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The far-reaching impact of Trump’s funding freeze
A judge in the District of Columbia on Tuesday blocked Donald Trump’s move to freeze federal funding until Feb. 3. District Judge Loren AliKhan’s decision dropped just minutes before the order was meant to take effect.
Trump’s directive, issued late Monday, applied to a vast swath of federal funding recipients – including disaster relief, education grants, and transportation funding – putting 2,600 programs under review. And while Medicaid was not supposed to be impacted, states said Tuesday that the online portals that supply Medicaid funding were down briefly in all 50 states.
Tuesday’s decision temporarily blocks the Trump administration’s order freezing federal funding and halting US foreign aid – and will hold through Monday afternoon. In the interim, the Trump administration offered approximately two million federal workers payouts to resign, warning that the majority of federal agencies will be facing downsizing.
Aid groups abroad fear that a halt to US-funded work could have dire and broad-reaching consequences – like NGOs and refugee camps losing funding. The State Department did restart the worldwide HIV program on Tuesday, citing the deadly effects of stopping the distribution of medication in low-income countries.
While critics are sounding the alarm that Trump is overstepping his presidential authority, Eurasia Group US expert Jon Lieber said we need to keep an eye on the legal process. While the president is “exercising a very muscular interpretation of executive power,” many of Trump’s executive orders will be challenged and shut down in the courts, he explained, as seen by the DC court decision. “They will be sued, and the courts will rule on what powers they have to fire civil servants, to cut spending, to upend the federal bureaucracy, etc.”
“The real test for the system will come when they are faced with a court order that curtails their agenda, and they either follow the law or continue to flout it.”
President Donald Trump speaks to reporters aboard Air Force One before arriving at Joint Base Andrews, Maryland, on Jan. 27, 2025.
White House pushes pause on all federal funding
Why is this happening? The Trump administration wants the government to stop funding prior administrations’ programs – which the memo accuses of advancing “Marxist equity, transgenderism, and green new deal social engineering” – so that it can harness those resources for its own priorities and executive orders. It calls for agencies to complete a “comprehensive analysis” to align their programs with Donald Trump’s recent executive orders on energy, immigration, and DEI. It also calls for a Trump administration official to be appointed to ensure federal funding “conforms to Administration priorities.”
The directive’s scope appears sweeping, potentially affecting nearly all federal agencies, with a temporary pause in place until they submit program information by Feb. 10. Meanwhile, a vast network of federal funding recipients – including those relying on disaster relief, education grants, transportation funding, NGO support, and foreign aid – face uncertainty about maintaining their operations during the freeze.
How Trump's assertive foreign policy impacts international relations
And the response by President Trump was immediately 25%, maybe 50% tariffs, and shut off visas and shut down diplomatic engagement. And there was immediate response by President Petro that was over the top, and as Trump's own responses are over the top, and going to completely hit the Americans back really hard. Now, America is Colombia's most important trade partner, and the size of these countries is a little bit different. And within a couple of hours, Petro very quietly accepted Trump's terms. The deported Colombians will be accepted back in Colombia, and the trade war with Colombia is in our rearview mirror. Not really a surprise.
So Trump is going out there, and he's saying all these extraordinary, extravagant things. Huge exaggerations about what he demands and what he wants. And if you're Colombia, the response was absolutely on par. I mean, the post that we saw from President Petro, who is also kind of a populist firebrand on the left, isn't enormously popular, frankly, and has had a lot of difficulty in passing economic policies. But he gave it a shot and it was entertaining to watch and read and a lot of Colombians responded well to it. It felt like good old nationalism. And of course, he had to back down. Why? Because you're not allowed to do the same thing that Trump is. It's not just about who's right, it's also about who's powerful. And Trump's more than happy to hit him with a stick. And so that turned out to be a loss pretty quickly for the Colombian government.
There are a lot of other countries that are working the same way. I see this happening with Mexico where the Mexican president has been incredibly careful. US is the most important relationship. Suddenly they are seizing enormous amounts of fentanyl. More in one seizure than they've done in four years under Biden and showing Trump, "Look at what we can accomplish because we know this is important to you." And working to get Chinese trade and investment that is problematic and coming through to the United States out of Mexico and willing to put more money and resources, people on Mexico's southern border to reduce the numbers of people that are coming through Mexico into the United States. They desperately don't want to fight with the Americans. They're going to make a lot of offers. Call it defense. Call it capitulation. But that's definitely what you're seeing.
I see this from Denmark, which is publicly trying to say nothing. There've been some leaks. But in general it's been very careful both from Denmark and all of the Nordic leaders I've spoken to, they've been very, very careful. Nothing public about the challenges that they're having. Of course, privately completely unacceptable that the United States would make demands of Greenland and wouldn't work through a very stalwart, though small, ally. The Danes who do everything the Americans ask in terms of coordinating on military exercises and providing multilateral support when the Americans want more participation in different wars or humanitarian support. You name it, the Danes are there. But that didn't matter to Trump. He said, "I want Greenland."
And they are privately trying really hard to get this out of the headlines to say nothing that would be provocative, not respond the way the Colombian President did, not get Trump to do anything even more angry. And instead, find a way to keep Greenland a part of Denmark, don't vote for independence and keep the alliance stable. Most places around the world, that's what they're doing. They're acting like Mark Zuckerberg and Meta and all of those tech titans that have given the money and have gone down to Mar-a-Lago and are saying, "No, we've always loved you Trump and we want to work with you and please don't hurt us."
But there are a few exceptions and I think it's worth mentioning who I think they are. Exception number one, this may surprise you: Canada. Canada is an exception not because they're unfriendly with the US, not because they don't depend on the US, but because they have an election coming up. Their government fell apart. And now everybody in Canada is angry at the United States with all of this threat of tariffs and we want more money for the Americans for security, and you guys should be a 51st state. Not only are the liberals angry, the conservatives are angry and they have to outdo each other to be tough on Trump in the United States or they think they're going to lose the election upcoming. So the fact is that Trump, I think, made a strategic mistake in going after Canada early because the Canadians are not in the position to respond well given the election.
The other two exceptions, the Europeans who want to be constructive with the US but have a stronger position if they can be collective through the EU and on some areas they can. On Russia-Ukraine, they can be collective, which has helped them bring Trump closer to the European position on Russia-Ukraine in the last three months than he was when he was initially elected. On trade, on tariffs, on China, Europe is more collective and has more regulatory force as long as they can act together. That is going to continue to happen, gives them more leverage, vis-a-vis the Americans.
And then finally the Chinese who don't act collectively, but they are stronger as an individual country. And they're going to be much tougher to engage with as we saw with the first phase one, phase two trade deal. It took a very long time to sort of come together and then they didn't actually uphold a lot of what they promised. A lot of decent conversations, but the Chinese were much more willing to lecture Marco Rubio in their first call with the US Secretary of State than anyone else he has spoken with around the world. Why is that? Because the Chinese want to show they're not going to be pushovers and that they are tougher and bigger and stronger and can hit back the way that many other countries cannot. What does that mean for US-China relationship? Probably going to get worse before it gets better. That would be my bet at this point. But we'll see how much of a deal Trump really wants.
That's it for me. I'll talk to you all real soon.
Opinion: The yellow brick road to a Golden Age
A week into the second Trump administration, the conviction held by many that the world was more prepared for Donald Trump in the US presidency has quickly faded. This weekend’s flare-up between Trump and Colombian President Gustavo Petro over tariff threats for deportation flights further strained any remaining optimism. In its place is a stark reality: Trump is back with a bang.
Trump launched an opening salvo – a campaign not of military might but of the pen. Dozens of executive orders and presidential actions have papered the field, overwhelming and scrambling forecasts of a much hoped-for manageable Trump 2.0.
Within his record-breaking number of executive actions, Trump has begun to lay out a roadmap for the “Golden Age” of America he intends to deliver.
Setting the stage
Trump held the (virtual) spotlight late last week at the World Economic Forum’s annual sessions in Davos, Switzerland, an emerald city showcasing the world’s who’s who. With the global community eager to hear him contextualize his plans, Trump featured a highlight reel of his young administration’s greatest hits including negotiating the ceasefire in Israel-Gaza, saying, “We have accomplished more in less than four days … than other administrations have accomplished in four years. And we are just getting started.”
Many of the headlines relating to these early accomplishments have been devoted to the set of Trump executive orders with clear and specific implications. The decision, for instance, to pardon or commute sentences for certain offenses relating to Jan. 6, 2021, sent ripples through the domestic political environment. As did his order to instruct the attorney general not to take action to enforce the so-called TikTok ban for 75 days. A move by a federal judge in Washington state to place a nationwide temporary restraining order on Trump’s Day 1 “Birthright Citizenship” executive order previews the court challenges ahead for the president’s targeted initiatives.
A Trump 2.0 blueprint
Yet, there is a second set of presidential actions with broader impact that deserve deeper scrutiny. In these, Trump and his team have been more open-ended, memorializing their ambitions across trade and economic policy, national security, and foreign policy for the months and years ahead.
On trade, there was initial relief abroad when Trump did not impose blanket tariffs on Day 1. Instead, he issued a wide-ranging action laying out an “America First Trade Policy,” which includes an instruction to the Department of Commerce, Treasury, and United States Trade Representative to undertake a host of investigations and reviews to address unfair and unbalanced trade. This includes the creation of an External Revenue Service to collect tariffs, duties, and other foreign trade-related revenues. Paraphrasing former vice-presidential candidate Tim Walz during the 2024 campaign – you don’t create a new governmental organization if you don’t plan on collecting the tariffs. Alluding to these plans in his Davos remarks, Trump suggested that if firms do not make their product in America – which is their “prerogative” – they will have to pay some tariff.
In addition to the spat with Colombia, Trump has threatened to impose 25% tariffs on imports from Canada and Mexico on Feb. 1. Trump’s near-term focus on his northern and southern borders is almost certainly to apply pressure for concessions on immigration but also ahead of forthcoming renegotiations of the USMCA agreement. And while Europe may escape the first round unscathed, it would do well to pay attention. If Trump can impose tariffs on US allies close to home, he can easily do the same across the Atlantic, where he will be looking for leverage on US LNG sales, European automotive manufacturing, NATO defense spending, and his emerging dream of bringing Greenland into the US fold.
On foreign policy, Trump has set for himselfan aspiration agenda. Gone are the days of isolationism, now replaced by eyes that roam from Canada to the Panama Canal and the “Gulf of America.” In his inaugural address, Trump suggested that the US is a nation “more ambitious than any other.” In a directive to the Secretary of State, Trump codifies this expansionist vision: “From this day forward, the foreign policy of the United States shall champion core American interests and always put America and American citizens first.” To that end, the administration placed an immediate 90-day hold on all new US foreign development assistance pending review and consistency with US foreign policy. A consequential development for US relationships and soft power worldwide.
As the conversations across Europe and the world shift from an election post-mortem to looking forward, the focus has narrowed to an essential question: What kind of America are we in for, and where do we go from here? With a flurry of activity since taking office, Trump has cast aside (misguided) expectations of restraint. His government will be busy on many fronts laying a path toward a golden age.
Lindsay Newman is a geopolitical risk expert and columnist for GZERO.
Trump's Davos address sets up big shifts in US strategy
Ian Bremmer's Quick Take: A Quick Take to close out our week in Davos, Switzerland.
Want to talk about now President Trump's address; virtual, direct to everybody, collected yesterday, assembled yesterday, to hear his speech, and then to ask a few pre-planned questions. The speech itself, at the beginning, not all that surprising, "America's back open for business. Everything was horrible before. Everything's going to be great, now." Not a surprise, kind of exaggerated. You'd never think that the US was by far the strongest-performing economy in the advanced industrial world, coming out of the pandemic. But people roll their eyes a bit, they get on getting on. There was still a fair amount of news that was actually made, and some interesting thoughts about where the initial Trump administration is going to go.
First point, on OPEC, talks a lot about Saudi Arabia directly, Mohammed bin Salman. They're very close, they've worked together closely. Not only when he was president the first time, it was his first trip as president back in 2017, but since then. A lot of business with the family as well. And has been promised $600 billion to invest in the United States directly. That beats the $500 billion announcement that the AI giants have just made in what they're going to do, this Stargate project. He likes that. He said, "Why don't you up it to a trillion?" That's a round number. Good thing we're base-10 in this country. Anyway, the fact that Trump is interested in engaging very closely with the Saudis, not a surprise at all, there is going to be a very big push to try to ensure that Saudi Arabia moves on normalization of relations with Israel. Given the fact that there's no two-state solution on the table for the Palestinians, that's challenging, but I wouldn't count it out, frankly.
Secondly, a lot of talk about oil and the fact that Trump really doesn't like where oil prices are right now. Now, the Americans are going to try to pump more, but he knows that there's only so much that can be done in the near term, maybe another 500,000 barrels a day. OPEC, on the other hand, has over four million barrels that are off the market. Why? Because they're willing to ensure that prices are comparatively high. And if that means they lose a little bit of market share, they're happy to do that. Well, Trump doesn't like that one bit, and especially because he wants to hit Iran hard, and take more of their oil off the market. He doesn't want prices to go up, so he wants the Saudis to lean in. How are they going to react? We'll see. Something at least nominal in the near-term, that brings prices maybe down towards, let's say, $70, as opposed to roughly $80, where they've been, that would be interesting to see. I wouldn't put it past the Saudis at all to lean in on that.
Secondly, China. We are going to now see tariffs early on China, 10% across the board, February 1. Markets seem to like the fact that, on the first day, Trump didn't do anything, but a few days later, is that really much better? What was interesting about the conversation, Trump is trying to make it very clear, he doesn't have an ideological beef with China. He continues to speak broadly, more warmly about Xi Jinping, and specifically about China, than generally President Biden has. That's not all that different from the first term, but it's different from expectations over the past few months. And I do expect we're going to see a summit meeting relatively soon, even though there's been no announcements around it. Having said all of that, the fact that the US has a really tough take on China, not only bilaterally but also versus all these other countries, Trump wants to punish the Europeans to ensure that they coordinate with the US on China, wants to ensure the Mexicans, the Indians, the Vietnamese, and others don't allow Chinese goods into the US through their countries.
It's very hard for the US and China to maintain a stable relationship when Trump's going to respond to China, "Well, that's our business. Those are relations with other countries. You have nothing to say about it." They're really stuck on this, and I expect that, despite maybe a bit of a honeymoon, which I wasn't thinking we'd have a few weeks ago, the US-China relations are still going to get a lot more challenging over the coming months.
And then we have Russia. And I thought it was very interesting that when Trump was asked, "So, next year at Davos, if you were here, is the war going to be over between Russia and Ukraine?" Because, of course, he's been saying, "I can end the war in a day." Then he's saying, "100 days." Now, he's saying, "Actually, the Ukrainians are ready for a deal." And by the way, that's true. But you're going to have to ask the Russians. Well, that's very different from, "I can get the deal done very easily."
He also continues to lean into the fact that the Chinese can be useful here, and that's true. That's something that the Biden administration and Trump administration actually agree pretty strongly on, that China has a lot more direct leverage over Russia than the United States does. And there's only so much the US can do with additional sanctions to convince the Russians to stop. Now, Trump can say that Russia needs to end the war, and that this is hurting them, but Putin doesn't actually feel that way. Certainly isn't prepared to accept less than the territory that he's presently occupying. So that, to me, is very interesting.
I would say the place that Trump has moved the most in the last three months, moved specifically towards the position that the Europeans have, and they're a lot less panicked about it now than they were even a week ago, is on the Russia-Ukraine issue. No one here in Europe, not one European leader I spoke with, now believes that Trump is going to basically throw Zelenskyy under the bus. And that's absolutely not where they were even, let's say, in December. So, that's a big deal.
That doesn't mean that the Europeans are feeling comfortable about Trump because, of course, Trump does not like Europe. Does not like a consolidated Europe, doesn't think a strong Europe is good for the United States. He wants to deal with individual European countries, and he wants to deal, of course, preferably with more Europe-first types in those individual countries. So, it's not the British Prime Minister, it's not the German Chancellor. It's organizations like the Reform Party and AFD. And, of course, Giorgia Meloni from Italy. He also bitterly complains about all the regulations, all the taxes, how hard it is to do business in Europe, how hard it is to do business with Europe. And that is a big challenge for Europe, that understands they need to be more competitive, but isn't prepared to spend the money, isn't capable of coordinating to get the kind of industrial policy done that the Americans are now doing.
So, on defense, on Ukraine, existential threat from Russia, Europe's doing a lot more coordination with the United States. On the economy, which concerns the Europeans equally much, and technology, where the Americans are a clear leader and leaning in very heavily, and the regulations are only going to get more comfortable and aligned with the technology companies, those that remain, the regulations, that is, not the tech companies, the Europeans are in very serious trouble.
So, that's it from me. I hope you all guys are well, and I'll talk to you all from New York next week.
At Davos, all eyes are on Trump
Carl Bildt, former prime minister of Sweden and co-chair of the European Council on Foreign Relations, shares his perspective on European politics from Davos, Switzerland.
What’s been going on here?
It’s been Trump, Trump, Trump, Trump. It’s been very much dominated by assessments, curiosity, concern about the transition in the US. A lot of businessmen are fairly, sort of, upbeat. They think there’s sort of a deregulation and lower taxes, that’s good. Economists are more worried. Debts and deficits, that’s not good. And those dealing with geopolitics, like myself, are deeply concerned.
Is he going to go to war with Denmark over Greenland? What’s going to happen with the Panama Canal? Is their Middle East policy that is credible? And what is he really up to when it comes to dealing with Mr. Putin on Ukraine? There are lots of questions, lots of concerns. But, upbeat assessment, in spite of that.
A procession carrying signs for equal rights, integrated schools, decent housing, and an end to bias during the civil rights march in Washington, DC, on Aug. 28, 1963.
An end to affirmative action?
Conservatives complained that the order led to cumbersome and unfair bureaucratic rules, but no president since Johnson wanted to face the political fallout that would come from repealing it. That changed on Tuesday, when Trump superseded it with his own executive order, part of a government-wide push against DEI — diversity, equality, and inclusion, policies that MAGA supporters say are unfair to whites.
If anyone wondered whether he was serious, his government also ordered all DEI employees to go on paid leave by the end of the day on Wednesday and ordered federal scrutiny of corporate DEI programs.
There will be court challenges, but their outcomes are uncertain, and there is a shift underway in corporate policies toward so-called color-blind hiring. Some big companies — including Lowe’s, Meta, Amazon, and McDonald’s — are already backing away from DEI programs, but other firms, including Costco, Apple, and Microsoft, have declined, saying their employees expect their programs.
Those calculations may change when the federal government launches regulatory action, and the pressure is unlikely to let up until someone else is in charge in Washington.
President Donald Trump signs executive orders in the White House.
Trump uses uncertainty on tariffs for leverage
In November, Trump said he would impose those tariffs on Day One, which was Jan. 20, but the document he was signing when he made his remarks calls for a comprehensive report on trade to be delivered to him by April 1, setting out his options.
That process will allow American trade and national security officials to have input “in a formal way, rather than the kind of monarchical court that was going on at Mar-a-Lago,” says Eurasia Group analyst Graeme Thompson.
That means that Canada and Mexico will likely have the opportunity to make their case for continued trade before Trump acts, but he is going to be pushing hard for concessions.
The fresh tariff threats should be thought of as “a negotiating tactic,” says Thompson, but that doesn’t mean there won’t be tariffs. “The bottom line is, whether they come today, tomorrow, next week, or next month, Canada is going to have to live with the specter of US tariffs hanging over its head on any issue at any time for the next four years.”
Trump will reportedly use the threats to force Canada and Mexico to renegotiate the USMCA in an attempt to shift auto manufacturing from those countries to the United States.
Canada and Mexico can both be expected to push back hard to protect jobs in their countries but may be forced to make difficult tradeoffs to avoid broader tariff pain.