By JOSH BOAK, Associated Press

WASHINGTON (AP) — President Donald Trump says he plans to impose tariffs on Canada and Mexico starting next Tuesday, in addition to doubling the 10% universal tariff charged on imports from China.

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Posting on Truth Social on Thursday, Trump said that illicit drugs such as fentanyl are being smuggled into the United States at “unacceptable levels” and that import taxes would force other countries to crackdown on the trafficking.

“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” the Republican president wrote. “China will likewise be charged an additional 10% Tariff on that date.”

The prospect of escalating tariffs has already thrown the global economy into turmoil — with consumers expressing fears about inflation worsening and the auto sector possibly suffering if America’s two largest trading partners in Canada and Mexico are slapped with taxes.

The prospect of higher prices and slower growth could create political blowback for Trump.

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By PAUL WISEMAN, Associated Press Economics Writer

WASHINGTON (AP) — The American economy grew at a solid 2.3% annual rate the last three months of 2024, supported by a burst of year-end consumer spending, the government said, leaving unchanged its initial estimate of fourth-quarter growth.

The outlook for 2025 is cloudier as President Donald Trump pursues trade wars, cutbacks in the federal workforce and mass deportations.

The Commerce Department reported Thursday that growth in gross domestic product — the nation’s output of goods and services — decelerated from a 3.1% pace in July-September 2024.

For all of last year, the economy grew 2.8%, compared with 2.9% in 2023.

Consumer spending advanced at a 4.2% pace from October through December.

The report shows that Trump inherited a healthy economy when he took office last month. Growth has now topped a decent 2% for nine of the last 10 quarters. Unemployment is low at 4%, and inflation has come down from the highs it hit in mid-2022.

After lowering its benchmark interest rate three times in the last four months of 2024, the Federal Reserve left it unchanged in January and appears to be in no hurry to start cutting again. Progress against inflation has stalled in recent months. At 3% in January, the year-over-year increase in consumer prices is down sharply 9.1% in June 2022 but remains stuck above the Fed’s 2% target.

President Donald Trump’s plans to impose tax imports at a scale not seen since the 1930s risks raising prices and intensifying inflationary pressure. Deporting millions of immigrants working in the country illegally, as Trump has promised, could also create labor shortages that push up wages and feed inflation.

Thursday’s GDP report was the second of three Commerce Department looks at fourth-quarter economic growth. The final estimate comes out March 27.

By MATT OTT, Associated Press Business Writer

Applications for U.S. jobless benefits rose to a three-month high last week but remained within the same healthy range of the past three years.

The number of Americans filing for jobless benefits rose by 22,000 to 242,000 for the week ending Feb. 22, the Labor Department said Thursday. Analysts projected that 220,000 new applications would be filed.

Weekly applications for jobless benefits are considered a proxy for layoffs.

The four-week average, which evens out some of the week-to-week volatility, climbed by 8,500 to 224,000.

Some analysts say they expect layoffs ordered by the Department of Government Efficiency to show up in the report in the coming weeks.

On Wednesday, senior U.S. officials set the government downsizing in motion via a memo dramatically expanding President Donald Trump’s efforts to scale back a workforce. Thousands of probationary employees have already been fired, and now the Republican administration is turning its attention to career officials with civil service protection.

Government agencies have been directed to submit by March 13 their plans for what is known as a reduction in force, which would not only lay off employees but eliminate positions altogether.

Despite showing some signs of weakening during the past year, the labor market remains healthy with plentiful jobs and relatively few layoffs.

Earlier this month, the Labor Department reported that U.S. employers added 143,000 jobs in January, significantly fewer than December’s 256,000 job gains. However, the unemployment rate ticked down to an even 4%, signaling a still very healthy labor market.

Late in January, the Federal Reserve left its benchmark lending rate alone after issuing three cuts late in 2024. Fed officials are closely monitoring inflation and the labor market for signs of a potentially weakening economy. They expect only two rate cuts this year, down from previous projections of four.

The most recent government consumer prices report that showed that inflation accelerated last month, creating some doubt about whether the Fed will be moved to cut rates at all this year.

The consumer price index increased 3% in January from a year ago, up from a 3 1/2 year low of 2.4% in September. The new data shows that inflation has remained stubbornly above the Fed’s 2% target for roughly the past six months after it fell steadily for about a year and a half.

Overall, while layoffs remain low by historical standards, some high-profile companies have announced job cuts already this year.

Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta have all trimmed their workforces already in 2025.

Late in 2024, GM, Boeing, Cargill and Stellantis announced layoffs.

The total number of Americans receiving unemployment benefits for the week of Feb. 15 fell by 5,000 to 1.86 million.

By GARY FIELDS, Associated Press

WASHINGTON (AP) — Thousands of U.S. Agency for International Development workers who have been fired or placed on leave as part of the Trump administration’s dismantling of the agency are being given a brief window Thursday and Friday to clear out their workspaces.

USAID placed 4,080 staffers who work across the globe on leave Monday. That was joined by a “reduction in force” that will affect another 1,600 employees, a State Department spokesman said in an emailed response to questions.

USAID has been one of the biggest targets so far of a broad campaign by President Donald Trump and the Department of Government Efficiency, a project of Trump adviser Elon Musk, to slash the size of the federal government. The actions at USAID leave only a small fraction of its employees on the job.

Retired United States Agency for International Development worker Julie Hanson Swanson, left, join supporters of USAID workers outside the USAID’s Bureau of Humanitarian affairs office in Washington, Friday, Feb. 21, 2025. (AP Photo/Manuel Balce Ceneta)

Trump and Musk have moved swiftly to shutter the foreign aid agency, calling its programs out of line with the Republican president’s agenda and asserting without evidence that its work is wasteful. In addition to its scope, their effort is extraordinary because it has not involved Congress, which authorized the agency and has provided its funding.

A report from the Congressional Research Service earlier this month said congressional authorization is required “to abolish, move, or consolidate USAID,” but the Republican majorities in the House and the Senate have made no pushback against the administration’s actions. There’s virtually nothing left to fund, anyway: The administration now says it is eliminating more than 90% of USAID’s foreign aid contracts and $60 billion in U.S. assistance around the world.

It’s unclear how many of the more than 5,600 USAID employees who have been fired or placed on leave work at the agency’s headquarters building in Washington. A notice on the agency’s website said staff at other locations will have the chance to collect their personal belongings at a later date.

The notice laid out instructions for when specific groups of employees should arrive to be screened by security and escorted to their former workspaces. Those being let go must turn in all USAID-issued assets. Workers on administrative leave were told to retain their USAID-issued materials, including diplomatic passports, “until such time that they are separated from the agency.”

Many USAID workers saw the administration’s terms for retrieving their belongings as insulting. In the notice, the employees were instructed not to bring weapons, including firearms, “spear guns” and “hand grenades.” Each worker is being given just 15 minutes at their former workstation.

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The administration’s efforts to slash the federal government are embroiled in various lawsuits, but court challenges to temporarily halt the shutdown of USAID have been unsuccessful.

However, a federal judge on Tuesday gave the Trump administration a deadline of this week to release billions of dollars in U.S. foreign aid, saying it had given no sign of complying with his nearly two-week-old court order to ease the funding freeze. Late Wednesday, the Supreme Court temporarily blocked that order, with Chief Justice John Roberts saying it will remain on hold until the high court has a chance to weigh in more fully.

That court action resulted from a lawsuit filed by nonprofit organizations over the cutoff of foreign assistance through USAID and the State Department. Trump froze the money through an executive order on his first day in office that targeted what he portrayed as wasteful programs that do not correspond to his foreign policy goals.

Virginia Democratic Rep. Gerald Connolly said in a statement that the attack on USAID employees was “unwarranted and unprecedented.” Connolly, whose district includes a sizable federal workforce, called the aid agency workers part of the “world’s premier development and foreign assistance agency” who save “millions of lives every year.”