Morning News Brief EPA chief Scott Pruitt resigns amid ethics questions. And U.S. tariffs are imposed on $34 billion worth of Chinese imports and China retaliates.

Morning News Brief

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We've been debating in the newsroom - is this really a trade war with China? Should we really be using that metaphor yet? Well, now we pretty much can. At 12:01 Eastern Time today, the United States fired the first shots in the trade war by imposing tariffs on $34 billion worth of Chinese goods.


And China fired the second shots. It hit American goods with equivalent tariffs. Now, this is a real economic gamble by President Trump. The world's two biggest economies are now involved in tit-for-tat trade actions.

INSKEEP: NPR's Rob Schmitz is covering this from Shanghai.

Hi there, Rob.

ROB SCHMITZ, BYLINE: Good morning, Steve.

INSKEEP: OK. So just talk us through the practicalities here. President Trump uses authority that he's been given by Congress to raise taxes - raise taxes on things that Americans import from China. China responds on American products. What happens then?

SCHMITZ: Well, then, you know, these tariffs will be passed on to consumers, both in the U.S. and China as the companies whose products are targeted stop exporting and start to scramble to find new markets for their goods. That, of course, will mean higher prices for a range of products. Eventually, this is going to have a big impact on the flow of goods worldwide as well as jobs. I spoke to a longtime Beijing attorney James Zimmerman about this today, and here's what he said what we can expect.

JAMES ZIMMERMAN: What we can expect is disruption in supply chains. We can expect job losses and a decline in investor and consumer confidence. And that's going to impact the stock market. And the impact on U.S. business is going to be - in my opinion, will be substantial.

INSKEEP: I'm glad that he mentioned supply chains, Rob, because it's not that China sells me directly a product as a consumer. They're selling something to an American company. The product might even go back and forth between the U.S. and China and other countries several times. So how will U.S. businesses be affected here?

SCHMITZ: Well, I've spoken to folks in the U.S. business community here. And they're telling me that China's government is already targeting their products in ways that sort of go beyond tariffs in unofficial ways. You know, they've seen customs officials inspecting more shipments of U.S. goods, slowing down business in other ways. On the Chinese side, China's government is now targeting Chinese tourism to the U.S. The Chinese Embassy in Washington has issued a warning to Chinese tourists to be careful of shootings in the U.S., to watch out for customs agents, robberies and things like that. It's a clear message from them that Beijing has the power to prevent its tourists, as well, from spending money in the U.S.

INSKEEP: Oh, it's kind of like the soft equivalent of a tariff...


INSKEEP: ...To respond on U.S. tariffs.

So how does this end - suppose it could end well. How would it end well? What is the best scenario here?

SCHMITZ: Well, I suppose the best scenario would be for China to say, yes, you're right. We'll give in and start treating U.S. businesses fairly and stop forcing them into joint ventures and stop requiring them to transfer their technology to China. But, you know, that's not really what's happening here. China is responding, as we've seen, with equivalent tariffs. And it's made no discernible moves towards changing these policies that seem to anger the Trump administration.

INSKEEP: Where you are in China, how are people on the streets or on social media or elsewhere responding?

SCHMITZ: I think there's a lot of confusion, Steve. You know, the Trump administration fired the first shot in this trade war. China's government insisted it's being forced to retaliate. So Chinese people I've spoken to say that this is U.S. aggression against China. And at least in urban China, you know, these are people who drive American cars. They wear clothes with U.S. labels. They use iPhones, and they use iPads on a daily basis. So they're thinking, look, you know, we're buying American goods. Why is America targeting us? And that confusion can easily lead to a sense of anti-Americanism if this trade dispute gets worse.

INSKEEP: NPR's Rob Schmitz in Shanghai, thanks.

SCHMITZ: Thanks.


INSKEEP: Scott Pruitt is out as head of the Environmental Protection Agency. President Trump announced on Twitter late yesterday that he has accepted Pruitt's resignation.

KING: Pruitt faced and still faces a long list of ethics controversies and investigations over a sweetheart deal on a condo, lavish spending on office furniture, excessive security costs, nepotism and more.

INSKEEP: NPR's Nathan Rott joins us to talk this through.

Hi there, Nathan.


INSKEEP: I thought until - just the other day, President Trump was saying that Pruitt was doing a great job.

ROTT: He was even saying it yesterday. Even in announcing the resignation - on Twitter, naturally - Trump made a point to praise Pruitt for the, quote, "outstanding job" he's done at the agency. He repeated that comment on Air Force One last night. But the White House, Congress and government watchdogs had also launched more than a dozen investigations into this long, seemingly ever-growing drip, drip, drip of alleged ethical lapses by the administrator. And Pruitt, in his resignation letter to the president, said those, quote, "unrelenting attacks on me personally, my family are unprecedented and have taken a sizable toll on all of us."

INSKEEP: Well, let's talk about the job he did at the agency. I guess he leaves behind a $43,000 soundproof booth that he had...

ROTT: (Laughter).

INSKEEP: ...The government pay for, for his private phone calls. I guess he leaves behind improved office spaces and a record of first-class air travel and so forth. But what about substantively, on the issues? What did he do at the agency?

ROTT: Well, I think that's hard to say, really. From a policy perspective, you know, I think Scott Pruitt will be proud of the legacy that he left behind. I mean, he initiated efforts to undo a number of environmental policies that Trump railed against during his campaign and conservatives have had bemoaned for many years, changes that oil and gas companies and certainly parts of the country wanted to see. He decreased environmental enforcement. He sped up environmental reviews. He rolled back what he and some of the others portray as overly burdensome regulations to address air and water pollution.

But the reason I say it's unsettled is because there's a huge caveat here, which is that a lot of these rollbacks that Pruitt initiated, this deregulatory legacy that I'm sure he wants to be remembered by, is still very much unsettled. Getting rid of these regulations takes a lot of time, years in some cases.

INSKEEP: Is his successor going to take that time?

ROTT: Absolutely. I mean, that's the expectation. Andrew Wheeler, who Trump says is taking over as interim head of the agency on Monday, is very much in line with Pruitt's deregulatory agenda. Most recently, he worked as a lobbyist for energy companies, a coal company. Christine Todd Whitman, who headed the EPA under President George W. Bush, told our colleagues at All Things Considered yesterday that she worries that Andrew Wheeler also shares Pruitt's dismissiveness of sound science.


CHRISTINE TODD WHITMAN: The willingness to wholeheartedly accept whatever industry said - industry should be heard, but that can't be the only voice at the table. And that, I'm afraid - I hope it will change with acting Administrator Wheeler. But, you know, there are no guarantees.

ROTT: So I think, yeah, really, the - everyone, including the president, is expecting him to come down and continue the path that Pruitt started.

INSKEEP: NPR's Nate Rott, thanks very much.

ROTT: Yep.


INSKEEP: Now, while Scott Pruitt walked away voluntarily, apparently, from his government job, others are losing their jobs involuntarily.

KING: Yeah. These are immigrants who joined the U.S. Army. They'd enlisted on the promise of a fast track to citizenship. And now they're being abruptly discharged. The Pentagon, which is facing lawsuits over this, says it cannot explain why.

INSKEEP: Reporter Martha Mendoza of The Associated Press broke this story with a colleague. She's on the line from Santa Cruz, Calif.

Welcome to the program.


INSKEEP: So who are these 40 or so immigrants you've identified?

MENDOZA: They are from Pakistan, Iran, Brazil, all over the world. These are people who came to the United States and wanted to serve the country and found an honorable way to have a path to citizenship.

INSKEEP: And you point out in your story, this is something that thousands of people have done for years. They have served honorably. One was named the Army's Soldier of the Year a few years back, valuable people. But these are people who had not - what? - gotten very far into the process. Is that right?

MENDOZA: Well, they were actually years into it. But they had not made it to basic training - that's correct - because they had onerous background checks put upon them, first under Obama and then under Trump, that involves CIA, FBI counterintelligence interviews and more that they needed in order to make it past enlistment and into basic training.

INSKEEP: So why would the Pentagon, after they've gone through all that, be letting them go?

MENDOZA: Well, I wish I knew the answer to that. But the Pentagon has been unable to respond or unwilling to respond. We've asked them repeatedly, and they say that because one of the recruits is suing that they cannot respond. There's pending litigation.

INSKEEP: So we don't know that there's a policy change. We don't know that this program has been ended. We just...

MENDOZA: It appears there's a policy change. And that is because there are so many - dozens and dozens - from many immigration attorneys, who are telling us that their clients are telling them that they have been discharged from the military after months or even more than a year of service because of this.

INSKEEP: We've had reporting about some people like this in the past. And it's pointed out they've taken an oath of service to the United States, which is going to make it hard for them to return to their home countries, particularly if they're authoritarian countries like China.


INSKEEP: What are the immigrants saying about their situation?

MENDOZA: Oh, my goodness - they're just devastated. I'm talking to young men and women who are devastated because they love the United States. They want to do honorable service. They thought that doing this service and working in the U.S. military was a really honorable path to citizenship. And they are broken-hearted. And midway through their service, they're being told that it's not good enough. They're not - yeah.

INSKEEP: Martha Mendoza of The Associated Press. Thanks for the reporting - really appreciate it.


INSKEEP: She's reporting on news of immigrants discharged from the United States Army.


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