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By Eli Okun |
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THE CATCH-UP |
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Headwinds from war and tariffs may revive the economic storm clouds that had somewhat cleared earlier in the summer for President Donald Trump. | Kevin Dietsch/Getty Images |
TRADING PLACES: President Donald Trump’s love for tariffs is a decades-long core belief, one that he keeps finding ways to reconstitute despite legal and market blowback. But for Republicans concerned about fallout from high prices, today’s new levies come at a politically fraught moment. They’re the first new major regime of tariffs since the Iran war began — the last batch were imposed just a week before bombs started falling — and they could run the risk of doubling up on inflationary pressures. Today’s tariffs impose 10 to 12.5 percent surcharges on goods from several dozen countries, including top U.S. trading partners and allies. The administration’s justification for these tariffs, levied under Section 301 of the Trade Act of 1974, is that other countries have failed to sufficiently address forced labor in their supply chains. Some countries could see their rates rise as U.S. investigations continue, though others have carveouts for particular hard-to-access goods. For economists — and Americans struggling with the cost of living — one big question is whether this round of tariffs and other new levies coming down the pike will exacerbate inflation. Month after month in 2025, inflationary effects from Trump’s early tariffs fell short of economists’ fears, as the U.S. economy proved remarkably resilient. The same could prove true with the Section 301 levies, which still leave many countries with lower overall rates than they faced last year. But other taxes loom after Trump recently threatened longer-term tariffs on Canada and generic drugmakers. At the same time, the war’s inflationary effects are already straining Americans’ pocketbooks and endangering Republicans’ midterm prospects. The combined economic headwinds may revive the storm clouds that had somewhat cleared earlier in the summer during the U.S.-Iran ceasefire, as a flurry of recent tariffs pile on higher costs for Americans, NYT’s Tony Romm reports. “Global Inflation Angst Is Back,” read Bloomberg’s headline this morning. Gas prices in particular could quickly get worse for Americans if the war spirals, POLITICO’s James Bikales reports. Threats to oil tankers on multiple routes beyond the Strait of Hormuz and the exhaustion of temporary measures to help ease prices could all coalesce to push Brent crude higher. The U.S. and U.K. may try to bring together a coalition next week to protect ships in the strait, Axios’ Barak Ravid scooped. Outside the U.S., Trump’s new forced labor tariffs earned a round of global ire from the countries targeted. “Completely unjustified,” Australia said. “Extremely disappointing,” New Zealand added. “Not really grounded,” the EU commented. “Regrettable,” Japan complained. And so on, around the world. More reactions from the AP Ultimately, the war is still the greatest inflationary threat. Higher bond yields are the latest warning sign — one that’s gotten Trump to back down from past economic gambles. At the U.S.-Canada border, tariff disputes shadowed what might have been a big moment in neighborly diplomacy. The Gordie Howe Bridge opened this morning to connect Windsor, Ontario, and Detroit at the continent’s busiest international border crossing, a crucial pathway for commerce. Decades in the making, the multibillion-dollar project will provide toll revenue to both countries. But after Trump announced his new Canada tariffs this week, U.S. officials were disinvited from the ceremonial opening. The snub “is fine,” Trump wrote on Truth Social this afternoon, “considering they are paying substantial TARIFFS to the United States, but the original Deal on the Bridge, which was terribly negotiated by a previous Administration, no longer stands.” Happy Friday afternoon. Thanks for reading Playbook PM. Drop me a line at eokun@politico.com.
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A message from Anthropic: Helping a Boston restaurant owner support his team
Running a restaurant means financial pressure and moving parts. At Shy Bird, owner Eli Feldman uses Claude to help solve problems from kitchen organization to manager coaching, so he can give more to the people who make the restaurant run. Learn more. |
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6 THINGS YOU NEED TO KNOW |
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1. THE LONG TAIL OF JOE BIDEN: Eight years after South Carolina saved Biden’s 2020 presidential campaign, and four years after he selected it to go first in the 2024 lineup, the Palmetto State looks like it’ll hold down the position in 2028. A DNC committee today voted for South Carolina to be the first state in the early-voting primary bloc, POLITICO’s Aaron Pellish reports. It narrowly edged out Nevada in a debate that at times centered on concerns about empowering Black voters vs. Latino voters. Some Dems also worried about Nevada’s pace of reporting results. Along with those two, the committee picked Michigan (sorry, Iowa) and New Hampshire as early-voting states, with two more — likely New Mexico and Virginia — potentially joining them in the window. Whether New Hampshire accepts being relegated to third or fourth remains to be seen. 2. TRAIL MIX: Rep. Byron Donalds (R-Fla.) is getting a big boost of support for his gubernatorial bid in the form of a $10 million check from billionaire megadonor Ken Griffin, NBC’s Matt Dixon scooped. It’s the frontrunner’s biggest contribution yet. Declaration of independents: Former Sen. Joe Manchin (I-W.Va.) and Heather Manchin announced the creation of the Independent Leadership Council, a new effort to bolster independent candidates, per CNN’s Patrick Svitek. Manchin’s return to the political fray is “not trying to start another party,” he said, but instead an attempt to recruit and potentially campaign for and fund independents around the country. A launch event included Rep. Kevin Kiley (I-Calif.), Seth Bodnar and Michael Bridgford, with possible Alaska and Washington candidates on the way. The surprise senator: NYT’s Emily Davies has the detailed backstory of how Darline Graham suddenly became not only South Carolina’s newest senator but Trump’s pick to run for a full term. Graham was well respected as a disability rights advocate, personally focused on family and religion, but her politics were little known when she was thrust into the spotlight after brother Lindsey’s death. Trump, too, was grieving — uncharacteristically emotional over Lindsey Graham’s death — and “impressed by her composure.” Despite initially leaning toward Rep. Russell Fry, he quickly backed Graham. Read POLITICO’s Sabrina Lam and Alex Gangitano on the world leaders angling to meet with Trump around Lindsey Graham’s funeral 3. WAR REPORT: Attacks kept coming in the Middle East today as Iran targeted drones at U.S. military assets in Bahrain, Jordan and Kuwait. U.S.-led forces also brought down drones over Iraq. But Trump is not placing blame on Chinese President Xi Jinping or Russian President Vladimir Putin: Though both are partners of Iran, Trump takes the leaders at their word that they’re “not participating” in the war, he wrote on Truth Social today. Meanwhile, Israeli PM Benjamin Netanyahu’s office said he’ll travel to Washington and meet with Trump on Tuesday. The impact in Iran: For many ordinary Iranians, months of stop-start war and economic crisis have made daily existence — let alone future planning — hazardous and at times near-impossible, NYT’s Leily Nikounazar and Erika Solomon report. “Many Iranians have been left feeling that their lives are on hold or are no longer their own.” 4. VENEZUELA LATEST: How to rebuild earthquake-devastated Venezuela without burdening American taxpayers? As the Trump administration essentially runs the country, it’s now working with Venezuelan leaders to try to thaw Caracas’ frozen offshore billions, Bloomberg’s Patricia Laya and Eric Martin scooped. The idea to unfreeze money tied up with the IMF, the Bank of England and elsewhere could help politically unpopular acting President Delcy RodrÃguez’s government lead more recovery work. But the U.S. would want to keep a close eye on disbursals. 5. BILL OF HEALTH: The U.S. has notched an unhappy disease milestone, the CDC said today. With nearly half the year still to go, 2026 measles cases have already hit their highest level since the country reached measles elimination status decades ago. Ninety-three percent of cases occurred in unvaccinated people. More from USA Today RFK Jr. victory: An FDA advisory panel that is wrapping up two days of meetings today recommended expanding access to several peptides, siding with advocates like HHS Secretary Robert F. Kennedy Jr. despite concerns from mainstream doctors and scientists that the gray-market substances are unproven. The committee rejected one of the peptides. More from POLITICO’s Lauren Gardner The Overton window: “The White House’s MAHA Gatekeeper,” by The Atlantic’s Michael Scherer and Tom Bartlett: White House health policy official Heidi Overton “is one of the most powerful public-health officials in Trump’s orbit who has little public profile. … Overton’s detractors describe her as one of the biggest obstacles to MAHA actually realizing its priorities … They accuse her of slow-walking marijuana rescheduling,” and “trying to limit MAHA changes to federal nutrition guidelines.” “Leaders of the West Wing and HHS … have rushed to her defense, describing her as a star scientific wonk with a medical degree and a doctorate in clinical investigation who knows how to balance competing interests to achieve Trump’s goals. ‘The president adores her,’ White House Press Secretary Karoline Leavitt told us.” 6. AFTERNOON READ: “Fusion is Ready. Is Trump’s Washington?” by POLITICO Magazine’s Joe Schatz in Devens, Massachusetts: “The [industry’s] challenge: Persuading not only the public and the market, but administration officials and congressional leaders, that a breakthrough is right around the corner — justifying an even bigger infusion of taxpayer money. And that if the United States doesn’t do that, China will get there first.”
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A message from Anthropic:  
Helping a Boston restaurant owner support his team
Running a restaurant comes with pressure. At Shy Bird, Claude helps Eli Feldman do more for his team. Learn more. |
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TALK OF THE TOWN |
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PLAYBOOK DESIGN SECTION — Trump’s plan to paint the Eisenhower Executive Office Building white doesn’t sit well with WaPo art and architecture critic Philip Kennicott, who argues that it could damage the stone for good and undermine the system of historic and environmental reviews. (The White House says it “conducts all necessary due diligence.”) OUT AND ABOUT — British Ambassador Christian Turner and Claire Turner, Spotify’s Dustee Jenkins and White House Correspondents Insider founder Tammy Haddad hosted a reception in honor of White House Correspondents’ Association President Weijia Jiang at the ambassador’s residence last night. The event closed with a surprise set by DJ Jazzy Jeff. SPOTTED: Rep. Nicole Malliotakis (R-N.Y.), Sean Cairncross, Kellyanne Conway, Patrick Witt, Chris Klomp, Alex Flemister, James Van Den Berg, Mike Caswell, Senay Bulbul, Rima al-Sabah, Tom Cibrowski, Mark Ein, Nancy Cordes, Jonathan Karl, Margaret Brennan, Jacqui Heinrich, Andrea Mitchell, Wolf Blitzer, Nick Bilton, Jennifer Griffin, Shawn McCreesh, Josh Dawsey, Tyler Pager, Sumi Somaskanda, Leigh Ann Caldwell, Sally Quinn, Michael Beschloss, Adrienne Arsht, Susan Blumenthal, Kinsey Fabrizio, Katie Pavlich, Dmitri Alperovitch, Maureen Hinman, Stephanie Cutter, Susanna Quinn, Liz Bourgeois, Alexandra Veitch, Katelyn Bledsoe, Jasmine Wright, Jeff Mason, April Boyd, Jeanne Moran, Dominique Yelinski, Marisa Schultz, Olivia Igbokwe, Mario Parker, Colin Moneymaker, Cat Zakrzewski, T.W. Arrighi, Doug Heye, and James and Melissa Braid. — The National Italian American Foundation honored Andrew Giuliani at Ristorante i Ricchi last night for his role as executive director of the White House Task Force on the 2026 FIFA World Cup. SPOTTED: Mark Paoletta, Jarrod Agen, Gustav Chiarello, Gregory Barbaccia, Rosario Palmieri, Gregory LoGerfo and Anita McBride. Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us on Signal here. Playbook couldn’t happen without our editor Giuseppe Macri and deputy editor Garrett Ross.
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