Up First from NPR - Economy In The Next 100 Days, Ukraine Minerals Deal, India And Pakistan Tension

Episode Date: May 1, 2025

The US economy shrank in the first three months of the year and economists say the months ahead could also be challenging. Ukraine signed a deal with the US to jointly invest in Ukraine's minerals and natural resources, and tensions are high between India and Pakistan after last week's deadly attack in Indian-controlled Kashmir.Want more comprehensive analysis of the most important news of the day, plus a little fun? Subscribe to the Up First newsletter.Today's episode of Up First was edited by Rafael Nam, Ryland Barton, Vincent Ni, Janaya Williams and Alice Woelfle. It was produced by Ziad Buchh, Nia Dumas and Christopher Thomas. We get engineering support from Damian Herring. And our technical director is Carleigh Strange.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hey, it's Leila. One thing before we start the show, when you listen to Up First and anything else from the NPR network, you're listening to public media. Meaning, it serves the public with nonprofit, independent journalism, the shows you love, and the conversations that keep you company. There are a lot of ways to get your news, but public media is unique. It's accountable to you, freely accessible, and full of voices and stories you can't find anywhere else. Public media giving days are here. It's a

really good time to support this vital resource that you and millions of people around the country rely on. If you don't give already, do it today. Just visit donate.npr.org. Thanks so much. 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 Fadl, that's Michelle Martin, and this is Up First from NPR News. I'm 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. This message comes from WISE, the app for doing things and other currencies. With

WISE, you can send, spend, or receive money across borders, all at a fair exchange rate. No markups or hidden fees. Join millions of customers and visit WISE.com. T's and C's apply. Does the idea of listening to political news freak you out? Well, don't sweat it. The NPR Politics podcast makes politics a breeze. Every episode will break down the day's headlines into totally normal language and make sure that you walk away understanding what the day's news might mean for you. Take a deep breath and give politics another chance with the NPR politics podcast available wherever you get your podcasts. When it comes to steering the US 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 US 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 gonna 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 Dachau 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 lifeblo 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 percent. We We're gonna 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 Lilavidot 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. Lillevivot'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 Lillevivot'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 to save and then just try to stay calm. We're all sort of on the same boat. Right now that boat is getting tossed around a little bit by the economic headwinds. 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 Soroka, who runs the ordinarily busy port of Los Angeles, says that's gonna hit the paychecks of a lot of transportation and warehouse workers. We're not gonna put longshoremen 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 Dachau 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, Dachau warns, we're likely to be looking at fairly sluggish growth for the rest of this year. That is NPR's Scott Horsey. Scott, thank you.

You're welcome. Ukraine and the US 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 an end to the war. Joining us now to tell us more about this is NPR's Joanna Kakissis, 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 Svitidenko, 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 and the U.S. will have equal voting rights over the investment fund and that Ukraine would keep total control of its infrastructure 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 Landa, a senior economist with the Center for Economic Strategy in Kiev. 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 US 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 JD Vance Publicly berated him for not being grateful enough for US 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 Bessent 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 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 there are no hurry to come to the negotiating table.

That is NPR's Joanna Kakissis in Kiev. Joanna, thank you. You're welcome. Tensions between India and Pakistan often went 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 Diya Hadid. She covers Pakistan and India from her base in Mumbai. Hello, Diya. 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 paying 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 maneuver. 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 US Secretary of State Marco Rubio has been calling on both sides to de-escalate. Is there any chance of that 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, Araf Anur, 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 of 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. And that's Up First for Thursday, May 1st. I'm Michelle Martin. And I'm Leila Faldon. 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 Steven Schaep, A. Martinez, Michelle Martin and I host. Find Morning Edition on your local NPR station at stations.mpr.org. Today's episode of Up First was edited by Raphael Naam, Rylan Barton, Vincent Nee, Janaya Williams and Alice Wolfley. It was produced by Zia Butch, Nia Dumas and Christopher Thomas. We get engineering support from Damian Haring and our technical director is Carly Strange. We hope you'll join us again tomorrow.

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