Economy In The Next 100 Days, Ukraine Minerals Deal, India And Pakistan Tension
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Americans are increasingly worried that a recession is coming. I just feel like the best thing to do is to save and then try to stay calm. We're all sort of in the same boat. Where is the U.S. economy headed in the next 100 days? I'm Leila Faudel, that's Michelle Martin, and this is Up First from NPR News.

Ukraine has agreed to a deal with the U.S. to jointly invest in Ukraine's minerals and other natural resources. The agreement is designed as a win-win partnership, which gives us hope that such an agreement will actually be implemented in the long run. But does it include security guarantees against Russia? And soldiers are exchanging daily gunfire along the border of India and Pakistan as tensions between the countries threaten to boil over. Stay with us. We'll give you the news you need to start your day.

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When it comes to steering the U.S. economy, the Trump administration has had a rocky first 100 days. Economic output shrank during the first three months of the year. And we asked Americans how it feels to hear that news. Jeremy Rice of Lexington, Kentucky, co-owns a home decor shop called House and remembers other slumps. So first we had the housing crisis. Then we had COVID.

So we look at this as like the next battle. His shop sells faux flowers, mainly shipped from China. The business is not recession-proof. How much are people really going to be able to spend when your industry or what you offer isn't something that's like life-dependent, right? Like you don't have to have something pretty to live. Cindy Ayers-Elliott is CEO of Footprint Farms in Jackson, Mississippi. She's lost grants from the U.S. Department of Agriculture and her costs...

have gone up. It's not just automotive parts. It's also food and fertilizer and gas that you use to fuel your equipment. If it costs me more to produce, it's going to cost my neighbor or my client more to buy. Maureen Hatfield is a retired letter carrier in Haines City, Florida. She's concerned about housing and rising prices.

I manage on a limited budget, but it's tighter and tighter at the store. Like, we all joke about the price of eggs, but it really is ridiculous. So what's in store for the next 100 days and beyond? NPR's Scott Horsley is with us now to talk about the economic outlook. Good morning, Scott. Good morning. So yesterday we learned that the U.S. economy contracted during the first quarter of the year. Is the second quarter looking any better?

Not so far. The first quarter was all about people bracing for the president's trade war. April, which marks the start of the second quarter, is when those tariffs really started to bite. And that has rattled financial markets. It's also made consumers nervous that prices are going to go up.

Consumer spending has not dried up, but chief economist Greg Daco of EY Parthenon says people are being more careful about their spending, especially when it comes to things like eating out. We did see a bit of a step back in spending on restaurants and bars. And with income trends starting to cool quite significantly, that is an additional headwind for many families across the country in terms of their ability to spend on discretionary items.

As we know, consumer spending is the lifeblood of this economy. So when families start to cut back like that, it can really put the brakes on economic growth. You know, in order to spend money, people usually have to make money. So how's the job market holding up? So far, the job market's been

Very resilient. Unemployment in March was just 4.2%. We're going to get the April jobs numbers tomorrow. Forecasters expect to see some slowdown in hiring. In general, workers say they're feeling a little less confident about job security. Seth Lilliviot is in that camp. He's still working for a biotech company in San Diego, but his employer has already had two rounds of job cuts this year.

I'm anxious about the prospect of being laid off from work.

This is just the beginning. I'm like, there's going to be more. Lillivat's also a little worried about the drop in his retirement savings. The S&P 500 index is down about 7% since inauguration day. So Lillivat's being more conservative about his own spending. That means no more stopping for coffee and pastries after swim practice every week. And he has put off a little home improvement project that he had been planning for this year. I just feel like...

the best thing to do is just save and then just try to stay calm. You know, we're all sort of on the same boat. Right now that boat is getting tossed around a little bit by the economic headwind. So it's no wonder, Michelle, some people are feeling a little seasick. Yeah, how about that? You know, a lot of people say they're worried about a recession. Is that where we're headed?

Not necessarily, although the risk of a recession has certainly increased since the president launched his trade war. We've already seen a substantial slowdown in cargo traffic, especially from China, where those crippling tariffs are in effect. Gene Sirocca, who runs the ordinarily busy port of Los Angeles, says that's going to hit the paychecks of a lot of transportation and warehouse workers. We're not going to put longshoremen and

and women out of work, but they'll probably get less hours because fewer containers are coming in. The truck drivers may not haul as many boxes every day as they do right now. Global trade will slow, prices will increase, and it will impact jobs across America and the world.

Now, Greg Daco says whether we actually fall into recession could depend on whether Trump's tariffs remain in place or get watered down. Even if the tariffs are rolled back, Daco warns, we'll likely be looking at fairly sluggish growth for the rest of this year. That is NPR's Scott Horsey. Scott, thank you. You're welcome. Thank you.

Ukraine and the U.S. have agreed to a deal. They will share profits from the sale of Ukraine's critical minerals and raw materials. Both sides are calling it a win. The deal is intended to give the White House an economic motive to keep investing in Ukraine's defense and reconstruction as the Trump administration tries to broker a deal.

an end to the war. Joining us now to tell us more about this is NPR's Joanna Kakissas, who's in Kyiv, Ukraine's capital. Hello, Joanna. Thanks for joining us once again. Thanks for having me, Michelle. So how will this economic agreement work? So Ukraine's economy minister, Yulia Svitodanko, she led Ukrainian negotiations on the deal, and she said income would come from new licenses for critical minerals, things like graphite, titanium, lithium, as well as other natural resources. And she noted that Ukraine's

Ukraine and the U.S. will have equal voting rights over the investment fund and that Ukraine would keep total control of its infrastructure and natural resources. Now, U.S. mining companies are expected to make money, of course, as are other American companies if they end up being involved in Ukraine's reconstruction. Now, this just all came together just a few hours ago as we are speaking now. But from what you understand, how are Ukrainians reacting to this deal?

Well, the Ukrainians I've spoken to describe, I would describe their reaction as very guarded optimism. We spoke to Volodymyr Londa, a senior economist with the Center for Economic Strategy in Kyiv. He's been following the minerals negotiations closely for months, and he says this deal at least does not smack of colonialism. The agreement is designed as a win-win partnership, which gives us hope that such an agreement will actually be implemented in the long run.

So unlike previous versions of the deal, Landis says this version does not obstruct Ukraine on its path to the European Union. And crucially, it appears to not count previous U.S. military aid to Ukraine as debt that needs to be repaid. Does this mean that the Trump administration's relationship with Ukraine has improved?

Well, you know, some people here are sure hoping so because the relationship wasn't good to begin with. You will recall that in late February, this minerals agreement stalled when Ukrainian President Volodymyr Zelensky visited the White House and President Trump and Vice President J.D. Vance

publicly berated him for not being grateful enough for U.S. support. Zelensky had refused to sign an early draft of the minerals deal because he said it would have left generations of Ukrainians deeply in debt while giving them very little in return, especially security guarantees so Russia does not invade Ukraine again. And does this deal address any of those security guarantees?

So, Michelle, from what we know, it does not address them explicitly, though Ukrainians see the language coming out of the White House as a good sign. For example, in a statement, Treasury Secretary Scott Besant said that the agreement shows Russia that this administration wants a

free, sovereign, and prosperous Ukraine. And he added, quote, no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine. So Volodymyr Landa, the economist we heard from earlier, he says he hopes this represents a thaw in the relationship. The

The agreement could restore constructive relations between two countries by defining the format of further U.S. military and financial support to Ukraine. Now, Ukraine says these security guarantees are crucial, especially as ceasefire talks continue. Meanwhile, Russia has unilaterally declared its own three-day ceasefire starting in a week to mark the Soviet Union's victory against Nazi Germany. But the Russians say they're in no hurry to come to the negotiating table.

That is NPR's Joanna Kikis in Kyiv. Joanna, thank you. You're welcome. Thank you.

Tensions between India and Pakistan often run hot and cold, and now they're running hot after a militant attack killed 26 people in Indian-controlled Kashmir. The militants fled and a manhunt is ongoing. Since then, armies from the two countries are exchanging sporadic gunfire at the border almost every day. To explain what's going on, we've called NPR's Dia Hadid. She covers Pakistan and India from her base in Mumbai. Hello, Dia. Thanks for joining us once again.

Thank you, Michelle. So let's start here. What happened that led to this? Well, last week, gunmen opened fire on tourists in a meadow that's in Indian-controlled Kashmir. It's a territory claimed by Pakistan and India, and both countries control parts of it. But this attack was pretty harsh. Eyewitnesses reported that some gunmen asked their victims if they were Muslim, and if they weren't, they shot them. So most of the killed were Hindu men, and the attack felt visceral in this Hindu-majority nation.

Praveen Donte is from the International Crisis Group and he says that's put pressure on India to respond. The civilians, you know, 26 of them, they belong to all parts of the country and it's the first time such a big attack has been mounted on civilians. So there is a lot of anger among the Indian public. They've been begging for blood right now.

So there is pressure on India to respond with retaliatory strikes on Pakistan, but why is India blaming Pakistan for this attack? Yeah, they're blaming Pakistan because the group that claim responsibility is seen as a proxy for the Pakistani army. Now, Pakistan denies any connection and has called for a neutral investigation, but that hasn't mollified India. It quickly announced it was withdrawing diplomats, it shut down a border crossing, and it suspended a water-sharing agreement that Pakistan sees as existential to its survival.

So Pakistan's announced similar measures and it's banned trade with India. Has there been violence since the initial shootings? Yeah, Michelle, like you mentioned earlier, there's been near daily exchanges of gunfire. Residents are fleeing the area on both sides. Yesterday, Pakistan said it shot down two Indian drones and overnight it cancelled commercial flights to Himalayan areas that are close to Kashmir.

So analysts say it's now a waiting game, like Milan Vesnov. He's with the Carnegie Endowment. There is enormous pressure on Prime Minister Modi to respond with some kind of military manoeuvre. The nature of this attack crossed, I think, a threshold of brazenness that makes it politically difficult for Modi not to respond militarily. The problem is, though, it could spin out of control. Both these countries have nuclear weapons.

Now, the U.S. Secretary of State Marco Rubio has been calling on both sides to de-escalate. Is there any chance of any sign of that happening? Yeah, there could be. But you see, analysts say this is part of the problem in South Asia. There's a pattern of India and Pakistan escalating and then waiting for outsiders to de-escalate the crisis. One Pakistani columnist, Arif Anora, recently wrote about this.

India and Pakistan don't just walk into a war by accident. There is this entire expectation that somebody is going to talk us off the ledge. The talking off the ledge is the responsibility of the international community. So now we're waiting to see if Rubio can talk Pakistan and India off the ledge. That is NPR's Diya Hadid in Mumbai. Diya, thank you. You're welcome, Michelle. Thank you.

And that's Up First for Thursday, May 1st. I'm Michelle Martin. And I'm Layla Faldin. Thanks for listening to Up First. You can find more in-depth coverage of the stories we talked about today and lots more on NPR's Morning Edition, the radio show that Steve Inskeep, Abe Martinez, Michelle Martin, and I host.

Find Morning Edition on your local NPR station at stations.npr.org. Today's episode of Up First was edited by Raphael Nam, Ryland Barton, Vincent Nee, Jenea Williams, and Alice Wolfley. It was produced by Ziad Budge, Nia Dumas, and Christopher Thomas. We get engineering support from Damian Herring and our technical director is Carly Strange. We hope you'll join us again tomorrow. ♪

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