Elon Musk relate to the dismantling of USAID?
The judge took particular issue with Elon Musk's role, saying the billionaire has acted as the de facto head of Doge without having been properly appointed with Senate approval, likely in violation of the appointments clause in the Constitution. The Trump administration's lawyers have maintained that Musk is a presidential advisor, giving recommendations with no binding legal effect.
Without comment on the specific ruling, Musk appeared on Fox News last night and again defended the need to cut government spending.
The reason I'm here is because I'm very worried about America going bankrupt due to the corruption and waste. And if we're going to do something about it, the ship of America is going to sink. And we're all on that ship.
White House Deputy Press Secretary Anna Kelly called the ruling against Doge a, quote, miscarriage of justice and said the government plans to appeal the decision. And setting up yet another legal fight, President Trump has fired two Democratic commissioners from the Federal Trade Commission, countering Supreme Court precedent that says the FTC's commissioners can only be removed for cause.
is the latest move in Trump's campaign to exert more control over independent government agencies. The FTC has a bipartisan structure, but Tuesday's dismissals mean only two members remain, both of whom are Republican. FTC chief Andrew Ferguson maintains that any of the FTC's commissioners can be removed by the president.
Alvaro Bedoya and Rebecca Slaughter have both called their dismissal illegal, with Bedoya saying that he will challenge it. An FTC spokesman declined to comment. In market news today, it's all about the Fed, with policymakers widely expected to keep rates on hold.
But as finance editor Alex Frangos explains, it'll be Federal Reserve Chair Jerome Powell's speech today that really matters to investors.
One of the things that people are really looking out for with Powell this week is how much is he going to talk about the economy slowing down? We're seeing it in a whole bunch of different indicators in terms of consumer sentiment and retail sales. People in all income spectrums are sort of starting to feel a little bit of a pinch.
So if he highlights that, it may indicate that his inclination is that the economy is going to need more support, need rate cuts sooner than people are expecting. On the other hand, if he highlights the risks of tariffs in terms of reigniting inflation, maybe they're not going to cut so quickly. So those are the things people are looking out for.
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Chapter 4: What is the significance of the chicken tax in current tariffs?
Fitch Ratings has added its name to a slew of prominent forecasters, downgrading the outlook for world economic growth. Its economic outlook predicts that the global trade war will reduce US and world growth, push up US inflation and delay Federal Reserve rate cuts. The US is now expected to grow 1.7% this year. well below growth rates of closer to 3% in both 2023 and 2024.
Fears of a recession in the US have grown sharply in the last month, with the Trump administration ramping up tariffs on Canada, Mexico and China, while extending tariffs to imports of steel and aluminum. Coming up, tariffs might be roiling markets and the economic outlook right now, but they're not a new phenomenon. We look at what a decades-old chicken tax tells us about Trump's tariff plans.
That story after the break. Since the 1960s, the US has imposed a 25% tariff on imported trucks, after President Lyndon B. Johnson introduced a tax hitting back at European levies on American poultry. The so-called chicken tax may be from the history books, but as the Trump administration pursues a barrage of new tariffs, Auto's reporter Stephen Wilmot explains how it shows the power of tariffs to
Chapter 5: What are the economic implications of current US tariffs?
Chapter 6: How might Federal Reserve policies change in light of economic forecasts?
Alvaro Bedoya and Rebecca Slaughter have both called their dismissal illegal, with Bedoya saying that he will challenge it. An FTC spokesman declined to comment. In market news today, it's all about the Fed, with policymakers widely expected to keep rates on hold.
But as finance editor Alex Frangos explains, it'll be Federal Reserve Chair Jerome Powell's speech today that really matters to investors.
One of the things that people are really looking out for with Powell this week is how much is he going to talk about the economy slowing down? We're seeing it in a whole bunch of different indicators in terms of consumer sentiment and retail sales. People in all income spectrums are sort of starting to feel a little bit of a pinch.
So if he highlights that, it may indicate that his inclination is that the economy is going to need more support, need rate cuts sooner than people are expecting. On the other hand, if he highlights the risks of tariffs in terms of reigniting inflation, maybe they're not going to cut so quickly. So those are the things people are looking out for.
Fitch Ratings has added its name to a slew of prominent forecasters, downgrading the outlook for world economic growth. Its economic outlook predicts that the global trade war will reduce US and world growth, push up US inflation and delay Federal Reserve rate cuts. The US is now expected to grow 1.7% this year. well below growth rates of closer to 3% in both 2023 and 2024.
Fears of a recession in the US have grown sharply in the last month, with the Trump administration ramping up tariffs on Canada, Mexico and China, while extending tariffs to imports of steel and aluminum. Coming up, tariffs might be roiling markets and the economic outlook right now, but they're not a new phenomenon. We look at what a decades-old chicken tax tells us about Trump's tariff plans.
That story after the break. Since the 1960s, the US has imposed a 25% tariff on imported trucks, after President Lyndon B. Johnson introduced a tax hitting back at European levies on American poultry. The so-called chicken tax may be from the history books, but as the Trump administration pursues a barrage of new tariffs, Auto's reporter Stephen Wilmot explains how it shows the power of tariffs to
to reshape global trade, competition and industry over decades. Stephen, take us back to the 1960s. What is the chicken tax?
Well, it all started in 1962 when what was the predecessor organization to the European Union created the Common Agricultural Policy. And that involved increasing tariffs on American poultry. And Germans in particular had been buying increasing amounts of chickens from American farmers.
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