Seven months into his second presidency, Donald Trump’s efforts to exert direct, personal authority over U.S. business are drawing comparisons to China-style state capitalism, albeit “with American characteristics.” Examples include a 10% government stake in Intel, a 15% stake in critical-minerals producer MP Materials, and a “golden share” in U.S. Steel. More controversial is the Trump administration’s deal with NVIDIA and AMD, which would allow limited sales of semiconductor chips to China in exchange for a 15% cut of revenue. Critics on both sides of the aisle warn that the arrangement risks incentivizing sales of dual-use technology to a strategic rival, undermining America’s edge in AI, and even violating the constitutional ban on export taxes. But the White House frames the Intel move as part of a broader strategy to create a sovereign wealth fund that could include more companies. Coupled with $1.5 trillion in pledged investments from Japan, the EU, and South Korea that Trump insists he will personally direct, the approach is putting a distinctly transactional, pay-to-play stamp on the U.S. economy that could last well beyond 2028.
Trump’s direct involvement in business is already unprecedented for an American president. He and his family have reportedly made $3.4 billion since his return to office, with more than $2.3 billion from cryptocurrency ventures alone, bringing his estimated net worth to about $10 billion. Over the past decade, his most loyal supporters — about 11% of U.S. adults — have consistently backed his commercial ventures, whether buying Trump-branded products or staying in his hotels, though many likely lost money on his crypto projects. His second inauguration drew $239 million in contributions, an all-time record, with many corporate donors later receiving favorable treatment. Trump also holds large personal stakes in Apple and NVIDIA, both of which have benefited from concessions his administration has extended to technology companies.
Preparations for the U.S.’s 250th anniversary next year are already generating an uptick in corporate contributions, widely seen as efforts to remain in Trump’s good graces. Coca-Cola, Goldman Sachs, Amazon, and Palantir have all contributed undisclosed amounts, while Chrysler brands signed on as exclusive automotive sponsors. These gestures fit into a larger system of measuring and rewarding corporate loyalty that continues to take shape, including administration-maintained “trackers” of which companies support Trump’s tax and spending law or announce “Trump effect” investments in U.S. manufacturing and innovation. Taken together, they signal that Trump’s direct interventions in the economy are not only deepening but also increasingly designed to pressure corporations to align with his political and social priorities — particularly with the midterm elections approaching.
President Trump is spearheading a campaign to redraw congressional maps in Republican-led states ahead of the 2026 midterm elections, aiming to cement his party’s hold on the House majority and advance his policy agenda in the second half of his term. About 40 congressional districts could be competitive this cycle, split roughly between Republicans and Democrats. In Texas, a mid-decade redistricting push could enable Republicans to flip as many as five House seats currently held by moderate Democrats. Similar efforts being weighed in Indiana, Missouri, Ohio, and elsewhere could create more safely Republican districts.
Across the aisle, California’s push to redraw its own electoral maps could help Democrats grow their margin by three to five seats. Other Democrat-led states like New York and Illinois could follow suit, threatening moderate, blue-state Republicans who were instrumental in delivering the House majority in 2024. Regardless, Republicans have a clear advantage in the total number of states that could ultimately redraw their maps,simply because there are more states with Republican trifectas (both chambers of the state legislature and a governor’s office) where Democratic-held seats could be in play.
In Texas, the new maps become official once signed by Gov. Greg Abbott, although legal challenges are expected. In California, a November 4 special election will let voters decide whether to temporarily replace an existing map drawn by an independent commission with a new, partisan one. The state’s Democratic governor, Gavin Newsom, widely assumed to harbor 2028 presidential ambitions, is framing the move as a direct rebuke to Trump’s increasing authoritarianism — the kind of decisive action Democratic voters say they want from their leaders.
The party is historically unpopular, with voter registrations down in 2024 (although possibly already rebounding) and voters skeptical that it has what it takes to defeat the Trump agenda. At the same time, Democrats are highly enthusiastic about voting in the midterms, and independents are slightly more likely to lean Democratic and say sitting Democrats in Congress deserve reelection. Time will tell whether Democrats’ retaliatory redistricting — in California and possibly beyond — marks the beginning of their own populist, anti-establishment makeover, persuading voters that they are willing to go beyond mere rhetoric and use whatever power they do have to win.
A series of recent actions by the Trump administration are intensifying pressure on wind energy projects across the U.S., casting doubt on the industry’s near-term outlook. Developers face several headwinds: an accelerated phase-out of clean energy tax credits created under the Inflation Reduction Act, federal reviews of offshore and onshore regulations, and new or proposed tariffs that could significantly raise turbine and component costs. These measures build on earlier steps, including a pause on new wind energy leases and a halt to project approvals on federal lands and waters. BloombergNEF estimates that, combined, they could drive a 50% decline in onshore wind installations through 2035 compared with a business-as-usual scenario.
More recently, the administration canceled a major wind farm in Idaho and paused three offshore projects near New York, Rhode Island, and Maryland, two of which were nearly complete — fueling concerns that reviews of projects approved under former President Biden could set a precedent for reversing prior permits or blocking approval of any future projects.
Wind currently supplies more than 10% of U.S. electricity, making efforts to constrain the industry appear at odds with Trump’s declared “energy emergency” and the rising demand from AI-driven data centers. The impact could be particularly acute in Republican-led states such as Iowa, Oklahoma, and Texas, which together stand to lose a significant share of the roughly $317 billion in planned investment now at risk.
In Congress, some centrist Republicans and lawmakers from wind-heavy states have spoken out in defense of tax credits and permitting stability. But the most consequential activity has been at the state level: Since January 2025, more than 20 states have advanced wind-related legislation or regulatory changes, with restrictive measures only slightly outnumbering those designed to support or protect projects.
Democratic-led states such as Massachusetts, and New York have moved to accelerate offshore wind development before credit eligibility narrows, while several Republican-led ones, including Arkansas and Oklahoma, have advanced bills tightening siting, permitting, or decommissioning requirements. With many federal actions facing legal challenges, the trajectory of U.S. wind energy will hinge on both the courts and the pace of state-level policymaking. We will continue tracking developments as the industry adapts to a shifting policy landscape.
“The postwar global order is not just obsolete; it is now a weapon being used against us,” Secretary of State Marco Rubio declared at his confirmation hearing at the start of Donald Trump’s second term.
Speaking in Riyadh in May, President Trump sketched an emerging America First world order, rejecting decades of bipartisan nation‑building and democracy promotion in favor of “commerce, not chaos” and pragmatic cooperation across political divides.
Most recently Vice President JD Vance distilled the Trump foreign policy doctrine into a three‑step formula designed to reassure the MAGA movement’s isolationist wing (of which he was once a part): One, articulate a clear American interest. Two, try to solve it diplomatically. Three, if that fails, use overwhelming military power — and exit before the conflict becomes protracted.
Since returning to office, Trump has applied this doctrine by revoking U.S. sanctions on Syria, ending airstrikes against Yemen’s Houthi forces, and joining Israel’s bombing campaign against Iranian nuclear sites — all in the name of a “better and more stable” Middle East that serves American interests. He has publicly disagreed with Israeli Prime Minister Netanyahu by acknowledging “real starvation” in Gaza as his hopes for a diplomatic solution diminish. He has pursued a reset with Russia’s President Putin to try to end the war in Ukraine through negotiations, and pressured NATO allies to more than double their defense spending and fund the latest tranche of military aid to Kyiv.
On trade, the Trump doctrine is manifesting itself through historically high U.S. tariffs and a series of roughly sketched agreements that have generated new federal revenue, vague multibillion‑dollar investment pledges, and leverage to pressure reluctant partners such as India and Switzerland to help the U.S. achieve its strategic objectives, including isolating Russia and China.
Time will tell whether the Trump doctrine proves more durable than efforts to define the Mar-a-Lago accord(a proposed plan to restructure global trade by weakening the dollar, reshaping debt, and linking national security to economic leverage), or more popular than Bidenomics. So far, Americans seem unconvinced: Trump’s net approval ratings stand at -10.5 percentage points on foreign policy, -12.9 points on the economy, and -19.7 points on inflation, according to recent polling averages.
Foreign policy rarely decides elections, but the 2026 midterms may hinge on whether the president can reset the terms of global trade in America’s favor without inflicting significant domestic pain. Economists note that tariffs take six to 18 months to fully register — which means voters may feel their impact just as campaigning moves into high gear.
During the Biden administration, a significant amount of spending went into clean‑energy manufacturing and infrastructure through new laws and subsidies. The Inflation Reduction Act alone spurred roughly $270 billion in manufacturing investments by mid‑2024. Six months into President Trump’s second term, the boom seems to be fading: Companies have scaled back or canceled more than $22 billion in projects in the first half of this year. The EV and battery sector has been hit hardest, with multi‑billion‑dollar factories canceled or paused in mid‑stream. By some estimates, at least $7.5 billion in planned investment has evaporated, including Kore Power’s $1.2 billion Arizona EV battery plant (cancelled) and AESC’s $1.6 billion South Carolina facility (postponed indefinitely). Together, the cancellations have cost around 16,500 jobs, mostly in Republican districts — a point Democrats are seizing on to argue that Trump’s tax and spending package is driving up costs and cutting jobs.
To be sure, some projects are moving forward, adding up to $21.1 billion in new capital investment announced in the past six months, although these tend to be smaller and less dependent on federal incentives. Even so, the outlook for EVs appears to be worsening. The Trump administration has revoked California’s emissions waiver (which would have required 80% of new vehicle sales in the state to be electric by 2035) and scrapped automakers’ penalties for failing to meet federal fuel economy standards. As a result, EVs are now expected to account for just 19% of U.S. new car sales by 2030, down from a 24% forecast in January and well below the Biden administration’s 50% target. New tariffs will likely raise vehicle prices by $2,000-$4,000, for both gasoline and electric models — but a growing pool of used EVs will make them accessible to cost-conscious drivers, powering the next phase of EV adoption.
The Trump administration’s trade deals with the EU, Japan, and South Korea are reshaping the global auto industry in complex ways while keeping uncertainty high. Beginning August 1, European and South Korean automakers face a 15% tariff on cars exported to the U.S., down from 25% but still far above the 2.5% rate in place before President Trump’s return to office. Japanese automakers are in a similar position, though Tokyo is pressing for an executive order to ensure that the 15% tariff is not “stacked” on top of separate tariffs on metals.
All three arrangements are “framework deals” rather than binding treaties, meaning the terms could still change. In Europe’s case, Trump has already threatened to raise tariffs to 35% if Brussels fails to deliver on its pledge to channel hundreds of billions of dollars into U.S. projects and purchases of American energy exports. The result is tariff relief for foreign automakers, but no guarantee that today’s terms will hold tomorrow.
For U.S. automakers, the outlook is mixed. They gain improved export access to Europe, which eliminated its 10% duty on American‑made cars, and Japan, which has pledged to open its market further. But at home they continue to face heavy headwinds: a 25% tariff on imported parts (unless they qualify for an exemption under USMCA rules of origin), plus 50% tariffs on imported steel, aluminum, and, soon, copper. Vehicles built in Canada and Mexico, already subject to a 25% levy, face the prospect of even higher rates, with Canada’s rising to 35% beginning August 8 while Mexico’s remaining at 25% as trade talks continue.
Since many automakers rely on cross‑border production, the new math could make it cheaper for foreign firms to ship finished vehicles into the U.S. rather than expand American operations — undercutting Trump’s stated goal of reviving domestic manufacturing. With the USMCA up for review in 2026, some analysts predict that intra‑bloc auto tariffs could ultimately settle closer to 7.5%, but until then the trade picture for the industry remains uncertain and fraught with risk.
In just the past month, three major developments have tested the cohesion of the MAGA movement and its loyalty to President Trump. First, Trump authorized U.S. support for Israeli airstrikes on Iran’s nuclear facilities, dashing the hopes of MAGA’s isolationist wing that had expected him to avoid new military entanglements in the Middle East. (Since returning to office, Trump has ordered nearly as many airstrikes as President Biden did in four years, if operations against Yemen’s Houthi forces are taken into account.)
Next, Trump approved new military aid for Ukraine to be routed through NATO allies, a major shift in policy toward a conflict that MAGA critics have long warned could spark World War III. Finally, the Trump administration appeared to retreat from an earlier promise to release all records related to convicted sex offender Jeffrey Epstein, prompting cries of “coverup” from across the MAGAverse. Initially, Trump’s handling of the Epstein issue drew sharp criticism from his base. But after The Wall Street Journal published an exposé detailing the lengthy association between the two men, Trump’s supporters quickly rallied behind him, dismissing the report as yet another hit piece from the mainstream media.
While Trump’s recent moves have raised concerns (including among MAGA-leaning groups like younger men, a key part of his 2024 coalition), there is little evidence that these issues are creating a lasting rift between the president and his supporters. His net approval on foreign policy stands at -20 percentage points, with 60% of Americans critical of his approach, but net support among Republicans has actually risen five points since March. Similarly, although 48% of the public are seriously dissatisfied with Trump’s handling of the Epstein records, just 36%, including 11% of Republicans, say the issue weighs heavily in their view of his presidency. By contrast, 61% cite immigration and 56% name inflation as issues that matter “a lot” in judging Trump’s performance; among Republicans, those figures are 51% and 43%, respectively.
For now, the Epstein saga remains a political inconvenience rather than a serious threat, distracting from the administration’s efforts to promote its landmark tax and spending package while giving Democrats an opening to portray Trump as protective of elite interests. Barring new revelations, it is unlikely to erode his support within the MAGA movement or emerge as a defining issue in the 2026 midterms, where kitchen-table concerns, particularly the cost of living, are again expected to drive voter behavior, just as they did in 2024.
Six months into President Trump’s second term, the economic fallout many economists feared from his tariff-heavy trade agenda is yet to materialize. Tariff revenues surged to record highs in June, helping produce the first monthly budget surplus since 2017 — a fiscal bright spot that belies the mounting deficit pressures unleashed by Trump’s sweeping tax and spending package. Major U.S. trading partners, except for China and Canada, have so far refrained from retaliating. (The EU is weighing a wide-ranging response to a proposed 30% U.S. import tax, though it could take months to implement in full.) Global brands appear to be absorbing some of the costs, softening the impact on American consumers and helping contain inflation, even as prices on staples like coffee climb.
Trump has touted a wave of manufacturing-related announcements as evidence of economic momentum, yet the labor market picture is more complicated, in part due to his administration’s aggressive immigration enforcement agenda. Market analysts argue that Trump’s tariff policy runs counter to his industrial ambitions: If the goal is a manufacturing revival and AI dominance, raising costs on steel, aluminum, and other materials critical to building factories and data centers is an unlikely place to start.
Amid persistent economic uncertainty, public sentiment is measurably turning against the president’s economic policy. During Trump’s first term, confidence in his economic stewardship rarely dipped into negative territory. Today, his net approval on the issue stands at -12.3 percentage points, according to an average of recent polls. Three-in-five Americans disapprove of his tariff policy, and 57%, including two-thirds of independents, believe he lacks a clear plan on trade. Majorities say the tariffs are hurting rather than helping the economy, both in the short term (65%) and the long term (52%). Even among Trump’s own 2024 voters, only half believe that tariffs on China will benefit U.S. companies — a key premise of the administration’s protectionist approach — while 25% expect them to cause damage.
Importantly, most voters think the president is focused on the wrong priorities: 70% believe he is not doing enough to reduce prices, and 64% disapprove of his handling of inflation, his worst rating on that issue to date. Approval among Republicans is also eroding, with 75% now saying he has the right priorities, down from 87% in March. Taken together, the data point to a widening disconnect between Trump’s trade posture and public opinion — underscoring a growing demand for a shift in focus, away from rectifying trade deficits and achieving a manufacturing boom and toward the everyday economics of affordability.
President Trump is increasingly expected to delay the August 12 deadline to reach a trade deal with China (at which point U.S. tariffs on Chinese imports could snap back to 145%, last seen in April), a move that reflects both tactical flexibility and uncertainty about his administration’s long-term strategy. While early second-term rhetoric pointed to a broad structural overhaul of U.S.-China trade via blanket tariffs linked to currency policy and national security considerations (known in conservative circles as the Mar-a-Lago accord), recent signals suggest Trump may be reverting, at least partially, to a more transactional approach resembling his first term. Reports indicate that he is now prioritizing quick wins with Beijing, such as loosening export restrictions on less advanced AI chips, instead of addressing deeper trade imbalances or technology decoupling. This shift appears motivated by a desire to secure a summit with Chinese President Xi Jinping later this year (possibly ahead or on the sidelines of an APEC meeting in South Korea in late October) and avoid escalation ahead of the 2026 midterm election season.
Trump’s changing approach to China (complete with praise for its efforts to tighten control on fentanyl, an issue he used to justify his initial 20% tariff on Chinese goods) appears to be out of sync with some of his administration’s recent actions targeting Chinese drones, graphite, undersea telecommunications cables, and purchases of American farmland. In Congress, several proposals, some of them bipartisan, seek to crack down on the smuggling of AI chips and other advanced U.S. technology to China and other adversaries. This is taking place as China’s exports to the U.S. are beating expectations as businesses are rushing to capitalize on the tariff truce (which could now be extended for another three months, just like the TikTok sale deadline). Elsewhere, Beijing is moving aggressively to fill the vacuum left by the Trump administration’s budget cuts to foreign aid and soft power programs like Voice of America, undercutting the U.S.’s influence across much of the Global South. All in all, whether Trump is biding time for a broader realignment or settling into a Phase-One-style reset remains unclear, but for now, the U.S.-China relationship seems to be gliding toward a more stable, if fragile, diplomatic window.
“Promises made, promises kept” was a central theme of President Donald Trump’s July 4 speech in Iowa where he touted his signature tax and spending package that contains the majority of his legislative priorities, including a permanent extension of his 2017 tax cuts. The new law is expected to add $3.3 trillion to the national debt over the next ten years, cut more than $1 trillion in social spending, and dramatically reduce incentives for clean energy manufacturing and generation.
Passed with Republican-only votes, the legislation drew sharp criticism from across the party: Moderates warned the social spending cuts would harm vulnerable constituents, populists feared a backlash from working-class voters central to Trump’s political base, and fiscal conservatives argued the cuts did not go far enough. Yet in the end, nearly all Republicans rallied behind it — underscoring the president’s enduring dominance over his party.
Polls show that Americans, aside from hardcore MAGA supporters, see relatively little that is “beautiful” about Trump’s bill. Opposition outweighs support by a wide margin (anywhere from 21 to 31 percentage points), which is even greater among independents and Democrats. Almost half of voters (49%, including 54% of independents) believe it will hurt their families, although 23% say it will help. Republicans are split: While 61% like the new law, two-thirds of non-MAGA Republicans view it unfavorably — a relatively small group that could still be critical in close races during next year’s midterm elections.
Both parties believe they have a compelling narrative heading into the mid-terms. Democrats aim to spotlight the law’s regressive tax cuts and deep reductions to social safety net programs, mindful that Republicans lost the House in 2018 after attempting to repeal then-President Obama’s healthcare reform. Republicans, meanwhile, contend that tax cuts and increased border security funding enjoy broad support while other provisions could be framed as efforts to eliminate waste, fraud, and abuse.
Adding unpredictability is Elon Musk’s decision to form a new political party, expected to reflect his strong criticism of Trump’s fiscal approach. Grok, the AI chatbot developed by Musk’s company xAI, suggests that a right-leaning third party could shift tight House or Senate races toward Democrats in 2026 and divide the Republican vote in 2028 — if it can achieve ballot access in key states and secure funding. Despite Tesla’s ongoing challenges, Musk still has the resources to disrupt America’s two-party system, even if his party fails to gain any real power.
President Trump’s signature bill includes roughly $170 billion to fund his immigration and border security agenda for the rest of his term, including $46.5 billion to fortify the U.S.-Mexico border wall, $45 billion to expand a network of detention centers (including one in Florida dubbed Alligator Alcatraz), and $30 billion to hire additional law enforcement staff. This comes at a time when Americans outside Trump’s MAGA base increasingly question his aggressive policies, pushing net approval of what remains the president’s strongest issue into a negative territory (currently at -3 percentage points).
Among Democrats, who shifted right on immigration since 2020, support for Trump’s approach is down 16 points since February. Among independents, the decline is 25 points, and 56% of independents in swing congressional districts say the Trump administration’s hardline tactics are a bridge too far. To be sure, most Republicans back Trump on immigration, including 61% that support large-scale deportations, but 31% favor a pathway to legal status for undocumented immigrants, up 9 points since December 2024.
Americans are concerned that Trump’s immigration policies will weaken the economy (46%) and create additional costs for taxpayers (53%), contributing to a downward trend in the president’s net approval rating on the issue (currently at -13 points). Economists predict a slowdown in industries historically reliant on immigrant labor, especially when an enforcement windfall in Trump’s new law is factored in.
Still, Trump and his party remain ahead of Democrats on immigration, 41% to 34%, and are performing even stronger on border security, a less-partisan issue where the president’s approval stands at 53%, bolstered by a steep decline in illegal border crossings since he took office. But among Democrats, there is a growing will to push back against what they view as the administration’s enforcement overreach while supporting more commonsense measures like deporting immigrants who committed violent crimes. Time will tell whether the party manages to harness popular discontent with Trump’s punitive immigration policies as a central theme in its 2026 midterm strategy — possibly by playing up his disregard for civil rights and the rule of law that could threaten U.S. citizens and noncitizens alike.
Instead of “90 deals in 90 days” White House officials promised after President Trump’s announcement of a steep round of tariffs in April, we are looking at a protracted, disjointed process that may, or may not, gain momentum before the Trump administration’s new deadline, August 1 — which may, or may not, be firm.
As of this writing, the administration is working to finalize loose framework agreements it has reached with the UK, China, and Vietnam. More than 20 other nations, including Japan and South Korea where trade talks have stalled, could be subject to a new tariff of 20% to 40% beginning August 1 if they fail to negotiate in good faith. Brazil could be hit with a 50% duty over its alleged censorship of U.S. social media platforms. Others, like the EU, Canada, and India, seem close to reaching an interim agreement, although possible exemptions for sensitive sectors, such as European autos, spirits, and aircraft, remain to be ironed out. One proposal would allow EU automakers that produce and export cars from the U.S., or make additional investment stateside, to import more of their own vehicles at tariff rates below the current 25%, but no decision on autos (or steel and aluminum that are subject to a 50% tariff) has been made.
Trump’s hardline use of tariffs as leverage, often to secure concessions on issues loosely related to trade, has yielded mixed results. It succeeded in pressuring Canada to abandon its proposed digital services tax targeting major U.S. tech firms, but efforts to push Japan, India, and South Korea into reforming their agricultural policies have stalled negotiations. Meanwhile, Trump’s strategy to isolate China by threatening tariffs on goods rerouted through third countries in Asia is heightening tensions just as both sides begin easing some trade restrictions, including Chinese curbs on rare earth exports and U.S. limits on sales of semiconductor design software, ethane, and aircraft engines. Rising friction with BRICS nations may further solidify their alliance and drive U.S. trading partners toward alternative markets. Yet despite the new deadline, uncertainty persists — both over Trump’s next moves and over how he might define a “deal” when another win is needed to showcase on Truth Social.
President Donald Trump, an avowed peacemaker who has struggled to quickly end the wars in Ukraine and Gaza, now has the first successful manifestation of his doctrine of “peace through strength.” A brand-new (and still fragile) ceasefire between Iran and Israel, which followed U.S. airstrikes on Iran’s nuclear facilities, likely puts an end to a putative rift between hardcore MAGA isolationists and those who subscribe to Trump’s new, hawkish definition of America First.
Even before the ceasefire was announced, Republicans in Congress overwhelmingly supported Trump’s decision to strike Iran’s nuclear sites. So did the Republican voters across the country, 68% of whom approved of the strikes, compared to 16% of Democrats and 27% of independents. The latter, a key swing group that backed Trump in 2024, seemed receptive to his rationale for bombing Iran (their support rose 16 percentage points after it took place) despite being less interventionist overall. Time will tell whether this translates into a measurable boost in support for the controversial items on the president’s domestic agenda that independents view negatively, such as immigration enforcement (net approval of -18 points), inflation (-50 points), or his signature tax and spending package currently making its way through Congress (-51 points).
The White House is planning a “victory tour” to mark Trump’s first major foreign policy achievement of his second term, beginning with the NATO summit in the Netherlands this week and ramping up domestically to serve as an unofficial start of the 2026 midterm campaign. In the meantime, Democrats in Congress continue to grapple with internal divisions as they try to push thought a resolution to bar the Trump administration from taking further military action without congressional approval. Several are circulating in the U.S. Senate and House, but none are likely to pass as the Republican leaders hunker down for a final series of votes on the tax and spending legislation which the president expects to be on his desk by July 4. Amid last-minute disagreements to be ironed out and reported ceasefire violations on both sides, the coming days and weeks could come to define Trump’s second presidency while ushering in a fundamentally new era for the Middle East, its security, and its dominant powers.
Rare earth minerals remain at the center of the ongoing trade talks between Washington and Beijing. The “London framework,” which reinforces the “Geneva consensus,” has reset the trade relationship roughly to where it was before a tit-for-tat tariff escalation in April. U.S. duties on Chinese imports have been reduced to 55% from 145% for 90 days, and possibly longer (although certain product categories remain subject to tariff stacking), while some export controls have been relaxed in exchange for a six-month loosening of restrictions on Chinese rare earth minerals and magnets.
To date, China has granted export permits to select suppliers, including those serving Detroit’s Big Three, but the approvals are narrow in scope, time-limited, and strategically controlled, preserving Beijing’s leverage. Many American companies are still waiting for permits while others face restrictions on selling to China (which the U.S. has been similarly slow to relax and could expand in the future), underscoring an urgent need for alternative sources and domestic production capacity.
In absolute terms, U.S. rare earths imports are small, about $170 million in 2024, but they are essential for manufacturing critical auto components and weapons systems, which remain outside the scope of the tentative trade deal with China. If no firm agreement is reached within six months, these and other industries would face serious disruption, including higher component costs and production halts due to shortages of critical materials (like neodymium and dysprosium used in EV motors).
The Trump administration is exploring ways to use the Defense Production Act to tap financing and other support for domestic rare earths-related projects, mandated under an executive order signed in March, although a specific course of action is yet to be determined. Trump officials are also reviving Biden-era efforts to create a domestic supply chain for rare earth magnets, soliciting proposals to bolster domestic supplies of the magnets within the next six to 12 months. But even though domestic production efforts are growing and supply diversification is underway, they are insufficient to fully offset risks to the U.S. economy in the near-term, positioning the issue as a major irritant in the U.S.-China relations at least through the rest of Trump’s presidency.
The Senate portion of President Trump’s tax and spending package is coming together amid a push by moderate Republicans to preserve some clean energy subsidies and industry lobbying to protect projects across the U.S. battery belt and ensure sufficient energy supply to power America’s AI growth.
The latest draft by the Senate Finance Committee follows the U.S. House lead in proposing a tight phaseout period for wind and solar projects that begin construction by 2028, but extends tax incentives for nuclear, hydropower and geothermal projects that start construction as late as 2035.
Consumer tax credits for new electric vehicles would now phase out within 180 days after the bill becomes law, and for used vehicles within 90 days. The Senate Finance version preserves a tax break for car loan interest for U.S.-assembled vehicles first introduced in the House, but omits a provision to establish EV and hybrid vehicle annual registration fees, which could still be included at a later stage.
Business-friendly proposals include bringing back transferability, a policy that allows energy project sponsors to transfer their credits to a third party, and loosening some anti-China rules by narrowing the scope of what would be blocked from claiming the credits.
Any changes passed in the Senate would require approval in the House, where hardline conservatives advocate for an end to any future spending under the Inflation Reduction Act, potentially upsetting the delicate balance of support that allowed Speaker Mike Johnson to force the all-Republican bill through last month. (To be clear, the tax and spending package, which on the whole is largely unpopular, includes provisions that are even more divisive, such as cuts to public health insurance and nutrition support programs that serve low-income Americans.)
Republican leaders are operating under a tight deadline, hoping to pass the bicameral compromise legislation and deliver it to President Trump’s desk by July 4, but that may have to be pushed further into the summer as they grapple with intra-party disagreements and procedural hurdles. We look forward to reviewing the final bill and will let you know of any important developments.
Coming off a Middle East tour marked by royal-grade splendor, President Donald Trump is intent on positioning his statesmanship as singularly transformative, regardless of whether the reality matches his rhetoric. To be sure, his message of “commerce, not chaos” yielded anywhere between $700 billion and $4 trillion in investment commitments for U.S. tech companies (concerns about possible spread of advanced AI chips to China notwithstanding). His meeting with Syrian leader Ahmed al-Sharaa set in motion a process of lifting sanctions on Syria, reaping bipartisan praise.
Domestically, inflation numbers are cooler than expected, tariff revenues are on the rise, the job market remains strong, and unauthorized border crossings are at a historic low (following a trend that began under the Biden administration). Despite an “excellent” phone call with Russia’s President Vladimir Putin, Trump is stepping back from the Ukraine ceasefire talks as his focus shifts toward Iran, leaving a bipartisan package of sanctions on buyers of Russian energy to languish in the Senate.
Rather than rely on Congress with its slim Republican majority, Trump has been using executive power to advance major policy changes, such as overriding trade deals (including those signed by his first administration), dismantling federal agencies, or imposing sweeping immigration restrictions. Few of his actions have been codified into law and many have been postponed, scaled down, subject to legal pushbacks, or moving far slower than he expected.
At their current level, Trump’s tariffs are unlikely to replace income taxes as the main source of government funding, which he said they would. Instead, his officials have acknowledged that tariff costs would be borne by U.S. consumers, to the tune of $2,300 per household per year. Setbacks to the president’s tax-and-spending bill are pushing it off course from what Republican leaders in Congress have pledged to deliver, threatening to expand the budget deficit further and precipitating a downgrade to America’s last AAA credit rating.
MAGA voices contend that the Trump agenda’s make-or-break phase is between now and September, as the federal budget package takes shape and precedent-making legal cases wind their way through courts. After that, tariff-related price increases could begin pushing congressional Republicans into a midterm campaign mode. Judging by the polls, the Trump administration’s trade deals with China and the UK are clearly resonating, driving an uptick in optimism about the economy and cutting into the president’s net disapproval score on inflation and tariffs. Perhaps even more so than tax cuts and legal precedents, Trump’s ability to “rebalance” the U.S.-China trade without upending Americans’ economic fortunes could help determine how much of his agenda he can actually deliver and how “transformative” that might be.
The Trump administration’s goal is not a “generalized decoupling from China” but rather a decoupling for “strategic necessities” like steel, critical medicines, and semiconductors, according to Treasury Secretary Scott Bessent who has been managing President Trump’s tariff policy. Following the May 10 talks in Geneva, the administration’s tariffs on most Chinese goods stand at 30%, far below the 145% “reciprocal” rate that went into effect April 9 but higher than the 12% average rate during the first Trump term.
Analysts predict that the levies will remain at 30% through late 2025, high enough to wipe out 70% of Chinese shipments to the U.S. in the medium run, but no longer constituting a de-facto trade embargo. They also expect the negotiations to continue beyond an initial 90-day timeframe (similar to the 75-day timeframe for TikTok talks that Trump has extended), giving the two countries time to tackle mutual irritants like fentanyl or pre-existing non-tariff trade barriers on both sides.
Bessent has warned that any trading partners that do not negotiate in “good faith” could see a return to the tariff rates initially imposed on April 2. The Chinese government often emphasizes “sincerity” in negotiations, but recent developments raise questions about either side’s commitment to de-escalation.
Rather than pause export restrictions on rare earth minerals, China has simply extended eligibility to some U.S. firms but is said to be too slow issuing export licenses. In the meantime, the U.S. has declared the use of Huawei’s advanced AI chips a violation of American export controls. Both nations are pressing ahead with new, category-specific tariffs, with Beijing imposing anti-dumping duties on certain U.S. plastics and the Trump administration considering anti-subsidy duties on key battery components and levies on pharmaceuticals and active drug ingredients. Time will tell if such actions will be viewed as a breach of the consensus reached in Geneva, or a reflection of deep distrust and longstanding disagreements on trade, national security, and other issues that are unlikely to be significantly eased over the next 90 days.
Despite bipartisan opposition and intense lobbying from affected industries, an early sunset of clean energy provisions in the Inflation Reduction Act seems certain after the 2026 federal budget legislation passed the House with all Republican votes. The final text would phase out consumer EV tax credits at the end of 2025 (except for manufacturers that fall under a 200,000 new EV cap, which would be eligible through 2026). Incentives for clean power projects would phase out as early as 2025 because funds would only be available once a project starts producing energy, as opposed to when construction starts.
As of 2028, most clean energy developers would no longer be able to transfer their tax credits, reducing their ability to raise funds. Credits for wind components would end after 2027, and incentives for all types of clean tech manufacturing would face aggressive “foreign entity of concern” restrictions targeting adversaries like China. All IRA funds for EV, battery, and other clean tech projects not spent by the Energy Department and other federal programs would be reallocated, as would be any leftover EPA diesel emissions reduction funds. (Separately, car loan interest would be tax-free through 2028 for vehicles that are built in the U.S.)
Americans are divided on what should be done about the IRA clean energy provisions, with 44% in favor of removing tax breaks for clean power projects and EV purchases and 39% against. (By contrast, 60% support eliminating taxes on car loan interest.) The issue is just one of several points of contention between conservatives trying to cut spending and reshape federal priorities in line with the Trump administration’s agenda, and moderates pushing to preserve public benefit programs and low-carbon energy jobs their constituents rely on.
The House legislative text is certain to face changes in the Senate, where centrist Republicans, whose votes are critical to passing the package by simple majority, argue that an early phase-out of clean energy tax credits would negatively impact emerging technologies and domestic supply chains. We will be watching the legislation take shape over the next few weeks, and will keep you informed about how the IRA era ultimately ends.
