The briefing for Tuesday, August 4.

Twenty-five states filed suit Monday against the Trump administration over new tariffs on 60 countries covering 99% of US imports. The tariffs, ranging from 10% to 12.5%, were imposed last month under Section 301 of the Trade Act of 1974, with the administration citing failures to combat forced labor in supply chains. New York Attorney General Letitia James called the move "an illegal attempt to raise taxes on families and businesses" after the Supreme Court struck down previous tariffs.

The lawsuit argues the tariffs are a pretext to replace import taxes invalidated by the Supreme Court in February. That ruling found President Trump lacked authority under the International Emergency Economic Powers Act to impose worldwide tariffs based on trade deficits. The administration had turned to temporary 10% tariffs after that defeat, but those expired July 24. White House spokesman Kush Desai defended the new approach, saying Section 301 provides "lawful authority" and has proven legally durable since Trump's first term.

The challenge joins two earlier lawsuits from small businesses arguing the government failed to adequately establish its case against each economy or explain how tariffs would eliminate forced labor practices. Legal experts note that while Section 301 has survived court challenges before—notably on China tariffs—the nearly identical nature of three successive tariff schemes could complicate the administration's defense. The coalition suing includes Democratic-led states from New York to California, plus Kentucky and Pennsylvania.

Attorney General nominee Todd Blanche secured confirmation after formally rescinding a controversial $1.8 billion fund for Trump allies, but an audit immunity agreement protecting the president remains in effect with new limitations. According to documents Blanche sent to Republican senators Sunday, the immunity now applies only retroactively to tax claims open when Trump's $10 billion IRS lawsuit was settled. The deal shields Trump, his sons Eric and Donald Jr., and the Trump Organization from examination of past filings.

The arrangement could eliminate what experts estimate as over $100 million in potential back taxes for Trump. It emerged from a settlement of the president's lawsuit over leaked tax returns, which a federal judge ruled in July was filed for an "improper purpose." While that ruling didn't void the immunity deal, it stated the government cannot claim the agreement resulted from legitimate legal process. Trump has appealed the decision.

Legal experts question whether the immunity violates IRS statutes barring executive interference in taxpayer audits. The law prohibits the president from starting or stopping investigations, but allows the attorney general to do so—meaning Blanche could potentially halt audits once confirmed. The immunity deal drew bipartisan criticism when initially revealed alongside the $1.8 billion compensation fund. Senators John Cornyn and Thom Tillis had withheld support over both provisions, but accepted Blanche's assurances after he eliminated the fund and narrowed the immunity's scope.

Shipping analysts say threats to oil tankers in the Middle East have reached their worst levels since the Iran conflict started, as Houthi attacks on the Red Sea compound the ongoing Strait of Hormuz blockade. Iran-backed Houthi fighters announced a blockade of Saudi Red Sea ports on July 20 and have launched multiple attacks on Saudi vessels in recent days. The UK Maritime Trade Operations agency has confirmed several incidents, creating what one analyst called "a problem stacked on top of a problem."

Traffic through the Strait of Hormuz dropped to just eight ships Sunday and 11 Saturday, compared to over 100 daily before the war, according to ship-tracking firm Kpler. About 20% of global oil and gas passed through the strait before the conflict. Many vessels now turn off transponders to avoid detection when crossing. The Red Sea had served as an alternative route for Saudi oil exports, but Houthi attacks have reduced that traffic to roughly 50% of pre-crisis levels. Ships loading crude for Asia are down to about four per day, the lowest since fighting began.

Iran denied President Trump's claim of active negotiations to reopen the Strait of Hormuz, though it confirmed talks with Oman about securing shipping lanes. Foreign ministry spokesman Esmaeil Baqaei said any agreement wouldn't lift restrictions while US "aggression" continues. Shipping giant Hapag-Lloyd said some vessels still transit the Red Sea but that restoring normal cargo flows could take three to four months even if the strait reopens, as ships have been redeployed and services suspended.

More than 20 states and the District of Columbia sued the Trump administration Monday to block new rules granting federal access to personal information of millions receiving Temporary Assistance for Needy Families benefits. The lawsuit targets regulations that would allow the Administration for Children and Families to share recipients' immigration status, Social Security numbers, and other data with other government agencies or potentially private entities. New York Attorney General Letitia James said the administration is "trying to turn antipoverty programs against the people they're supposed to serve."

The case is the latest legal battle over TANF, which provides over $16 billion in grants to states, Washington DC, and tribal governments for cash assistance, job training, and other programs for low-income families. Earlier this year, a judge prevented the administration from withholding TANF funding from several Democratic states after federal officials claimed "reason to believe" they granted benefits to people in the country illegally. A government lawyer later said the action was largely based on news reports about possible fraud.

The coalition filing suit includes New York, California, Arizona, and 18 other states plus DC, with Kentucky and Pennsylvania governors also signing on. The states argue the data-sharing rules pose privacy risks and could discourage eligible families from seeking assistance. The Administration for Children and Families declined to comment on the lawsuit. The program has come under increased scrutiny from the Trump administration as part of broader efforts to identify potential fraud in public benefit programs.

The US dollar fell sharply against the Japanese yen Monday after President Trump and Japan's finance minister confirmed coordinated market intervention by both nations. The dollar dropped from above 163 yen late last week to nearly 155.20 yen early Monday, marking an unusually large move in exchange rates. By Monday afternoon Eastern time, it was trading at 156.70 yen. Japanese Finance Minister Satsuki Katayama said her ministry purchased yen in coordination with the US Treasury and warned of further joint action if needed.

Such open acknowledgment of currency intervention is rare, with the last major example following Japan's 2011 earthquake and tsunami disaster. The prolonged yen weakness has frustrated Tokyo as high import costs and elevated oil prices squeeze Japanese consumers. Prime Minister Sanae Takaichi faces pressure to address rising living costs. A large gap between US and Federal Reserve interest rates has led investors to sell yen for higher-yielding dollar assets. Both central banks kept rates unchanged at meetings last week, maintaining that gap.

Trump said Sunday the US received "financial benefit" from the intervention, calling it a "signal of friendship" with Japan. A weaker dollar makes US goods more competitive in yen terms and could boost American exports to Japan, analysts note. Neil Newman of Astris Advisory Japan called it a "low-cost" way for Washington to support a key ally while protecting foreign exchange market stability. However, the factors driving long-term yen weakness remain, including Takaichi's push to cut sales taxes and dramatically increase government spending.

European Commission President Ursula von der Leyen called for "united action" on border security after roughly 69,500 migrants crossed from Morocco into Spain's North African exclave of Ceuta last week. The official death toll stands at 72 on the Spanish side and 11 in Morocco. EU interior ministers are holding emergency video talks Tuesday to discuss the crisis, which has strained relations among member states and prompted Italy to temporarily suspend Schengen arrangements with Spain.

Finland and Denmark backed Italy's suspension, while Czech Prime Minister Andrej Babiš urged temporarily removing Spain from Schengen. Spanish Prime Minister Pedro Sánchez expressed "serious concerns" about some European governments' responses, noting that Ceuta is not part of the Schengen area. In a letter to Sánchez, von der Leyen praised his crisis handling but warned that "protection of all our external borders is a shared European responsibility" requiring physical barriers where needed.

Von der Leyen outlined five priority areas: preventing irregular migration through partner cooperation, strengthening external borders, implementing early warning systems, dismantling smuggling networks, and reinforcing deportations. Sánchez accused traffickers of exploiting a recent Supreme Court ruling that constrained Spain's right to immediately deport sea arrivals. Interior Minister Fernando Grande-Marlaska said the situation has nearly normalized and Spain is developing an inflatable barrier to prevent water crossings. The Schengen agreement eliminates border checks across 29 European countries covering 450 million people.