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WASHINGTON (AP) — Federal Reserve Gov. Lisa Cook will sue President Donald Trump’s administration to try to prevent him from firing her, her lawyer said Tuesday.

“President Trump has no authority to remove Federal Reserve Governor Lisa Cook,” said Abbe Lowell, a longtime Washington lawyer who has represented figures from both major political parties. “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action.”

The case is likely to end up at the Supreme Court and could more clearly define the limits of the president’s legal authority over the traditionally independent institution. The Fed exercises expansive power over the U.S. economy by adjusting a short-term interest rate that can influence broader borrowing costs for things like mortgages, auto loans, and business loans. Trump, a Republican, has repeatedly demanded that Chair Jerome Powell and the Fed’s rate-setting committee cut its rate to boost the economy and reduce interest payments on the government’s $37 trillion debt pile.

If Trump succeeds in removing Cook from the Fed’s board of governors, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables the Fed to take unpopular steps like raising interest rates. A less-independent Fed could leave Americans paying higher interest rates, because investors would demand a higher yield to own bonds to offset potentially greater inflation in the future, pushing up borrowing costs throughout the economy.

Trump appointed two members of the board, Christopher Waller and Michelle Bowman, in his first term and has named Steven Miran, a top White House economist, to replace Gov. Adriana Kugler, who stepped down unexpectedly Aug. 1. If Miran’s nomination is approved by the Senate and Trump is able to replace Cook, he would have a 4-3 majority on the Fed’s board, which votes on all interest rate decisions, along with five of the Fed’s 12 regional bank presidents.

Legal experts say the Republican president’s claim that he can fire Cook, who was appointed by Democratic President Joe Biden in 2022, is on shaky ground. But it’s an unprecedented move that hasn’t played out in the courts before, and the Supreme Court this year has been much more willing to let the president remove agency officials than in the past.

“It’s an illegal firing, but the president’s going to argue, ‘The Constitution lets me do it,’” said Lev Menand, a law professor at Columbia University and author of a book about the Fed. “And that argument’s worked in a few other cases so far this year.”

Menand said the Supreme Court construes the Constitution’s meaning, and “it can make new constitutional law in this case.”

Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week. Pulte alleged that Cook had claimed two primary residences -- in Ann Arbor, Michigan, and in Atlanta -- in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those bought to rent.

The most likely next step for Cook is to seek an injunction against Trump’s order that would allow her to continue her work as a governor. But the situation puts the Fed in a difficult position.

“They have their own legal obligation to follow the law,” Menand said. “And that does not mean do whatever the president says. ... The Fed is under an independent duty to reach its own conclusions about the legality of Lisa Cook’s removal.”

The Fed has declined to comment on Trump’s effort to fire Cook.

Trump said in a letter posted on his Truth Social platform late Monday that he was removing Cook effective immediately because of allegations she committed mortgage fraud.

Cook said Monday night that she would not step down. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in an emailed statement. “I will not resign.”

The courts have allowed the Trump administration to remove commissioners at the National Labor Relations Board, the Merit System Protection Board and other independent agencies. Yet Cook’s case is different.

Those dismissals were based on the idea that the president needs no reason to remove agency heads because they exercise executive power on his behalf, the Supreme Court wrote in an unsigned order in May.

In that same order, the court suggested that Trump did not have the same freedom at the Fed, which the court called a “uniquely structured, quasi-private entity.”

The law that governs the central bank, the Federal Reserve Act, includes a provision allowing for the removal of Fed governors “for cause.”

“For cause” is typically interpreted to mean malfeasance or dereliction of duty by an official while in office, not something done before that person is appointed, Menand said.

To establish a “for cause” firing also requires a finding of fact, said Scott Alvarez, the Fed’s former general counsel and now adjunct professor at Georgetown Law.

“We know there’s allegations by Bill Pulte, but Lisa has not been able to respond yet,” Alvarez said. “So we don’t know if they’re true. Allegations are not cause.’’

Lowell said Monday night that Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority,” adding, “We will take whatever actions are needed to prevent his attempted illegal action.”

Cook is the first Black woman to serve as a governor. She was a Marshall Scholar and received degrees from Oxford University and Spelman College, and she has taught at Michigan State University and Harvard University’s Kennedy School of Government.

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Associated Press Writers Mark Sherman and Paul Wiseman contributed to this report.

WASHINGTON (AP) — Americans’ view of the U.S. economy declined modestly in August as anxiety over a weakening job market grew for the eighth straight month.

The Conference Board said Tuesday that its consumer confidence index ticked down by 1.3 points to 97.4 in August, down from July’s 98.7, but in the same narrow range of the past three months.

The small decline in confidence was in line with the forecasts of most of the economists who were surveyed.

A measure of Americans’ short-term expectations for their income, business conditions and the job market fell by 1.2 points to 74.8, remaining significantly below 80, the marker that can signal a recession ahead.

Consumers’ assessments of their current economic situation also fell modestly, to 131.2 in August from 132.8 in July.

While the unemployment and layoffs remain historically low, there has been noticeable deterioration in the labor market this year and mounting evidence that people are having difficulty finding jobs.

U.S. employers added just 73,000 jobs in July, well short of the 115,000 analysts expected. Worse, revisions to the May and June figures shaved 258,000 jobs off previous estimates and the unemployment rate ticked up to 4.2% from 4.1%.

That report sent financial markets spiraling, spurring President Donald Trump to fire Erika McEntarfer, the head of Bureau of Labor Statistics, which tallies the monthly employment numbers.

Another government report showed that U.S. employers posted 7.4 million job vacancies in June, down from 7.7 million in May. The number of people quitting their jobs — a sign of confidence in their prospects elsewhere — also fell.

More jobs data comes next week when the government releases its August job gains and June job openings reports.

The Conference Board’s report said that references to high prices and inflation increased again and were often mentioned in tandem with tariffs.

Other government data this month showed that while prices at the consumer level held fairly steady from June to July, U.S. wholesale inflation surged unexpectedly last month. Economists say that’s a sign that Trump’s sweeping taxes on imports are pushing costs up and that higher prices for consumers may be on the way.

The share of consumers expecting a recession over the next year rose in August to the highest level since April, when Trump’s tariff rollout began.

The share of survey respondents who said they intended to buy a car in the near future rose, while those planning to purchase a home remained stable after July’s decline.

Those saying they planned to buy big-ticket items like appliances fell, but there were big variations among product categories. Respondents who said they planned to take a vacation soon, either inside of the U.S. or abroad, also declined.

NEW YORK (AP) — Low-value imports are losing their duty-free status in the United States this week as part of President Donald Trump’s agenda for making the nation less dependent on foreign goods and resetting global trade with tariffs.

An executive order signed last month eliminates a widely used customs exemption for international shipments worth $800 or less starting Friday, nearly two years earlier than the deadline set in the tax cuts and spending bill approved by Congress.

Although the president previously ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers.

Purchases that previously entered the U.S. without needing to clear customs will require vetting and be subject to their origin country’s applicable tariff rate, which can range from 10% to 50%. For the next six months, carriers handling orders sent through the global mail network also can choose a flat duty of $80 to $200 per package instead of the value-based rate.

In response, the national postal services of more than a dozen countries said they would temporarily suspend sending some or most U.S.-bound packages due to confusion over processing and payment requirements. Japan and Switzerland on Monday joined Australia, Austria, Belgium, Finland, France, Germany, India, Italy, Norway, Spain, Sweden, Denmark, Thailand, the U.K. and New Zealand in saying they would pause shipments.

The Trump administration says the exemption has become a loophole that foreign businesses exploit to evade tariffs and criminals use to get drugs, counterfeit products and other contraband into the U.S. Former President Joe Biden and members of Congress also discussed the issue.

Other countries have similar exemptions, but the threshold is usually lower. For example, 150 euros ($175) is the value limit in the 20 European Union countries that use the euro as their official currency. The U.K. allows foreign businesses to send parcels worth up to 135 pounds ($182) without incurring tariff charges.

In the U.S., the “de minimis” — Latin for lacking significance or importance — exemption started in 1938 as a way to save the federal government the time and expense of collecting duties on imported goods with a retail value of $1 or less. U.S. lawmakers eventually increased the eligibility cutoff to $5 in 1990, to $200 in 1993 and to $800 in 2015, according to the Congressional Research Service.

Since then, the number of shipments claiming de minimis treatment has exploded. A total of 1.36 billion packages with a combined value of $64.6 billion reached the U.S. last year, compared to 134 million packages sent under the exemption in 2015, the U.S. Customs and Border Protection agency reported.

About 60% of the 2024 shipments came from China and Hong Kong, according to an analysis logistics firm Flexport prepared based on U.S. government data. Multiple countries and regions accounted for the remainder, including Canada, Mexico, the European Union, India and Vietnam.

Proponents of limiting the exemption argue that it has served as a way for China-founded retail platforms like Temu and Shein to flood the U.S. with low-priced goods. The National Council of Textile Organizations said the move would help close a “backdoor pipeline for cheap, subsidized, and often illegal, toxic and unethical imports.” But some smaller American companies that rely on imported products and materials benefited from the exemption too.

Kristin Trainor is worried the end of de minimis will also mean the end of Diesel and Lulu’s, her 3-year-old boutique in Avon, Connecticut. Over 70% of the women’s clothes and accessories she stocks comes from small fashion houses in France, Italy and Spain. Trainor places small batch orders each week that fall under the $800 threshold.

“Our business model is to provide casual chic and unique clothes at affordable prices,” she said. “The added customs and duty charges that will go into effect on Aug. 29 will eliminate that affordability. ”

Trainor said she was looking to replace her European vendors with ones based in the U.S. But her bestselling product categories, such as apparel made of Italian linen, come from other countries. She estimates a simple linen sundress that cost $30 wholesale at the beginning of the year will rise to $43 next month.

After a corporate career, Trainor opened the store to have more time with her 9-year-old son and her 91-year old father. Raising the boutique’s prices to absorb part of the import charges would help offset higher shipping and logistics costs, but Trainor worries her customers will balk at higher prices.

“I have not made any official announcements to my customers just yet, although they have started to ask if I will stay open as they understand the economic impacts that are occurring,” she said. “At this point, I am leaning more and more towards closing the boutique, sadly.”

Ken Huening started CoverSeal, his business making and selling protective covers for cars, motorcycles, grills and patio furniture, in 2020. The company is based in Los Gatos, California, and the covers are manufactured in Mexico and China. When a customer places an order, it ships from Mexico.

Although a trade agreement that took effect in 2020 has made most goods from Mexico and Canada exempt from country-specific U.S. tariffs, the withdrawal of the de minimis rule applies to all countries.

Huening said he’ll either have to raise prices or end free shipping now that his products will be taxed when they are sent from Mexico to U.S. customers. He’s looked at setting up a U.S. production and logistics network but says domestic sewing facilities and textile manufacturers do not exist for the engineered fabric used in CoverSeal’s products.

“We are often asked why we don’t just establish a U.S. supply chain,” he said. “It is not possible in the short term. By the time the infrastructure is established, many companies and small businesses will be out of business.”

Shannen Knight imports hard-to-find sports goggles and glasses as the owner of A Sight For Sport Eyes, her online store and shop in West Linn, Oregon. She routinely received shipments from the U.K., the Netherlands and Italy that fell under the de minimis dollar cutoff.

Knight estimated that she would need to raise the retail price of the rugby goggles she gets from Italy by 50%. It took the International Rugby Board two years of testing to approve the Italian-made goggles, a specialty item without strong prospects for stateside production, she said.

“There are products that it just makes sense to be made internationally, where there is the stronger demand for them, but there still is some demand for in the U.S.,” Knight said.

Southwest Airlines will soon require travelers who don’t fit within the armrests of their seat to pay for an extra one in advance, part of a string of recent changes the carrier is making.

The new rule goes into effect Jan. 27, the same day Southwest starts assigning seats.

Currently, plus-size passengers can either pay for an extra seat in advance with the option of getting that money back later, or they can request a free extra seat at the airport. Under the carrier’s new policy, a refund is still possible but no longer guaranteed.

In a statement Monday, Southwest said it is updating some of its policies as it prepares for assigned seating next year.

“To ensure space, we are communicating to Customers who have previously used the extra seat policy that they should purchase it at booking,” the statement said.

It marks the latest change at Southwest, which had long been known for letting its passengers pick their own seats after boarding the plane, and for letting their bags fly for free, which ended in May. Those perks were key to differentiating the budget carrier from its rivals.

Southwest says it will still refund a second ticket under its new policy for extra seating if the flight isn’t fully booked at the time of departure, and if both of the passenger’s tickets were purchased in the same booking class. The passenger also needs to request the refund within 90 days of the flight.

If a passenger who needs an extra seat doesn’t purchase one ahead of time, they will be required to buy one at the airport, according to the new policy. If the flight is full, the passenger will be rebooked onto a new flight.

Jason Vaughn, an Orlando-based travel agent who posts theme park reviews and travel tips for plus-size people on social media and his website, Fat Travel Tested, said the change will likely impact travelers of all sizes. Southwest’s current policy helped create a more comfortable flying experience for plus-size travelers, he said, while also ensuring all passengers have adequate space in their seats.

“I think it’s going to make the flying experience worse for everybody,” he said of the new rule.

Vaughn described the change as yet another letdown for Southwest loyalists like himself, likening it to Cracker Barrel’s recent logo change that has angered some of the restaurant’s fans.

“They have no idea anymore who their customer is,” he said of the airline. “They have no identity left.”

The airline has struggled recently and is under pressure from activist investors to boost profits and revenue. It also said last year that it would charge customers extra for more legroom and offer red-eye flights.

Cracker Barrel is sticking with its new logo but apologizing to fans who were angered when the change was announced last week.

“If the last few days have shown us anything, it’s how deeply people care about Cracker Barrel. We’re truly grateful for your heartfelt voices,” the company said Monday in a statement on its website. “You’ve also shown us that we could have done a better job sharing who we are and who we’ll always be.”

Cracker Barrel took heat last week when it announced a simplified logo featuring only the chain’s name. Gone was the picture of an older man in overalls leaning against a barrel. The words “Old Country Store” were also removed.

The change was part of a wider rebrand, which has seen Cracker Barrel update its cluttered, antique-filled restaurants with lighter paint and modern furniture.

Many on social media, including Donald Trump Jr., criticized the new logo, with some threatening to boycott unless it was changed back. Sensing an opening, the rival chain Steak n’ Shake called the new logo “a cheap effort to gain the approval of trend seekers.”

“Heritage is what got Cracker Barrel this far, and now the CEO wants to just scrape it all away,” Steak n’ Shake said in a statement on X.

Cracker Barrel shares have dropped more than 10% since the new logo was introduced on Aug. 18.

On Monday, the Lebanon, Tennessee-based company emphasized that many things about Cracker Barrel won’t change, including the rocking chairs on its front porches and vintage Americana and antiques scattered throughout its restaurants.

Cracker Barrel also said it will continue to honor Uncle Herschel — the older man in the former logo, who represents the uncle of Cracker Barrel’s founder — on its menu and on items sold in its stores.

But Cracker Barrel said it also wants to make sure that the business stays fresh and attracts a new generation of customers.

“That means showing up on new platforms and in new ways, but always with our heritage at the heart,” the company said in a statement.

The company said it will also keep testing, learning and listening to its employees and customers.

Cracker Barrel shares fell less than 1% to close at $54.26 per share Monday.

Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.

The 61-page complaint filed in Texas federal court follows through on a threat that Musk made two weeks ago when he accused Apple of unfairly favoring OpenAI and ChatGPT in the iPhone’s app store rankings for top AI apps.

Musk’s post insinuated that Apple had rigged the system against ChatGPT competitors such as the Grok chatbot made by his own xAI. Now, he is detailing a litany of grievances in the lawsuit — filed by xAI and another of his corporate entities, X Corp. — in an attempt to win monetary damages and a court order prohibiting the alleged illegal tactics.

The double-barreled legal attack weaves together several recently unfolding narratives to recast a year-old partnership between Apple and OpenAI as a veiled conspiracy to stifle competition during a technological shift that could prove as revolutionary as the 2007 release of the iPhone.

“This is a tale of two monopolists joining forces to ensure their continued dominance in a world rapidly driven by the most powerful technology humanity has ever created: artificial intelligence,” the lawsuit asserts.

The complaint portrays Apple as a company that views AI as an “existential threat” to its future success, prompting it to collude with OpenAI in an attempt to protect the iPhone franchise that has long been its biggest moneymaker.

Some of the allegations accusing Apple of trying to shield the iPhone from do-everything “super apps,” such as the one Musk has long been trying to create with X, echo an antitrust lawsuit filed against Apple last year by the U.S. Department of Justice.

The complaint casts OpenAI as a threat to humanity bent on putting profits before public safety as it tries to build on its phenomenal growth since the late 2022 release of ChatGPT. The depiction mirrors one already being drawn in another federal lawsuit that Musk filed last year, alleging OpenAI had betrayed its founding mission to serve as a nonprofit research lab for the public good.

OpenAI has countered with a lawsuit against Musk accusing him of harassment — an allegation that the company cited in its response to Monday’s antitrust lawsuit. “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment,” OpenAI said in a statement.

Apple didn’t immediately respond to a request for comment.

The crux of the lawsuit revolves around Apple’s decision to use ChatGPT as an AI-powered “answer engine” on the iPhone when the built-in technology on its device couldn’t satisfy user needs. The partnership announced last year was part of Apple’s late entry into the AI race that was supposed to be powered mostly by its own on-device technology, but the company still hasn’t been able to deliver on all its promises.

Apple’s own AI shortcomings may be helping drive more usage of ChatGPT on the iPhone, providing OpenAI with invaluable data that’s unavailable to Grok and other would-be competitors because it’s currently an exclusive partnership.

The alliance has provided Apple with an incentive to improperly elevate ChatGPT in the AI rankings of the iPhone’s app store, the lawsuit alleges. Other AI apps from DeekSeek and Perplexity have periodically reached the top spot in the Apple app store’s AI rankings in at least some parts of the world since Apple announced its deal with ChatGPT.

The lawsuit doesn’t mention the potential threat that ChatGPT could also pose to Apple and the iPhone’s future popularity. As part of its expansion efforts, OpenAI recruited former Apple designer Jony Ive to oversee a project aimed at building an AI-powered device that many analysts believe could eventually mount a challenge to the iPhone.