| | | |  | | By Jack Blanchard | | Presented by |  | | | With help from Eli Okun, Garrett Ross and Bethany Irvine
| | | Good Monday morning, and welcome to Week 3 of the brave new world. This is Jack Blanchard. TIMING IS EVERYTHING: Join us tomorrow morning for POLITICO’s third weekly policy breakfast exploring the first 100 days of Trump 2.0 — and this one’s an absolute blockbuster. Our very own Dasha Burns will be interviewing the White House’s senior counselor for trade, Peter Navarro, and there’s no prizes for guessing what’s top of the agenda. Navarro held key trade positions in the first Trump White House and is seen as the driving force behind Trump’s pro-tariff agenda. Sign up here to attend in person or watch online. Background reading: In a timely profile published this morning, NOTUS’s Haley Byrd Wilt runs the rule over Navarro, the man she calls “the president’s trade attack dog.” Ally Steve Bannon tells her: “Peter’s one of the most intense guys I’ve ever met. He’s very aggressive, and he rubs a lot of people the wrong way. He just does. He can be abrasive. But that’s his greatest strength. His superpower is his relentlessness.” Also appearing: Rep. Adrian Smith (R-Neb.), chair of the Ways and Means trade subcommittee … Rep. Linda Sánchez (D-Calif.), the top Democrat on the trade subcommittee … This one should be a must-watch.
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President Donald Trump's 25 percent import tariffs on goods crossing the northern and southern borders come into effect at midnight tonight. | Ben Curtis/AP Photo | |  | DRIVING THE DAY | | FRIENDS THAT BREAK YOUR HEART: Donald Trump will hold 11th-hour talks with Canadian PM Justin Trudeau and Mexican President Claudia Sheinbaum today as America’s closest neighbors brace for the mother of all trade wars. The U.S. president’s thumping 25 percent import tariffs on goods crossing the northern and southern borders come into effect at midnight tonight, and manufacturers across North America are steeling for the impact. There’s no sign of the president backing down — although Trump being Trump, no one can yet be certain how this plays out. Sign of the times: Check out these “Buy Canadian Instead” signs already replacing U.S. products in Canadian liquor stores. New world order: If these tariffs come into force tomorrow, it will mark a historic moment for the global economy. Bloomberg describes Trump’s tariff wall as “the most extensive act of protectionism taken by a U.S. president in almost a century.” (The biggest since the Smoot-Hawley tariffs of 1930, since you ask.) We are witnessing a revolutionary president tearing up legal, constitutional and now economic norms with every passing day — and to repeat, this is only week 3. First thing to watch: The U.S. stock market. Along with his personal approval rating, this is the only metric Trump really gives two hoots about. But financial markets tend not to be the biggest fans of economic turmoil, and the expectation is that we may see significant losses today. All eyes on Wall Street from 9:30 a.m. While you were sleeping: In Europe and Asia, global stock prices are already tumbling, with automakers taking the biggest hits. “The benchmark Stoxx Europe 600 index and the FTSE 100 each fell 1.3 per cent in early trading after Trump unleashed a barrage of tariffs over the weekend,” the FT’s liveblog reports. The dollar, on the other hand, is surging fast. Useful context: The Wall Street Journal notes that U.S. stock futures were already tumbling on Sunday — while oil prices rose — as fund managers warned clients of impending doom. The Bulwark’s Jonathan Last has filed a helpful analysis of what losses of varying scales would signify, along with a comparison with the routs caused by Covid-19 and the 2008 banking crash. We surely won’t see anything on that scale … will we? Nothing to worry about! The “globalist” WSJ is “always wrong,” Trump blasted in a long (and disturbingly cap-heavy) Truth Social post on Sunday afternoon. The White House later followed up with a punchy 400-word memo last night detailing the WSJ’s past crimes in defending global free trade and open markets. The WSJ’s Friday night editorial decrying “the dumbest trade war in history” seems to have rattled at least one occupant of the White House. But but but: Trump did also concede on Sunday that his tariffs’ impact may not be entirely rosy. “WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!),” Trump wrote. “BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.” About that pain: Bloomberg has interviewed Mary Lovely, a senior fellow at the Peterson Institute for International Economics, who fears the North American tariffs will impact America’s ability to compete with China. “With a few strokes of his pen, she said, Trump destroyed the case for relocating low-cost production out of China and into places like Mexico.” The WSJ’s Greg Ip explores Trump’s motivations, concluding that Trump is now using tariffs “as an all-purpose tool to achieve a range of economic, political and strategic goals.” Next thing to watch for: A flurry of last-minute diplomacy today. Trump told reporters as he disembarked Air Force One last night that he had calls planned with his Canadian and Mexican counterparts this morning — but tamped down any suggestion of a last-minute deal. “I don't expect anything very dramatic,” Trump said. “We put tariffs on. They owe us a lot of money, and I'm sure they're going to pay.” (h/t CNN’s Alayna Treene) Mexican stand-off: Sheinbaum will hold a televised press conference at 10 a.m. ET, where she will unveil Mexico’s retaliatory tariffs. In an eight-minute video address on Sunday, Sheinbaum said she’d “instructed my economy minister to implement the plan B we've been working on, which includes tariff and non-tariff measures in defense of Mexico's interests.” Bloomberg reports Sheinbaum’s finance chief Rogelio Ramirez de la O will host a conference call with investors at 9 a.m. to offer a heads-up of what’s coming. ICYMI: Trudeau announced Canada’s own retaliatory tariffs on Saturday evening, a targeted 25 percent hit to $105 billion-worth of goods imported from America. The first tranche — around one-fifth of the total — comes into force Tuesday, with the rest scheduled for three weeks’ time in order to give Canadian businesses time to prepare — and, presumably, in the hope that Trump might yet cut a deal. Read the full list here. Red states under fire: Clearly, the hit to the mighty U.S. economy from a North American trade war will be nothing like that felt in Canada and Mexico, where economists predict Trump’s tariffs will trigger mass job losses and — possibly — deep recession. The WSJ reckons Ottawa and Mexico City will therefore try to inflict maximum political pain on Trump instead, with “precision strike” tariffs targeted at GOP-held states. The WSJ notes Trudeau’s initial tariff list includes “whiskeys from Kentucky, oranges from Florida and appliances from South Carolina.” Which begs the question: Will the current GOP unity over Trump’s tariff agenda hold? As with the president’s purge of FBI and Department of Justice top brass; his mass pardoning of (sometimes violent) Jan. 6 participants; his unprecedented land grab of Congress’s spending powers; and his attempt last week to *checks notes* weaponize an air disaster, Trump’s trade war with America’s closest neighbors is privately unsettling plenty of GOP types on the Hill. Any public opposition has been largely muted for now — but that could change if economic realities in home states start to bite. Example A: Former Senate Majority Leader Mitch McConnell (R-Ky.) offered the first whiff of GOP pushback last night with an interview on CBS’s “60 Minutes.” He told correspondent Lesley Stahl: “[Tariffs] will drive the cost of everything up. In other words, it will be paid for by American consumers. Why would you want to get in a fight with your allies over this?” McConnell also warned Trump — in case he hadn’t guessed — that he intends to be “more outspoken about things that I particularly care about than I have been in the past.” Fun times ahead. Dems rally round: You can certainly expect to hear plenty of vocal pushback this week from Democrats, who spy an opportunity to create Trump’s very own “price of eggs” crisis if tariffs push inflation even higher. “The last thing President Trump wants … is for Democrats to talk about his broken promise to lower costs right away,” writes Joe Biden’s former deputy press secretary, Andrew Bates, in a Fox News op-ed published this morning. “Now that Republicans are imposing broad tariffs, they are actively increasing the prices and taxes working families pay.” Expect to hear that argument plenty in the days ahead. Wildcard — could the tariffs be stopped? Former Rep. Tom Malinowski (D-N.J.) reckons any member of Congress has the power to force an emergency vote to terminate the tariffs, under the National Emergencies Act. Which would be quite a moment, given the knife-edge numbers in both chambers. And what about the courts? Trump’s usage of the 1977 International Emergency Economic Powers Act to unilaterally impose tariffs is unprecedented, Reuters’ David Lawder notes, and could itself be subject to immediate legal challenge. Trump’s efforts to end birthright citizenship and freeze all federal loans and grants have already been temporarily blocked by the courts. Don’t be surprised if we see some sort of effort along those lines today. Don’t forget China: Less contentiously for those on the Hill, Trump has also announced a 10 percent tariff on goods imported from China. Beijing’s reaction has been more muted, Bloomberg notes, with the Commerce Ministry issuing a statement expressing strong “dissatisfaction,” and vowing “corresponding countermeasures,” without elaborating. But there’s more to come: In truth, Trump’s trade war is only just getting going, with the president vowing last night that he will soon press ahead with tariffs on the European Union, too. “It will definitely happen with the European Union,” he said. “I can tell you that, because they’ve really taken advantage of us — you know, we have [an] over $300 billion deficit. They don’t take our cars, they don’t take our farm products. They take almost nothing, and we take everything.” Ready to hit back: Speaking in Brussels this morning, EU foreign policy chief Kaja Kallas warned Americans of a tit-for-tat response. “We were listening carefully to those words and of course we are also preparing on our side,” she said, adding: “What is clear, there are no winners in trade wars. If the U.S. starts a trade war, the one laughing on the side is China.” Brexit bonus: There was better-sounding news for Britain, however, which may be rewarded for having left the EU bloc. “The U.K. is out of line [on trade] but I’m sure that one, I think that one can be worked out,” Trump said last night. He noted British PM Keir Starmer had been “very nice” in their conversations thus far, and that the two leaders are “getting along very well.” It’s excellent news for anyone who spends at least half their shiny new U.S. salary on boxes of imported Yorkshire Tea.
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Learn more about how others are building with open source AI. | | | THE MAGA REVOLUTION MUSK READS: The future of USAID — and the millions of people it supports worldwide — hangs in the balance today amid widespread reports the agency will be scaled back dramatically and wrapped into the State Department. Trump’s cutback king Elon Musk and his allies are targeting the agency and appear to be going for the kill. “USAID is a criminal organization,” Musk declared on X yesterday. “Time for it to die.” Stay of execution: Trump himself told reporters last night that the agency had been led by “a bunch of radical lunatics,” but said a decision on its future would come after removing the leadership. On Musk’s efforts more broadly, Trump said: “Sometimes we won’t agree with it and we’ll not go where he wants to go. But I think he’s doing a great job.” In fact, “Trump is not closely monitoring Musk’s moves, according to people close to the president,” WaPo’s Isaac Arnsdorf and Jacqueline Alemany report this morning. “But the people said … the president benefits from letting someone else take the heat for drastic and controversial measures.” ICYMI — Drastic and controversial measures: Officials with Musk’s so-called Department of Government Efficiency sparked a tense clash with USAID administrators at the weekend by demanding access to its physical headquarters and digital systems, and threatening to call security when the agency refused, CNN’s Jennifer Hansler and Alex Marquardt reported. The incident led to two more senior USAID security officials being placed on leave and DOGE ultimately succeeded in getting classified information. The book of Elon: The war on USAID is just “the start of a far-reaching campaign by Musk to upend the federal government, agency by agency,” WSJ’s Alex Ward and Ginger Adams Otis report. And the revolution is being implemented by a bunch of college-age tech heads, per Wired’s Vittoria Elliott. She reports that Musk’s team is powered by six engineers, all men between ages 19 and 24, who have suddenly gained access to vast swathes of government data. It’s one way to mis-spend your youth, I guess. Meanwhile at the FBI: The astonishing purge of America's federal law enforcement also continues apace, with thousands of FBI employees given until 3 p.m. today to answer a questionnaire about whether they played any role in the Jan. 6 investigations, Josh Gerstein and Kyle Cheney report. That’s fueling “a mounting sense of anxiety” about Trump’s efforts to fire agents he views as political enemies — and much broader concern about the politicisation of policing in America. The pushback grows: Some FBI field office leaders are resisting the edict, per Josh and Kyle. James Dennehy, head of the New York office, told his staff he would “dig in” against efforts to undermine the FBI’s independence and punish employees for doing their jobs lawfully, NYT’s Adam Goldman, William Rashbaum, Maggie Haberman and Glenn Thrush report. And attorneys for several career staffers at the FBI and the Justice Department warned acting AG Emil Bove they’d sue over firings they called illegal, NYT’s Charlie Savage reports. GOING DARK: The number of government web pages taken down since last Friday has now hit 8,000, the NYT’s Ethan Singer reports. More cuts coming? Separate from the massive foreign aid freeze, Trump declared last night that he’d halt “all future funding” to Musk’s native South Africa in protest at its government paving the way for more land expropriations, per Bloomberg. Trump indicated that he considered the new law unfair to white people who could lose their land in South Africa’s attempt at historical racial redress. MAGA moves into State: Rubio is expected to tap Darren Beattie as acting undersecretary for public diplomacy, Semafor’s Ben Smith scooped. That would elevate a controversial lightning rod from Trump’s first term — in 2018, Beattie was fired from the White House after attending a conference with white nationalists — who fits in the new right far more than Rubio’s establishment lane.
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| | | CONFIRMATION WATCH NOMINEE NEWS: President Trump will move closer toward assembling his Cabinet today as the Senate votes to confirm Chris Wright as Energy secretary, and to move forward on Russell Vought as OMB director and Pam Bondi as AG. The votes will take place around 5:30 p.m. Vought of confidence: Like Wright and Bondi, Vought — one of the architects of Project 2025, which Trump definitely never read — is expected to have little trouble getting the requisite support from Republicans. But in the wake of last week’s bungled federal funding freeze, he is sure to face significant protests from unsettled Dems. EDF Action ran home-state newspaper ads yesterday urging Sens. Susan Collins (R-Maine), John Curtis (R-Utah), Mike Lee (R-Utah), Thom Tillis (R-N.C.), Ted Budd (R-N.C.) and Lisa Murkowski (R-Alaska) to vote no. The Bangor Daily News spot The pressure campaign: Trump is continuing to put the screws on GOP senators to confirm his picks, declaring on Truth Social that “Republicans must GET TOUGH — AND MUST GET TOUGH VERY FAST.” Not getting tough: Elon Musk, who after excoriating Sen. Todd Young (R-Ind.) in an online posting (he called him a “deep state puppet”), had a phone call with the GOP senator and swiftly changed his tune. Adam Wren reports that Musk didn’t even ask Young to vote for Tulsi Gabbard as director of national intelligence, which may not bode well for her knife-edge prospects of confirmation. (Gabbard last night came out with a Newsweek op-ed making the case for herself.) One to watch: Sens. Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.) say in a letter that they got hold of HHS Secretary-designate Robert F. Kennedy Jr.’s new ethics agreement — and still find it lacking regarding his conflicts of interest. Kennedy also talked yesterday with crucial vote Sen. Bill Cassidy (R-La.), per Fox News’ Chad Pergram. BEST OF THE REST WHAT CHIP ROY IS READING: Spending hawks on the House Budget Committee have forced GOP leaders to seek steeper cuts in the party’s reconciliation bill, Meredith Lee Hill scooped. Speaker Mike Johnson’s team has asked committee chairs to find more cuts than were initially proposed in last week’s blueprint, as hard-liners demanded $1 trillion in cuts. That number would force some hard conversations — and could lower the odds that the GOP can get a budget resolution moving this week. And the Freedom Caucus has a crucial ally: Senate Budget Chair Lindsey Graham (R-S.C.) has been talking with Reps. Andy Harris (R-Md.) and Chip Roy (R-Texas) behind the scenes, Jordain Carney reports this morning. That could undermine Johnson’s attempt to do one party-line bill instead of two. It’s “the latest twist in Graham’s decadelong political evolution.” FIRST IN PLAYBOOK: A new internal polling memo indicates that Rep. Harriet Hageman (R-Wyo.) could be in a strong position if she runs for governor of Wyoming, as she leads potential primary rivals by dozens of points. But Hageman’s team says she’ll make a decision about her political future “on her own timeline.” The Cygnal memo AD IT UP: “Fox News opts not to air Democratic group’s ad,” by Semafor’s Max Tani: “House Majority Forward, a nonprofit group aligned with a top super PAC for House Democrats, bought advertising space on Fox News to air advertisements hitting the Trump administration over its decision to freeze spending on trillions of federal grants and other programs. … A Fox spokesperson said it decided not to air the ad because the administration pulled the executive order, thereby rendering the claims in the ad moot.”
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| | | | | BEYOND THE BELTWAY | | AMERICA FIRST IN ACTION: Secretary Rubio continues his tour of Central Americ a today after a high-profile weekend visit to Panama. Rubio doubled down on Trump’s Panama Canal aggression — and secured at least one notable result. Rubio told Panamanian leaders that they must diminish Chinese presence around the canal or the U.S. would “take measures necessary to protect its rights,” per the State Department, AP’s Matthew Lee and Juan Zamorano report from Panama City. Panama said afterward that it will leave China’s Belt and Road Initiative when the agreement ends, the first Latin American country to pull out. Reassuring: Panamanian President José Raúl Mulino said Rubio had issued “no real threat of retaking the canal or the use of force.” The day’s biggest news for Latin America: DHS Secretary Kristi Noem has officially axed Temporary Protected Status for more than 300,000 Venezuelans, putting people who are in the U.S. legally at risk of deportation in a matter of months, NYT’s Hamed Aleaziz and Maggie Haberman scooped. More than 250,000 other Venezuelans here under TPS are not affected for now. This is an immigration crackdown of a higher order than in Trump’s first term, when he also sought to end TPS for some countries but gave recipients a much longer lead time (and was stymied in court). More on immigration: Defense Secretary Pete Hegseth will travel to the U.S.-Mexico border today to emphasize the growing “militarization of immigration and border enforcement,” Joe Gould reports. Meanwhile, as Democrats search for a coordinated response, some party messaging is increasingly centered on three groups: Dreamers, families and agriculture workers, Emily Ngo and Nick Wu report. Coming tomorrow: Washington’s international focus will shift from Latin America to the Middle East as Israeli PM Benjamin Netanyahu meets with Trump at the White House on Tuesday. Netanyahu said yesterday they’ll talk about the Israel-Hamas war, Iran and Israel’s regional ties, AP’s Tia Goldenberg reports from Tel Aviv.
| | TALK OF THE TOWN | | Jared Moskowitz is working to balance trolling Republicans and working with them. Jimmy Carter won a posthumous Grammy for an audiobook he narrated — his fourth win. Mariann Budde got a standing ovation at Washington National Cathedral after delivering a viral sermon to Donald Trump about mercy. Josh Shapiro doubled down on defending Punxsutawney Phil against PETA. OUT AND ABOUT — On her final night in America, outgoing British Ambassador Karen Pierce and Charles Roxburgh hosted a “best of British” send-off, with a whiskey bar and Elton John renditions on the embassy piano. SPOTTED: Chris LaCivita, Sean Cairncross, Steve Ricchetti, Brian Hook, Carlos Elizondo, Carrie Marriott, Stuart Holliday, Lonnie Bunch, Terry McAuliffe, Cameron Sadler, Sharon Percy Rockefeller, Deborah Rutter, Rima al-Sabah, Raj Shah, Tom Tugendhat, David Malpass, Italian Ambassador Mariangela Zappia, Saudi Ambassador Princess Reema Al Saud, Jordanian Ambassador Dina Kawar, Ukrainian Ambassador Oksana Markarova, Joint Chiefs of Staff Chair Gen. C.Q. Brown, Carlos del Toro, David Petraeus, Jane Fraser, Teresa Carlson, Barby Albritton, Jonathan Capehart, Helen Milby, Lynda Carter, Robert Costa, Donald Graham, Fred Ryan, Meridith McGraw, Ed Luce, Rob Crilly and Josh Dawsey. — SPOTTED at James Kimmey’s birthday celebration (the 37th annual James-A-Palooza) in the Bahamas over the weekend: Lisa and Charlie Spies, Jennifer DeCasper, Tonnie Wybensinger, Matthew Hoekstra, Daniel Fisher, Nick Stewart, Danielle Stoebe, Victoria Ellington, Kristin and Paul Sapperstein, Brielle Appelbaum, Ryan Kirkley, Hannah MacInnis, Sumter Groves, Grant Youngkin, Ericka Morris, Joel Krautter, Anna Kecskés, Sonny Daniels, Bobby Matthews and Paul Segal. FIRST IN PLAYBOOK — Jonathan Guyer is now program director at the Institute for Global Affairs at Eurasia Group. He is a former senior writer at Vox and managing editor of The American Prospect. — Sahar Hafeez is joining Pillsbury Winthrop Shaw Pittman LLP as a senior counsel, focusing on international trade and economic security. She most recently was a senior adviser at the Commerce Department, and is a Biden NSC alum. MEDIA MOVES — Houston Keene is joining The Washington Reporter as news editor, as founding editor Matthew Foldi transitions to live events/commentary. Keene most recently was at Fox News. TRANSITIONS — Lynn Nonnemaker is now senior director at McDermott+. She most recently was VP for Medicare policy at AHIP. … Tommy Brown is now a manager at Ernst & Young’s Washington Council. He previously was a senior adviser in Treasury’s Office of Legislative Affairs. … Vince Sarubbi will be an attorney in DLA Piper’s government affairs and public policy practice. He previously was deputy chief of staff and legislative director for Rep. Josh Gottheimer (D-N.J.). … … Michael Harris is now lead policy adviser for energy and environment issues for Sen. Adam Schiff (D-Calif.). He most recently was senior adviser for oversight at the EPA. … Trace Mitchell is now deputy chief counsel for the House Judiciary Administrative State, Regulatory Reform, and Antitrust Subcommittee. He previously was general counsel for Sen. Rand Paul (R-Ky.). … Daniel Thayer is now military legislative assistant for Rep. Mark Messmer (R-Ind.). He previously was legislative correspondent for Sen. Rand Paul (R-Ky.). ENGAGED — Marla Kramer, a federal contractor at GDIT, and Rob Towner, software license manager at ShorePoint Inc., got engaged Saturday at the Netherlands Carillon. They celebrated with friends at the Waldorf Astoria before dinner at The Bazaar by José Andrés. The couple met in April at Lucha Rosa on the rooftop of the Moxy Washington hotel during a Causal iQ reception, where they bonded over a shared appreciation for Publix and Costco. Pic … Another pic HAPPY BIRTHDAY: Reps. Ayanna Pressley (D-Mass.) and Rob Wittman (R-Va.) … Wisconsin Dem Chair Ben Wikler … Matt Rhoades … Jose Antonio Vargas … Mieke Eoyang … Amy Chapman … Virginia Moore … former Rep. Tom Graves (R-Ga.) … Markus Batchelor … Andrew McIndoe … Josh Lipsky … James Holm … MaryAlice Parks … Kyle Tharp … Zaida Ricker of the National Association of State Head Injury Administrators … Douglas Holtz-Eakin … Lisa Boothe … Mike Ryan … Justine Turner of End Citizens United … John Hendren … Steve Weiss … Arthur Levitt (94) … Fred Hochberg … Claudia Borovina … Lauren Bosler … AM LLC’s Dan Gabriel … Kevin Figueroa of Sen. Michael Bennet’s (D-Colo.) office … DNC’s Gabby Paone … Eric Lander … Claritza Jimenez … POLITICO’s Benjamin Berg Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us at 202-556-3307. Playbook couldn’t happen without our deputy editor Zack Stanton and Playbook Daily Briefing producer Callan Tansill-Suddath. Correction: Yesterday’s Playbook misstated the person whose reported participation in the Jan. 6 insurrection the State Department did not respond to questions about. It was Pete Marocco.
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