Listen to this story.Enjoy more audio and podcasts on iOS or Android.
Your browser does not support the <audio> element.
Nikki Haley became the first woman to win a Republican presidential primary on March 3rd, when she earned 63% of the roughly 2,000 votes cast in the District of Columbia. Donald Trump’s campaign quickly sent out a press release knocking Ms Haley for being “crowned Queen of the Swamp by the lobbyists and DC insiders”. Mr Trump is busy creating a new Republican establishment anyway.
Ms Haley notched up a second win, in Vermont, on March 5th, but that came amid an avalanche of defeats. Fifteen states and one territory held primaries, with 854 of the 1,215 delegates needed to clinch the Republican nomination up for grabs. Known as Super Tuesday, the typically important day proved unusually sleepy. As expected, Mr Trump dominated, as he has throughout the primary process. The front-runner won every Super Tuesday primary but Vermont’s.
Before Ms Haley dropped out of the race on Wednesday morning, Mr Trump wrote that many of her supporters were “Radical Left Democrats” but he “would further like to invite all of the Haley supporters to join the greatest movement in the history of our Nation”. Ms Haley declined to endorse Mr Trump, who is now running unopposed and will soon officially clinch the delegates needed to become the party’s presumptive nominee.
Mr Trump did receive an endorsement from Mitch McConnell, the veteran Republican leader in the Senate and one of the last prominent holdouts. But the former president was already flexing his influence over the national party before Super Tuesday. The Republican National Committee (RNC), a 168-member body, is convening in Houston on March 7th and 8th, and merging the institution with Mr Trump’s campaign will be at the top of the agenda. Ronna McDaniel, the RNC’s chair since 2017, will finish her two-year term early after Mr Trump grew dissatisfied. Mr Trump has picked Michael Whatley, chairman of the North Carolina Republican Party, to replace her. Lara Trump, the former president’s daughter-in-law, is expected to join as co-chair. And Chris LaCivita, a top campaign official, will oversee day-to-day operations at the national committee.
Last month Ms Haley criticised these moves as premature, but presidential campaigns always integrate with the national committee eventually. “Of course he’s going to take over the building and the party,” says Sean Spicer, who worked at the RNC before joining the Trump administration. “It unifies the effort. You don’t need people swimming against the stream.”
Mr Trump was able to move faster than usual because he remains extremely popular with Republicans, and even his critics could see that only he could win the nomination. Both organisations will now co-ordinate strategy and spending that could pass $1bn. The committee traditionally focuses on get-out-the-vote operations and could take on some campaign expenses. Then there are Mr Trump’s legal bills, which continue to mount as he fights multiple criminal indictments.
Henry Barbour, a longtime committeeman, sought to pass a resolution preventing the RNC from picking up a legal tab that could run into tens of millions of dollars. He said ahead of the Houston meeting that the effort could not muster enough support even to come up for a vote by the full committee, though Mr LaCivita has said that Mr Trump will not rely on the RNC funds for legal liabilities.
A Trumpified RNC today does not guarantee one in perpetuity. The institution typically shrinks as it comes under financial pressure after presidential elections, and many Trump appointees will depart. The newly installed chair and co-chair will be up for re-election next year. Their successors will be chosen by RNC members, who generally support Mr Trump, but Republicans who have witnessed such transitions before say they can be unpredictable.
The presidential candidate will have greater influence over the future of the party by wading into congressional races. More than 90% of Trump-endorsed candidates won their primaries in 2022, and his endorsement remains potent in 2024. A Republican pursuing a US Senate seat in Montana dropped out days after Mr Trump endorsed his rival. A House Republican strategist declines to share details on discussions with the Trump campaign, but says Mr Trump wants to see the party’s majority grow: “He’s definitely a team player.”
Even a Trump loss in 2024 would not necessarily diminish the appetite for Trump-aligned populists in the future. “That is where the energy is in the party,” says Alex Conant, a Republican operative. “I expect it will remain that way for a while regardless of what happens to Trump.”
Mr Trump’s strength among primary voters should surprise no one, but some of the party’s money men have shown less enthusiasm. Many donors preferred Ms Haley or Ron DeSantis, the Florida governor whose $168m effort ended after the Iowa caucuses. Last year was the RNC’s worst fundraising year, adjusting for inflation, since 1993—and its Democratic rival brought in over $30m more. The DNC started 2024 with more than $21m cash on hand compared with just over $8m for the RNC.
Money is not all that matters. Hillary Clinton spent nearly twice as much as Mr Trump in 2016 and still lost. But in a close race, any extra advantage could decide the outcome. Mr Trump is a potent small-dollar fundraiser, but he appears to know he will need more billionaires onside.
The Club for Growth, an influential anti-tax group that fell out with Mr Trump in recent years, has begun to reconcile with him lately. Jeff Yass, a billionaire trader, gave the group’s Super PAC $10m as it sought a Trump alternative. He later donated to the Super PAC for Chris Christie, a former New Jersey governor. On March 1st Mr Trump called Mr Yass “fantastic”.
Whether Mr Trump can win over donors—and more moderate Republicans—may depend on how he adapts his tone in the coming months. Most presidential nominees undergo a shift after securing their base, adopting a more moderate message during the general election. Mr Trump has been notably more circumspect on abortion and other social issues than his Republican rivals. But his broader strategy is unlikely to change: hammering Mr Biden for his handling of immigration and the economy while pointing to increasing chaos around the world.
“Winning campaign messaging requires a few key ingredients: being simple, compelling and able to draw a clean contrast against the opposition,” says Rob Lockwood, a former RNC strategist. “Biden’s political prospects are primarily haunted by his record,” and Mr Trump can point to four years in office that polls suggest many voters recall fondly.
Mr Trump still faces the challenge of healing wounds within his own party. After Iowa, he opted for a unifying message. A week later in New Hampshire, visibly annoyed, he departed from his script and delivered a lengthy personal attack on Ms Haley. As the results came in on Super Tuesday, Mr Trump said: “We want to have unity, and we’re going to have unity, and it’s going to happen very quickly.” ■
Stay on top of American politics with The US in brief, our daily newsletter with fast analysis of the most important electoral stories, and Checks and Balance, a weekly note from our Lexington columnist that examines the state of American democracy and the issues that matter to voters.
The U.S. government is set to increase tariff rates on several categories of imported products. Some economists tracking these trade proposals say the higher tariff rates could lead to higher consumer prices.
One model constructed by the Federal Reserve Bank of Boston suggests that in an “extreme” scenario, heightened taxes on U.S. imports could result in a 1.4 percentage point to 2.2 percentage point increase to core inflation. This scenario assumes 60% tariff rates on Chinese imports and 10% tariff rates on imports from all other countries.
Price increases could come across many categories, including new housing and automobiles, alongside consumer services such as nursing, public transportation and finance.
“People might think, ‘Oh, tariffs can only affect the goods that I buy. It can’t affect the services,'” said Hillary Stein, an economist at the Boston Fed. “Those hospitals are buying inputs that might be, for example, … medical equipment that comes from abroad.”
White House economists say tariffs will not meaningfully contribute to inflation. In a statement to CNBC, Stephen Miran, chair of the Council of Economic Advisers, said that “as the world’s largest source of consumer demand, the U.S. holds all the leverage, which means foreign suppliers will have to eat the economic burden or ‘incidence’ of the tariffs.”
Assessing the impact of the administration’s full economic agenda has been a challenge for central bank leaders. The Federal Open Market Committee decided to leave its target for the federal funds rate unchanged at the meeting in March.
“There is a reason why companies went outside of the U.S.,” said Gregor Hirt, chief investment officer at Allianz Global Investors. “Most of the time it was because it was cheaper and more productive.”
U.S. President Donald Trump speaks alongside entertainer Kid Rock before signing an executive order in the Oval Office of the White House on March 31, 2025 in Washington, DC.
Andrew Harnik | Getty Images
President Donald Trump is set Wednesday to begin the biggest gamble of his nascent second term, wagering that broad-based tariffs on imports will jumpstart a new era for the U.S. economy.
The stakes couldn’t be higher.
As the president prepares his “liberation day” announcement, household sentiment is at multi-year lows. Consumers worry that the duties will spark another round of painful inflation, and investors are fretting that higher prices will mean lower profits and a tougher slog for the battered stock market.
What Trump is promising is a new economy not dependent on deficit spending, where Canada, Mexico, China and Europe no longer take advantage of the U.S. consumer’s desire for ever-cheaper products.
The big problem right now is no one outside the administration knows quite how those goals will be achieved, and what will be the price to pay.
“People always want everything to be done immediately and have to know exactly what’s going on,” said Joseph LaVorgna, who served as a senior economic advisor during Trump’s first term in office. “Negotiations themselves don’t work that way. Good things take time.”
For his part, LaVorgna, who is now chief economist at SMBC Nikko Securities, is optimistic Trump can pull it off, but understands why markets are rattled by the uncertainty of it all.
“This is a negotiation, and it needs to be judged in the fullness of time,” he said. “Eventually we’re going to get some details and some clarity, and to me, everything will fit together. But right now, we’re at that point where it’s just too soon to know exactly what the implementation is likely to look like.”
Here’s what we do know: The White House intends to implement “reciprocal” tariffs against its trading partners. In other words, the U.S. is going to match what other countries charge to import American goods into their countries. Most recently, a figure of 20% blanket tariffs has been bandied around, though LaVorgna said he expects the number to be around 10%, but something like 60% for China.
What is likely to emerge, though, will be far more nuanced as Trump seeks to reduce a record $131.4 billion U.S. trade deficit. Trump professes his ability to make deals, and the saber-rattling of draconian levies on other countries is all part of the strategy to get the best arrangement possible where more goods are manufactured domestically, boosting American jobs and providing a fairer landscape for trade.
The consequences, though, could be rough in the near term.
Potential inflation impact
On their surface, tariffs are a tax on imports and, theoretically, are inflationary. In practice, though, it doesn’t always work that way.
During his first term, Trump imposed heavy tariffs with nary a sign of longer-term inflation outside of isolated price increases. That’s how Federal Reserve economists generally view tariffs — a one-time “transitory” blip but rarely a generator of fundamental inflation.
This time, though, could be different as Trump attempts something on a scale not seen since the disastrous Smoot-Hawley tariffs in 1930 that kicked off a global trade war and would be the worst-case scenario of the president’s ambitions.
“This could be a major rewiring of the domestic economy and of the global economy, a la Thatcher, a la Reagan, where you get a more enabled private sector, streamlined government, a fair trading system,” Mohamed El-Erian, the Allianz chief economic advisor, said Tuesday on CNBC. “Alternatively, if we get tit-for-tat tariffs, we slip into stagflation, and that stagflation becomes well anchored, and that becomes problematic.”
The U.S. economy already is showing signs of a stagflationary impulse, perhaps not along the lines of the 1970s and early ’80s but nevertheless one where growth is slowing and inflation is proving stickier than expected.
Goldman Sachs has lowered its projection for economic growth this year to barely positive. The firm is citing the “the sharp recent deterioration in household and business confidence” and second-order impacts of tariffs as administration officials are willing to trade lower growth in the near term for their longer-term trade goals.
Federal Reserve officials last month indicated an expectation of 1.7% gross domestic product growth this year; using the same metric, Goldman projects GDP to rise at just a 1% rate.
In addition, Goldman raised its recession risk to 35% this year, though it sees growth holding positive in the most-likely scenario.
Broader economic questions
However, Luke Tilley, chief economist at Wilmington Trust, thinks the recession risk is even higher at 40%, and not just because of tariff impacts.
“We were already on the pessimistic side of the spectrum,” he said. “A lot of that is coming from the fact that we didn’t think the consumer was strong enough heading into the year, and we see growth slowing because of the tariffs.”
Tilley also sees the labor market weakening as companies hold off on hiring as well as other decisions such as capital expenditure-type investments in their businesses.
That view on business hesitation was backed up Tuesday in an Institute for Supply Management survey in which respondents cited the uncertain climate as an obstacle to growth.
“Customers are pausing on new orders as a result of uncertainty regarding tariffs,” said a manager in the transportation equipment industry. “There is no clear direction from the administration on how they will be implemented, so it’s harder to project how they will affect business.”
While Tilley thinks the concern over tariffs causing long-term inflation is misplaced — Smoot-Hawley, for instance, actually ended up being deflationary — he does see them as a danger to an already-fragile consumer and economy as they could tend to weaken activity further.
“We think of the tariffs as just being such a weight on growth. It would drive up prices in the initial couple [inflation] readings, but it would create so much economic weakness that they would end up being net deflationary,” he said. “They’re a tax hike, they’re contractionary, they’re going to weigh on the economy.”
Get Your Ticket to Pro LIVE
Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.
In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.
Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
A man pushes his shopping cart filled with food shopping and walks in front of an aisle of canned vegetables with “Down price” labels in an Auchan supermarket in Guilherand Granges, France, March 8, 2025.
Nicolas Guyonnet | Afp | Getty Images
Annual Euro zone inflation dipped as expected to 2.2% in March, according to flash data from statistics agency Eurostat published Tuesday.
The Tuesday print sits just below the 2.3% final reading of February.
So called core-inflation, which excludes more volatile food, energy, alcohol and tobacco prices, edged lower to 2.4% in March from 2.6% in February. The closely watched services inflation print, which had long been sticky around the 4% mark, also fell to 3.4% in March from 3.7% in the preceding month.
Recent preliminary data had showed that March inflation came in lower than forecast in several major euro zone economies. Last month’s inflation hit 2.3% in Germany and fell to 2.2% in Spain, while staying unchanged at 0.9% in France.
The figures, which are harmonized across the euro area for comparability, boosted expectations for a further 25-basis-point interest rate cut from the European Central Bank during its upcoming meeting on April 17. Markets were pricing in an around 76% chance of such a reduction ahead of the release of the euro zone inflation data on Tuesday, according to LSEG data.
The European Union is set to be slapped with tariffs due in effect later this week from the U.S. administration of Donald Trump — including a 25% levy on imported cars.
While the exact impact of the tariffs and retaliatory measures remains uncertain, many economists have warned for months that their effect could be inflationary.
This is a breaking news story, please check back for updates.