On Monday, the United States stood on the brink of a trade war with Canada and Mexico. U.S. exchanges opened sharply lower, joining the global trend. By nightfall, crisis had been averted. Over the course of the day, Mexico and then Canada reached agreement with the Trump administration to pause new tariffs until at least March. The Dow managed to cut its losses and closed down 122 points while the S&P 500 lost .76 percent on the day.
Cacophonous chaos has returned to the Oval Office. It’s not just tariffs.
Donald Trump has separately launched attacks on aid to the states and birthright citizenship only to be, at least momentarily, thwarted by the courts. The president also blamed DEI for the fatal crash over the Potomac. Vengeance abounds too. Ask federal prosecutors and law enforcement; they can tell you.
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Meanwhile, the discipline of Trump’s 2024 campaign has not migrated to the West Wing. Susie Wiles, the campaign’s chief-of-staff, holds the same title at the White House but animal spirits now drive the bus.
In their rush to “flood the zone,” Trump World has already repeated the mistakes that marred the opening days of Trump’s first term. Once again, an unvetted and shoddy executive orders meet defeat in the courts. Substitute “funding freeze” for “Muslim travel ban” and you get the picture.
This time, the Office of Management Budget targeted money that Congress had already appropriated to the states. Faced with public outcry and the threat of litigation, OMB appeared to walk back its directive. Karoline Leavitt, the White House press secretary, however, took to Musk’s X to let OMB and the world know who was boss.
Her tactic backfired. Instead, she handed the court a cudgel and Trump an early defeat. On Friday, a federal district judge issued a temporary restraining order that blocked the aid cut-off. Leavitt’s social media post stood front and center.
“The President’s Press Secretary sent a statement via the X platform that said: ‘The President’s [Executive Orders] EO’s on federal funding remain in full force and effect and will be rigorously implemented.’” Beyond that, the Constitution vests the power of the purse with Congress, not the president.
Also, senior White House officials had not reviewed the paperwork before it went out the door. Instead, Mark Paoletta, OMB’s general counsel, greenlighted the directive without checking with Will Scharf, the White House staff secretary, or Stephen Miller, the deputy White House chief of staff for policy. Parenthetically, Paoletta is close to Justice Clarence Thomas and Ginni Thomas, his wife.
To top it off, Trump has unleashed Elon Musk and his minions upon U.S. Agency for International Development, and gave the world’s richest man access to sensitive payment records at the Treasury Department. Musk was the largest contributor to Trump’s reelection campaign.
Luckily for Trump and Musk, the Democrats have no agenda. Simply highlighting Trump’s stumbles isn’t enough. Like Sisyphus, Hakeem Jeffries, the House Minority Leader, continues to advance D.E.I., a losing battle if there ever was one. Chuck Schumer as a Senate Minority leader retains clout but does not inspire.
Still, the prospect of tariffs and inflation capture the attention of senior Republicans and swing voters. “Tariffs”, the fourth “most beautiful” word in Trump’s dictionary, leaves the electorate and businesses worried. More than half the U.S. opposes new tariffs in general, with opposition rising to 60 percent when it comes to Canada. The public also disapproves of Trump’s gambits to end birthright citizenship.
Unchecked, a trade war will likely lead to higher prices and interest rates with home sales a casualty. Estimates peg the levies costing each household $830, with car prices potentially rising as much as $4,000. Early on Monday, oil and gas futures spiked.
“We may have short term, some, a little pain,” Trump announced Sunday night. “And people understand that.” On the campaign trail, he spoke a lot about tariffs, pain not so much.
Beyond that, tariffs loom as a dagger aimed at swing-voters Michigan, with its 15 electoral votes, may be hardest hit. Over 165,000 Michiganders work in the auto industry. By the numbers, only Illinois imports more from Canada than Michigan, and only Texas imports more from Mexico than the Wolverine State.
U.S. auto production is integrally tied Mexico and Canada. Cars and car parts lay major roles in the economies of Alabama, California, Indiana, Kentucky, Ohio and Texas.
Fortunately for Trump and the GOP, immigration will also be on the midterm ballot. Here, the president shows surer footing. Less noticed, he recently went eyeball-to-eyeball with Venezuela and Colombia over repatriating undocumented immigrants. The other guys blinked first. Tougher border enforcement also played a key role in reducing tensions with America’s neighbors.
In the end, tougher immigration policies may be enough to help Trump and the GOP nail the “win” and retain the House in 2026. Was the 2020 election more about inflation or immigration? We may soon find out.
