MNI POLITICAL RISK - Cracks Emerge In Trump's Coalition

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Executive summary:

• President Donald Trump will meet Israel's Prime Minister Benjamin Netanyahu today to discuss trade and conflict in the Middle East.
• Trump’s 10% universal baseline tariff took effect on Saturday. Trump’s ‘reciprocal tariffs’ kick in on Wednesday. China’s retaliatory measures snap in on Thursday. Sector-specific US tariffs are in the pipeline.
• Trump gave no indication he is preparing an offramp to ease market turbulence, characterising his hardline trade agenda as “medicine” to prolonged imbalances.
• If you squint, you can see a slight split emerging between the more dogmatic members of Trump’s administration - Commerce Secretary Howard Lutnick, trade advisor Peter Navarro, White House aide Stephen Miller - and those seen as more pragmatic - Treasury Secretary Scott Bessent and NEC Director Kevin Hassett.
• Elsewhere in the Trump coalition, the cracks are more evident. Elon Musk posted a video extolling the benefits of free trade. Bill Ackman warned Trump against launching “economic nuclear war” on April 9. Tech stocks in San Francisco have cratered, which is likely to augur poorly with the tech right.
• Senate and House Republicans are beginning to fear a wipeout at the 2026 midterms. There are several pieces of legislation to watch in the coming weeks if Republican lawmakers opt to rein in some of Trump’s power. 
• The House of Representatives returns today with a week to endorse the compromise budget blueprint adopted by the Senate last week.

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