Two years ago, Donald Trump’s grip on the Republican Party appeared nearly absolute: Republican elites remained loyal to him despite multiple criminal indictments, and regular voters largely rejected Nikki Haley’s more conventional brand of social conservatism. Since then, President Trump has been systematically rooting out dissenters from within the party’s structures, using endorsements, primary threats, and public attacks to reward loyalists and punish those who cross him. 

These tactics are a key factor behind the historically large number of Republican departures from Congress at the end of this term (43 compared with 37 in 2018) — and they have an unintended consequence of amplifying pushback from those lawmakers who have little to lose. In recent weeks, enough Senate Republicans, both those headed for retirement and those facing competitive reelection races, sided with Democrats to defund projects personally important to Trump, like a $1.8 billion fund to compensate his allies for alleged government targeting. In the House, enough Republicans helped push Democrat-led efforts to end U.S. war with Iran and send new military aid to Ukraine over the finish line. 

Some of these actions, like voting to end the Iran war that Congress never approved in the first place, are purely symbolic. But they illustrate a growing tension between the White House and Republican candidates forced to sell Trump’s expansive domestic and global agenda to an electorate concerned with the cost of living above all else. This preoccupation is evident even among the president’s MAGA base, where his job approval is down 5 percentage points since just before the start of the war with Iran, to 92%, while support for the way he is handling inflation is down 14 points, to 66%. (This compares to a 7-point decline in his approval among all voters, to 24% from 31% in February.) To MAGA voters, inflation is now the top issue driving their choices at the ballot box, at 28%, bypassing immigration at 15% and reversing the pre-war dynamic where these voters prioritized immigration over inflation, 24% to 22%. 

Another outcome of Trump’s efforts to purge dissent from his party’s elected ranks may be a weaker crop of candidates facing Democrats in November. Since the start of his second term, Trump-endorsed Republicans lost two-thirds of general and special elections, weighted down by the president’s historic unpopularity and relatively low approval of his administration’s biggest achievements (including last year’s tax cuts that Americans believe largely benefit the wealthy). Voters in swing congressional districts increasingly blame Republicans in Congress for making life less affordable, but view neither party as a clear leader on fighting inflation. 

Nationwide, Democrats are roughly 7 points ahead on a measure of voters’ preference for a party to represent them in Congress, but they are yet to coalesce around a single, party-wide plan to address the cost of living. Time is running short for them to meld a growing menu of affordability proposals into a unified agenda before November. But in the meantime, Trump’s assurances that prices are coming down, or will soon, are leaving little space for his party to show that they are doing something concrete to cut costs.

Trump Weighs New Duties to Rebuild His Tariff Wall  

Companies are beginning to claim the money they paid under President Trump’s “reciprocal” tariff program, with more than $23 billion already refunded out of the $166 billion collected since April 2025. But the Trump administration is appealing the trade court ruling that authorized the refunds, seeking to limit the payouts either to companies that were part of the Supreme Court case that invalidated the tariffs, those that have refunds underway, or those actively challenging the government’s refusal to refund them. If successful, the appeal would exclude those businesses that did not particulate in the original case and whose transactions were finalized months ago. The litigation is unlikely to halt refunds already moving through the system, but it amplifies uncertainty for those importers that may now be required to file their own lawsuits to reclaim what they are owed in full.

In the meantime, in an effort to recapture some of the lost revenue, the administration is considering new Section 301 tariffs against 54 countries in response to their alleged failure to block imports produced with forced labor. Sixteen countries, including the EU, Canada, and Mexico, could see an additional duty of 10% on top of other tariffs already in place, while the remainder, including China and Switzerland, could be taxed an extra 12.5%. Some categories of imports, including food, fuels, critical minerals, and USMCA-compliant goods from Mexico and Canada, would be exempt, as would be goods already taxed under Section 232, like autos, parts, steel, and aluminum. 

The earliest these tariffs could go into effect is July, creating a possibility of a seamless — at least theoretically — transition away from temporary 10% tariffs under Section 122, which expire July 24. Both tariffs are similar as to which categories of goods they exclude, and Section 301 duties tend to be relatively immune to legal challenges. 

We are also watching a separate Section 301 investigation into alleged excess industrial capacity in 16 economies, including the EU, China, Mexico, and Switzerland, the results of which are expected soon. It is an open question whether any duties that follow from that probe would stack on top of those proposed under the forced labor investigation. But if both tariffs were finalized, the administration could use them together to replicate much of the practical coverage of the Section 122 tariffs, albeit through a more durable legal architecture.

What We’re Watching: U.S.-China Board of Trade 

Details are emerging about the proposed U.S.-China Board of Trade, one of the main takeaways from the otherwise uneventful May summit between President Trump and Chinese leader Xi Jinping. The board is expected to cover about $30 billion worth of non-sensitive goods on each side, which could qualify for reduced tariffs — possibly as low as the “most favored nation” average rate of 3% that prevailed until Trump’s first wave of China tariffs in 2019. 

The administration is soliciting comments from industry and other interested parties on which categories of Chinese goods should be included without creating economic, national security, and supply chain resilience risks. Publicly announced discussions surrounding the proposed bilateral mechanism point to agriculture, aviation, and certain supply-chain inputs like critical minerals. The latter, as well as the specific mention of goods subject to tariff inversion between manufacturing inputs and final products (when the duty on finished goods is lower than the duty on the inputs used to make them), could matter to auto-parts and other industrial supply chains that include autos. 

The Board of Trade, expected to function in tandem with a Board of Investment intended to evaluate Chinese investments into non-strategic U.S. industries, appears to be the most tangible feature of the new strategic stability framework that is supposed to define the bilateral relationship from now on, or at least through the rest of the Trump term. The administration’s main goal is to keep the relationship in balance through November, considering that a trade “truce” that temporarily reduced tariffs on both sides expires just days after the midterms and has not yet been extended.

An uninterrupted flow of rare earths and critical minerals to U.S. companies and allies like Japan remains a concern, as does China’s potential response to the proposed new Section 301 tariffs described above and to various efforts to tighten export controls on advanced AI chips that are being pursued through regulation and as part of trade talks with Taiwan. Chinese retaliation on rare earths, semiconductors, or agricultural purchases could give the administration grounds to reinstate higher tariffs on Chinese goods, adding a layer of economic uncertainty. As the Board of Trade takes shape over the summer, with public comments due in July, we will be watching for the administration to frame it as a high-profile deliverable ahead of Xi’s proposed visit to Washington this fall.