Nearly three weeks in, President Donald Trump’s war with Iran has sent economic and political shockwaves around the world while barely shifting the domestic political landscape.
Most Americans oppose the war and want it ended as quickly as possible, but Republican voters — especially self-identified MAGA supporters — remain united behind the president despite outspoken dissent from some figures on the far right. Trump’s net job approval rating remains firmly in negative territory, at -15 percentage points (40% approve vs. 55% disapprove), according to an average of recent polls, as do public views of his handling of the economy (-19 points) and inflation (-24 points).
Voters overwhelmingly expect the war to carry a steep price tag, raising gasoline prices and the overall cost of living. Importers also warn that the continued closure of the Strait of Hormuz could fuel inflation across the broad, eventually leading to higher food prices.
Trump has signaled that he is ready to bring the war to a speedy end, but his decision to postpone a visit to Beijing, previously scheduled to begin March 31, suggests he expects hostilities to continue at least until then. Some administration officials appear to believe U.S. involvement and the broader instability in the Middle East could last until September, even if the conflict shifts to a lower-intensity phase. In the meantime, Trump’s focus on Iran threatens to set back other parts of his legacy-building foreign policy agenda, diverting attention from peace efforts in Gaza and handing Russia a minor windfall from loosened restrictions on oil sales, initially designed to help bring about a Ukraine ceasefire.
As the operation drags on, major questions remain unresolved, including the administration’s overarching military objectives (which 62% of the public believe were never properly articulated), the likelihood of ground troop deployment (opposed by 64% of voters, including 36% of MAGA supporters, a plurality), and the possibility of terrorist attacks on domestic soil (which 77% consider very or somewhat likely). The larger political question is whether Democrats can turn their critique of an unauthorized, strategically incoherent, and costly “war of choice” into a forward-looking campaign message that connects foreign policy to voters’ deeper anxiety about rising prices, economic drift, and a presidency that increasingly looks both reckless and overextended.
Rarely does a single technology become a potent electoral issue (rural electrification in the 1930s is one such example). This year, AI is emerging as a true kitchen-table issue in a midterm election dominated by cost-of-living concerns, acting as a proxy for rising power bills, white-collar job anxiety, and an increasingly uneven distribution of economic gains and political influence stemming from America’s tech boom.
A majority of voters, 57%, believe risks of AI outweigh its benefits, and 63% expect the technology to reduce overall employment. Republican voters seem more willing to trust AI than Democrats, 41% to 36%, but neither party holds a clear advantage on public perceptions of its ability to manage AI. In fact, a plurality of voters, 33%, say they trust neither Republican nor Democratic Party to do a good job on the issue.
The second Trump administration has made an explicit bet on AI as a pillar of economic revival, pairing the language of national strength and competition with China with a deregulatory, pro-buildout agenda designed to speed infrastructure deployment and reduce regulatory friction.
House Republicans tried to impose a 10-year moratorium on state laws limiting or regulating AI models as part of President Trump’s 2025 tax-and-spending package. Trump later signed an executive order aimed at overriding “onerous” state AI laws, undercutting AI safety efforts in Republican-led legislatures such as Utah and Ohio even though blue states like California and New York are likely to be the primary targets.
In Congress, support for AI guardrails has been notably bipartisan, including an emerging set of proposals focused on the technology’s effects on the economy and workforce. Heading into the midterms, that creates an opening for populist “pay your fair share” arguments already being tested by both parties: Trump recently announced a commitment from major tech companies to fund the power plants and grid upgrades needed for their data centers, while Democrats such as Virginia Gov. Abigail Spanberger have linked affordability, utility costs, and data center expansion more directly.
The donor landscape is similarly cross-partisan. AI money is already entering the midterms, although it is backing rival policy camps rather than a specific party or “pro-AI” candidates more generally. On one side are frontier labs, venture capital, and industry-backed groups like Leading the Future seeking a single national framework permissive enough to prevent a patchwork of state rules. On the other are groups like Anthropic-backed Public First willing to fund candidates who favor guardrails, state flexibility, and more visible public constraints.
At least for now, the pro-acceleration side appears better capitalized, but the guardrails side may have the stronger public-facing argument, driven in part by rising uncertainty over how much AI is contributing to the softening U.S. job market. Regardless, AI is now firmly part of the political landscape, and the way it resonates in this year’s midterms will offer a preview of how both parties may frame and fight over it in the 2028 presidential race.
By late April, the U.S. customs agency expects to begin processing refunds on an estimated $166 billion in President Trump’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which the Supreme Court ruled unlawful in February. In a four-step process, importers — roughly 333,000 of them, including FedEx, Prada, Nissan, and BYD — would file a declaration listing the entries on which they paid IEEPA tariffs. Customs would then review those entries, calculate duties and interest, and issue a single electronic refund from the Treasury Department for each importer, regardless of how many separate entries it had made. It remains unclear how long the full process could take, considering that the Trump administration could choose to appeal the March 4 order at the Court of International Trade, which created the legal basis for refunds (and which is currently suspended while the government builds a new refund portal), adding further delay and uncertainty.
Trump has made clear he opposes returning any tariff money, framing refunds as rewarding unfriendly foreign countries and companies while weakening a key policy tool meant to protect U.S. industry and bargaining power. Senior officials, including Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, have sought to recast the issue in a populist light, suggesting that refunds should flow directly to consumers rather than corporations — an echo of Trump’s earlier proposals to pay out tariff revenue as consumer rebates or military bonuses. That argument has some public appeal: 43% of voters, a plurality, want any refunds to go directly to consumers, and 72% do not trust companies that receive refunds to pass any savings off to consumers despite some corporations’ public pledges to do so. Still, trade and legal experts say consumer lawsuits seeking refunds for tariff-driven price increases remain a long shot, in part because of the difficulty proving that a specific price increase was caused by a specific tariff. We will be watching this issue and let you know of any important developments.
Nearly a week into the U.S. war with Iran — precisely the kind of open-ended, costly military engagement President Donald Trump has repeatedly pledged to avoid — the White House has yet to articulate a consistent strategic rationale for joining Israeli strikes on Iranian targets for the second time in less than a year. In June 2025, U.S. involvement was framed narrowly around degrading Iran’s nuclear capabilities, helping push Israel’s twelve-day air campaign toward a ceasefire that held until now. This time, the Trump administration’s stated objectives have vacillated between preempting an “imminent threat” to U.S. forces, limiting Tehran’s ability to develop nuclear and long-range weapons, and regime change. It has offered little clarity on the likely duration of the conflict or whether it could involve U.S. ground forces, and left open a question of U.S. casualties which Trump has suggested could rise if fighting continues.
Early data indicates the operation is unpopular. Between 50% and 59% of voters disapprove, according to various polls, and 51% say Trump’s handling of Iran has made the U.S. less safe. A majority (59%), including 68% of independent voters, say they do not trust the president to make the right decisions about the use of force in Iran. These views broadly resemble public reactions to the June 2025 strikes and the U.S. incursion into Venezuela earlier this year, underscoring persistent skepticism toward overseas military action. (Broad support for the 2003 invasion of Iraq remains a notable exception.) Republicans are more supportive, but a meaningful minority say Trump lacks a clear plan (17%) or have little or no trust in his decision-making on Iran (14%). They are also evenly divided on whether U.S. involvement could become long-term.
Republicans in Congress, including some who opposed Trump’s actions in Venezuela, have largely rallied behind him. But outside the party establishment, prominent members of MAGA’s isolationist wing have argued that the administration’s approach contradicts the America First ethos and that it has failed to make a persuasive public case for escalation. If the conflict drags on, it could deepen tensions within Trump’s coalition and reopen disputes over what America First should mean in practice and who best represents it within the party. Further U.S. casualties and potential domestic threats such as last weekend’s shooting in Austin, Texas, could add strain just as midterm campaigning accelerates. As long as fighting continues, Trump and congressional Republicans may also find it harder to keep the focus on cost-of-living issues, which are widely expected to matter most to voters come November.
In practical terms, the Supreme Court ruling canceling President Trump’s tariffs under the International Emergency Economic Powers Act (IEEPA), and the administration’s move to impose a temporary, across-the-board 10% duty under Section 122 of the Trade Act of 1974 (soon to become 15% for most countries, except possibly the EU), has produced relatively little immediate change for businesses or consumers. The average effective tariff rate remains high at about 13%, down from roughly 16% before the IEEPA ruling. That rate could fall to about 9% if the Section 122 tariff expires after 150 days and is not replaced or extended by Congress.
The ruling does not affect tariffs imposed under other authorities, including Section 301 (used to address unfair trade practices and heavily concentrated on Chinese imports) and Section 232 (national security tariffs covering products such as steel, aluminum, autos and parts). Section 232 goods are exempt from Section 122, as are USMCA-compliant goods from Canada and Mexico, reducing the risk of “stacking” on top of existing tariffs. Other categories, including critical minerals and other sensitive inputs, are also carved out from the new Section 122 surcharge.
Even so, the ruling and the Section 122 response introduce meaningful legal and economic uncertainty for importers and global supply chains. Like IEEPA tariffs, Section 122 is legally untested, making court challenges likely — although its brief duration makes it possible that it expires in July before litigation reaches a decisive stage. For importers, claiming refunds for IEEPA tariffs — more than $175 billion in total, over 60% of all tariff revenue received in 2025 — could take much longer, considering that the Supreme Court did not specify how that should be done. Politically, both parties are staking their own messaging around the issue: the administration is exploring ways to preserve some revenue to help finance tax policy enacted last year, while Democrats are pressing for rapid refunds and tying the controversy to cost-of-living pressures.
The administration has indicated it may expand tariffs under Section 301 and invoke Section 338 of the Tariff Act of 1930, which allows country-specific levies of up to 50% in response to discriminatory trade conduct. For consumers, economists expect prices to grow in the near term, upping the pressure on Republicans in congressional districts where manufacturing and agriculture have been hit the hardest by the trade measures. Polling shows Americans disapprove of Trump’s tariffs by a 30-point margin (34% in favor vs. 64% opposed), including nearly three-quarters of independent voters and about a quarter of Republicans. Yet voters are divided on who they trust to better handle the cost of living, with equal shares naming Trump (32%) and Democrats in Congress (31%), while 33% say they trust neither. This dynamic creates an opening for both parties: Republicans can argue that tariffs are part of Trump’s broader negotiating strategy, while Democrats can tie continued price pressure to household budgets — all but ensuring that tariffs remain a major pressure point through 2026.
A looming legal decision on whether Congress can cancel California’s Clean Air Act waiver could leave automakers navigating a split U.S. emissions landscape, potentially requiring significant adjustments in costs, product plans, and EV strategy. At the center is California’s long-standing ability — via waivers granted by the Environmental Protection Agency — to enforce more stringent vehicle pollution standards than the federal government, an approach followed by 11 other states.
California is challenging Congress’s use of the Congressional Review Act to nullify the waivers, arguing it wrongly treated EPA waiver decisions as “rules” eligible for fast-track repeal. The Trump administration is seeking to get the case dismissed while pursuing a broader rollback of federal climate and vehicle regulation, including EPA’s moves to rescind the 2009 greenhouse gas “endangerment finding” and repeal federal tailpipe emissions standards for cars and trucks it underpins. If that rollback survives its own legal challenges, federal oversight of fleet-wide emissions would largely shift to Corporate Average Fuel Economy (CAFE) rules.
As the case remains unresolved, automakers continue to make major business decisions under uncertainty. The California Air Resources Board (CARB) has told manufacturers they can decide for now whether to follow the new standards, while warning that penalties could apply later for noncompliance if the state ultimately wins; many are reportedly choosing to comply anyway. For automakers, the outcome could reset EV sales requirements across a large share of the U.S. market, alter compliance costs, and change the value of regulatory credits — a particularly important consideration for EV-only companies like Tesla that generate revenue by selling surplus credits to other automakers.
Two weeks ago, a Democrat won a state-level special election in Texas, flipping a solidly Republican seat, an outcome driven in part by a leftward shift among Latino voters increasingly disillusioned with the Trump administration’s immigration agenda. More broadly, Democrats won or outperformed in roughly 90% of key elections held in 2025, strengthening the party’s standing in areas that had moved rightward and helped reelect President Donald Trump.
Today, 13 Democrats represent congressional districts Trump carried, compared with just three Republicans representing districts won by Kamala Harris. Democratic officials are nonetheless targeting 44 Republican-held seats this November, citing continued electoral momentum and President Trump’s weak approval rating (42% approve, 55% disapprove).
Redistricting efforts in Virginia and Maryland could, in theory, put as many as five additional House seats within Democrats’ reach, though the timeline is extremely tight. At the same time, Republicans’ recent gains with Latino voters could continue to erode, limiting the upside of a newly redrawn congressional map in Texas that is designed to net the party up to five additional right-leaning seats in Hispanic-heavy districts.
Polls show Democrats ahead by about 5 percentage points on the generic congressional ballot, a measure of whether voters prefer a Democrat or Republican to represent them in the House. That advantage has been growing, but it remains below the six-to-seven-point lead Democrats held at a similar moment in 2018, the last cycle in which they captured the House in a midterm election.
Public opinion favors Democrats on the two issues central to their midterm message: voters prefer Democrats’ approach to healthcare (+21 points, unchanged since November 2025) and affordability (+14, up 4 points). By contrast, Republicans’ edge has narrowed on border security (down to +15 from +29 in November) and immigration (down to +5 from +16), both of which are central to the Trump agenda.
If discontent with the administration’s mass deportation push continues to rise, potentially alienating swing voters and soft Trump supporters, it could become a persistent liability for Republicans, especially given ongoing internal disagreements over the most effective messaging.
To be sure, much could change before November. Voters’ preferences for which party should control Congress tend to solidify by mid-summer in a midterm year. This gives Democrats time to sharpen their message on the economy, immigration, and crime — traditional Republican strengths where the party may now have an opening — while continuing to recruit and elevate candidates with demonstrated crossover appeal, which has been critical to the recent string of Democratic wins. How durable these shifts prove to be over the next several months will likely determine whether the 2025 results were a temporary rebound or the foundation of a broader political realignment.
Against a backdrop of relative calm in the U.S.-China relations, the Trump administration has announced important steps aimed at reducing China’s dominance over global critical minerals supply chains. Project Vault, a nearly $12 billion stockpile of more than 50 minerals the U.S. government considers critical, is designed to protect U.S. manufacturers from supply disruptions and sharp price swings by securing access to strategic raw materials such as rare earths, lithium, uranium, and copper. It is structured as an access-and-storage model in which participating companies will pay fees and ongoing costs while the program procures and stores materials they need, aiming to maintain roughly 60 days of emergency supply of minerals.
Several top-tier manufacturers in the autos, batteries, industrial equipment, and electronics sectors have already signed up, including GM, Stellantis, Lockheed Martin, Boeing, and GE Vernova. GM CEO Mary Barra’s presence at the White House announcement points at the issue’s relevance for the auto industry, which has faced intermittent disruptions from rare earths shortages, most recently last fall before the U.S. and China established the October 2025 trade truce.
The administration also announced initial steps toward establishing a trading bloc with allies, including the EU and Japan, that would use tariffs and other measures to build a price-stabilizing architecture for critical minerals, speed up development, and expand access to financing. As part of that effort, the U.S. agreed to develop action plans with the EU, Japan, and Mexico aimed at creating coordinated trade policies, including border-adjusted price floors, standards-based markets, and price gap subsidies to mitigate supply chain vulnerabilities.
With a 30-day timeframe for a memorandum of understanding with the EU and a 60-day target with Mexico, the administration aims to have a tentative framework in place by April, when President Trump is expected to head to China for a meeting with President Xi Jinping.
Coupled with the agreements the U.S. signed last year with Australia, Japan, and others, these efforts could go a long way toward eroding China’s hold on critical minerals supply chain bottlenecks. Beijing’s response has been critical, and even if the broader relationship stays calm, the bloc-style push is likely to keep critical minerals near the center of the bilateral agenda.
A year since President Trump’s return to office, his administration’s aggressive push to unravel federal support for renewable energy has led to nearly $35 billion worth of cancelled or downsized projects, affecting tens of thousands of current and planned jobs across the country. Another estimate puts the impact at 266 gigawatts of lost generation capacity, hitting solar particularly hard: 86 GW of utility-scale projects canceled, compared with 54 GW of wind.
New permitting restrictions, accelerated sunsetting of Biden-era clean energy investment and production tax credits, and pushback from rural communities suggest attrition will continue absent favorable court decisions (as with a recent string of offshore-wind legal victories) or a meaningful policy shift — possibly via bipartisan, energy-agnostic House legislationthat would protect fully permitted projects from abrupt cancellations and expedite, and de-risk, new ones.
Still, there may be an opportunity for the right kind of renewable project, one that uses domestically manufactured inputs and steers clear of any association with China. New public opinion data from the Trump campaign’s chief pollster suggests the president’s base, including working-class voters whose jobs are affected by the administration’s anti-clean-energy push, is more pro-solar than the White House’s posture implies. A slight majority, 51%, of Trump coalition voters favor utility-scale solar; 70% support it if panels are made in the U.S., from American materials, with no ties to China. Moreover, 68% agree the country needs all kinds of electricity generation to bring down energy costs, an issue where Democrats currently have an advantage.
That creates a narrow but real political lane: renewables framed as American-made and China-free, explicitly tied to jobs and lower power prices. Fittingly, Tesla is moving ahead with its plan to become the biggest U.S. manufacturer of solar components by 2029. Elon Musk, a vocal supporter of both solar and wind, is positioning himself as a leading Republican donor for the November midterms, making it more likely his views on renewables carry weight with the Trump administration.
The past two weeks — and President Donald Trump’s first year back in office more broadly — have been a prime example of policymaking at the speed of social media, namely the @realDonaldTrump account on Truth Social. Trump’s 180-degree reversal on a push to acquire Greenland has dealt a blow to the transatlantic alliance, nudging some NATO member states toward closer trade ties with China and hurting MAGA’s credibility among the European far right.
At home, though, voters have been largely unimpressed with the president’s pursuit of American greatness abroad: Trump’s net job approval stands at -12 percentage points (43% approve vs. 55% disapprove), near an all-time low, according to an average of latest polls. His net approval on foreign policy is also -12 points, with just 6% of voters viewing developments abroad as the country’s most important issue. Outside his loyal MAGA base, Americans are skeptical about Trump’s exploits on the global stage: 49% say his policies have weakened the U.S.’s position in the world and 54% expect his actions to have a negative impact on global peace and stability in 2026.
Trump has recently rolled out a series of populist economic policies aimed at lowering prices, some of them borrowed from a Democratic playbook. Still, he remains 30 points underwater on the cost of living: 51% of voters say his policies are making things less affordable, and 74%, including 49% of Republicans, say he is not doing enough to address the issue. More broadly, 57% say Trump is focused on the wrong things, including 62% of independent voters who tend to decide elections.
That same disconnect is evident on immigration, where Trump’s net approval is -18, including -27 among independents. Even though half of voters approve of his handling of the U.S.-Mexico border and support his immigration policy goals, 63% oppose his hardline tactics, and 61% say aggressive enforcement actions — which have left two people dead and sparked nationwide protests — are a bridge too far. Black and Latino voters are disproportionately likely to disapprove of Trump on immigration; those groups shifted right in 2024, and both parties are vying for their votes in this year’s midterms.
Despite broad disenchantment with Trump on the economy and immigration, voters still prefer the Republican approach on both issues over a Democratic one (33% to 25% on the economy, 39% to 29% on immigration). Yet they are 5 points more likely to back a generic Democrat to represent them in Congress, including a 15-point edge among independents. That gives Democrats breathing room to coalesce around a set of positive messages beyond affordability — especially on immigration, where a Republican outcry in Congress and backlash from within the MAGA media ecosystem is pushing the administration to lower the pressure. Trump allies are urging the president to settle on a message of his own as he embarks on a schedule of regular campaign travel, but whether he is able to stay on message is anyone’s guess.
Between pressuring NATO allies over Greenland, keeping military options against Iran in play, and hinting at a push for regime change in Cuba, President Trump has been taking a noticeably softer tone toward China. His administration’s new national defense strategy downgrades China to a regional priority level secondary to the Western Hemisphere, seeking to maintain a “favorable balance of military power in the Indo-Pacific” to prevent Chinese dominance in the region.
The Trump-Xi trade truce, reached last fall, remains broadly in place, and 2026 has not brought a major new round of tariff escalation, although narrower, previously scheduled measures can still take effect. Against that calmer backdrop, the administration has approved sales of Nvidia’s H200 AI chips to China and greenlit a TikTok restructuring into a majority U.S.-owned entity — moves that have drawn sharp criticism from Republicans in Congress. It has also withdrawn a proposed rule to restrict Chinese drones, dropped an expected rule on Chinese medium- and heavy-duty trucks, and pushed out the official who led the office that had effectively blocked most China-linked connected cars from the U.S. market on national security grounds in 2024.
Barring unforeseen developments, some China watchers expect a relatively quiet year, with both sides avoiding significant moves until after the November midterms — which take place just days after the current trade truce is set to expire, meaning that its key elements, such as suspended restrictions on China’s rare earths exports, will likely be extended in some form beforehand. The administration will likely want a longer runway for its own push to build out domestic and allied critical minerals supply chains, which includes a $1.6 billion investment in an American rare-earths miner. (A February ministerial meeting on critical minerals could offer early signs of whether the administration can translate its rhetoric into practical coordination with allies and partners.)
Ahead of Trump’s planned visit to Beijing in April, a key uncertainty is the Supreme Court’s pending decision on challenges to the administration’s use of “emergency” tariff powers for “reciprocal” and fentanyl-related duties. If the court limits that tool, the administration’s next move, and Beijing’s response, will be a key test of whether the current calm holds.
Canada’s decision to reduce tariffs on some Chinese EVs from 100% to the country’s most-favored-nation rate of 6.1%, part of a new strategic partnership that also anticipates Chinese investment in Canadian auto production, illustrates how the Trump administration’s trade rhetoric and policies have disrupted auto industries across North America. The initial imports are set to be small, but the move would give Chinese manufacturers (in addition to Tesla, a likely early winner) a foothold in the North American market while potentially further eroding the competitiveness of U.S. automakers such as GM and Ford outside U.S. borders.
Once allowed in, affordable and innovative Chinese cars tend to gain traction: their market share in Mexico grew to nearly 20% in five years before the government raised tariffs on made-in-China cars to 50%, unless manufacturers also produce locally — a provision from which some U.S. automakers will also benefit. It may be a matter of time before Chinese-brand vehicles enter the U.S. through the northern or southern border, although officially importing them would remain difficult, not only because of a 100% tariff but also due to federal rules governing connected car technology and vehicle safety standards.
Speaking at a recent event in Detroit, President Trump again invited Chinese automakers to set up manufacturing in the U.S., and some, like Geely, have signaled interest. But the idea typically faces opposition from organized labor and lawmakers in both parties, which could make it a nonstarter in an election year.
Trump administration officials have criticized Canada’s move to open its market to Chinese vehicles, with Commerce Secretary Howard Lutnick hinting it could factor into the upcoming USMCA review this summer. As that review approaches, Canada’s tariff shift may become an early test of whether the region can reconcile competitiveness and investment priorities with a tougher posture on China-linked trade in its shared auto market.
As President Donald Trump’s Venezuela strategy takes shape, we are watching how his administration’s embrace of foreign interventionism affects his hold on his MAGA voter base — and, in turn, Republican prospects of maintaining control of Congress beyond the November midterm elections.
Leading MAGA voices are positioning the administration’s actions in Venezuela as a manifestation of the “Donroe Doctrine,” a modern iteration of the 19th-century Monroe Doctrine that cast the Western Hemisphere as a U.S. sphere of influence. So far, polling suggests this rhetoric is resonating with Republican voters despite its sharp divergence from Trump’s oft-voiced rejection of America’s overseas military entanglements and past efforts at nation building and regime change.
Republicans overwhelmingly support the way Trump is handling the situation in Venezuela (87%, compared with 37% approval among independents and 43% among voters overall) and believe his actions will reduce the inflow of drugs and make the U.S. stronger, including economically. A majority of Trump supporters favor stationing U.S. troops in Venezuela (60%) and taking control of its oil fields (59%). At the same time, 54% worry about getting too involved and are concerned that such involvement could prove costly — indicating a disconnect with Trump’s stated wish to “run” the country for an unspecified period of time. A quarter of Republicans are adopting a wait-and-see approach, saying it is too soon to tell whether Trump’s military action in Venezuela has been a success, a view shared by 47% of voters overall.
The administration has yet to articulate what running Venezuela would mean in practice, just as it has yet to get U.S. oil majors onboard with its plans to revitalize the country’s dated oil infrastructure. Gaining control of Venezuela’s oil reserves has emerged as the top White House priority, overshadowing border security and drug cartel-related arguments while promising to keep gasoline prices in check, a boost to Republicans’ affordability messaging ahead of the midterms.
However, political risks abound: Serious setbacks in Venezuela or large-scale military interventions elsewhere (the clock is ticking on Iran) could overpower Republican campaign focus on kitchen-table issues, which consistently rank far higher in the public mind than any action abroad, and weaken Trump’s hold on a party preoccupied with keeping control of Congress. Conversely, a success in Venezuela could endanger Democrats’ efforts to hold several vulnerable House seats in Florida, which are home to Venezuelan communities supportive of Trump’s actions.
Looking further ahead, the way things play out could make or break the 2028 Republican presidential candidacy of Secretary of State Marco Rubio, the public face of Trump’s Venezuela strategy. Ultimately, time will tell whether events in Venezuela come to define Trump’s second term, much as the withdrawal from Afghanistan came to shape the Biden presidency and the war in Iraq defined President George W. Bush’s tenure in office.
In the past week alone, Venezuela has become a measure of how far President Trump can push an assertive foreign policy stance without losing his political footing at home. Now, Greenland is emerging as a second, very different test in which pressure on an autocratic adversary is replaced by pressure on America’s traditional allies.
Trump has argued that the U.S. needs to “own” Greenland to protect its national security from encroachments by China and Russia, and suggested he would act one way or another, including militarily. That mix of maximalist language and ambiguity has played well with MAGA audiences but drawn unusually direct rebuke from senior Republicans in Congress, who warned that threats toward allies are counterproductive and could seriously damage U.S. strategic interests in Europe.
Polls show Americans overwhelmingly opposed to taking Greenland by force, with 73% against, including 60% of Republicans, roughly unchanged since August 2025. Voters are relatively unenthusiastic about a purchase, with 45% against, although the share of Republicans favoring this option is up 7 points since August, at 51%, indicating that Trump’s national security rhetoric is resonating with this group.
From an international standpoint, however, any U.S. efforts to take over Greenland present a higher risk than the Trump administration’s actions in Venezuela, endangering the alliance system the U.S. depends on to manage Russia and secure a workable Ukraine settlement.
European governments have warned that an American military move to capture Greenland would be a breaking point for NATO, an indication that the dispute is already being read as a referendum on U.S. reliability toward allies. For key NATO allies like Germany, the concern is less about Greenland itself than about normalizing U.S. pressure against a historic ally at a time when Ukraine diplomacy depends on tight transatlantic coordination.
A high-level meeting between U.S., Danish, and Greenlandic officials has failed to lower the pressure in a way that accommodates both Trump’s stated security concerns and Greenland’s right to self-determination. An unresolved situation over Greenland could become a midterm complication for Republicans, energizing parts of the MAGA base while giving Democrats an argument that Trump is picking fights with allies that are taking resources away from domestic priorities, like the cost of living, that directly impact voters’ lives.
Since taking office, the second Trump administration has made notable moves to ease commercial deployment of self-driving vehicles by promoting a more permissive federal posture, framed as a way to bolster U.S. competitiveness against Chinese rivals. An AV policy framework, released last April, exempted some vehicles from complying with federal safety standards and revised crash reporting requirements, followed by additional efforts to modernize safety standards written with human-driven vehicles in mind.
In the meantime, states have been moving in different directions, with California regulators proposing new hurdles on certain driverless testing permits while Texas enacted a statewide framework designed to enable AV operations and constrain conflicting local rules. The result is a de facto patchwork that mirrors what’s emerging in AI, energy, and other policy areas — reinforcing the administration’s argument for a unified national approach to preempt state-by-state divergence.
That push for a single standard aligns with, and may have helped accelerate, renewed bipartisan action in Congress, most notably the House’s bipartisan SELF DRIVE Act, which would require an AV “safety case,” establish a national crash data repository, and draw sharper lines on federal versus state roles. Debate around the proposal suggests broad agreement that a federal AV framework is needed, while exposing persistent disagreements over how far federal law should preempt states, how strict disclosure and reporting obligations should be, and how quickly companies should be allowed to scale toward commercialization before guardrails are fully in place.
The outlook remains uncertain, in part because there is not yet a direct Senate companion to the House framework. Instead, current Senate efforts are split between Republican proposals aimed at speeding up deployment by clearing federal regulatory barriers and Democratic proposals aimed at tightening safety accountability for driving automation. We will be watching this space and flagging any significant regulatory or legislative developments as they occur.
This week, attention in Washington is focused on two major national security documents: the Trump administration’s National Security Strategy (NSS) and the annual defense spending bill, known as the National Defense Authorization Act (NDAA), which passed the House and is headed for a Senate vote. The former is a high-level policy document that lays out the administration’s perspectives on U.S. national interests, threats, and priorities, setting the tone for the rest of the presidential term on great power competition, economic security, terrorism, migration, relations with allies and partners, and nonmilitary tools like sanctions and diplomacy. The latter translates those guidelines into legally binding terms to authorize and shape defense programs and set policy directives on issues like Ukraine military aid or China AI policy. The two documents can align or clash, depending on how much Congress agrees with the president’s strategy.
The current iterations of the two documents, one strategic and the other practical, differ on several important points, with their contrasting approaches to Europe being the most dramatic. The NSS portrays the region (particularly Western Europe) as facing economic decline and “civilization erasure,” and pledges to “help Europe correct its current trajectory.” It introduces a stronger expectation of NATO burden-sharing and calls for an end to NATO expansion. The document avoids direct criticism of Russia and casts the U.S. as an arbiter rather than an equal participant in allied efforts to end the war in Ukraine. By contrast, the $900 billion NDAA package includes several provisions that clearly position Russia as a threat and boost European security, such as demanding congressional approval for any further big U.S. troop reductions in Europe, providing $400 million for Ukrainian arms purchases, and allocating $175 million in security assistance to frontline NATO members Latvia, Lithuania, and Estonia.
Their approaches to China also differ. The NSS largely plays down ideological differences, emphasizing economic engagement and indirectly alluding to China’s unfair trade practices, supply chain threats, and encroachments into the Western Hemisphere, an area of singular importance to the administration. The NDAA takes a more traditional direction, setting new restrictions on U.S. investments in China’s advanced technology and authorizing security funding for Taiwan and the Philippines. It omits provisions that would have codified existing restrictions on chip sales to China and other adversarial nations and created rules governing the global spread of frontier-level AI, but lawmakers in both parties are already working on legislation to address those issues in 2026.
Considering the differences between the two documents, especially on Europe, it remains to be seen how the push from Congress to keep strong support for NATO, Ukraine, and close ties with European allies will balance a Trump White House that often uses those same issues to score political points at home. The future of the U.S.-Europe relationship will likely depend on whether lawmakers from both parties, career officials, and European governments can sustain day-to-day cooperation on security and economic issues despite sharper rhetoric and more confrontational moves from the administration.
AI governance, one of the few remaining bipartisan issues in Congress, is emerging as a major campaign theme ahead of next year’s midterm elections. Since returning to office, President Donald Trump has championed a lightly regulated, nationally uniform AI framework, using executive actions to promote innovation while discouraging states from adopting their own, often stricter, rules.
Congressional Republicans twice tried, unsuccessfully, to fold a temporary ban on new state AI laws into larger bills, exposing deep intra-party divisions over federalism and tech oversight. Democrats have generally advocated for stricter guardrails, but many of the most prominent proposals have been bipartisan, including measures to curb the use of AI in elections, protect consumer safety and data privacy, shield creative work from AI cloning, and secure the AI chip supply chain against China.
In the absence of comprehensive federal rules, states have increasingly acted as testing grounds for AI governance — much as they have in areas like food and environmental policy — producing consequential measures in Colorado, Tennessee, California, New York, and elsewhere. But a new Trump executive order, heavily lobbied for by tech companies, threatens to block future state-level AI rules, intensifying concerns about a lack of accountability for Big Tech and, more broadly, about the industry’s influence over the direction of America’s AI policy.
In the meantime, politicians, from conservative populists to establishment Democrats, are already integrating AI into campaign messaging, explicitly tying the technology, via data centers, to high energy costs, environmental strain, and job risks. Influential MAGA voices warn that AI threatens the working-class voters who brought Trump to power, while the tech elite benefits. Voters overwhelmingly voice concerns about AI-related job losses, environmental impact, and high energy demands (71%, 71%, and 61%, respectively), with Democrats more likely than Republicans or independents to be highly concerned. A plurality of Americans have little or no trust in the government’s ability to effectively regulate AI, and a full 77% believe the technology could be used to stir up political chaos. (As a case in points, research shows that AI chatbots can shift voters’ views by a substantial margin, far more than traditional political ads tend to do.) As midterm campaigning gets underway, we will be watching Big Tech super PACs, which are laying out plans to boost pro-AI candidates in an alignment with David Sacks, Trump’s top adviser on AI and crypto — turning AI policy itself into an early test of who will set the terms of the emerging AI-driven economy.
President Trump remains conflicted about adopting “affordability” as his party’s main message heading into the midterms. His administration, however, is embracing the theme by reframing recent moves to roll back climate regulations as a strategy to lower the price of consumer goods — namely, autos. The administration argues that relaxing Biden-era fuel economy standards to 34.5 miles per gallon by 2031, rather than 50.4 mpg, would save Americans $109 billion over five years and shave $1,000 off the average cost of a new car. Earlier this year, a provision in Trump’s Working Families Act eliminated penalties for manufacturers that violate Corporate Average Fuel Economy (CAFE) standards, encouraging production of more profitable but less fuel-efficient vehicles like SUVs and pickup trucks. Another provision lets buyers deduct up to $10,000 a year of interest on loans for U.S.-built vehicles through 2028, effectively lowering financing costs. In Congress, Republican lawmakers are questioning the need for safety features such as automatic emergency braking systems, arguing they are ineffective and drive up vehicle costs.
Recent data point to a challenging environment for U.S. auto buyers, driven by a combination of surging sticker prices, higher interest rates, stretched household budgets, and the end of subsidies like Biden-era EV tax breaks. Experts warn that any upfront savings could prove short-lived as drivers spend more on gasoline and become more vulnerable to price swings at the pump. They also caution that the new Trump regulations are all but certain to face legal challenges and could be overturned by a future Democratic administration, heightening compliance uncertainty for vehicles hitting the market after 2028. Time will tell whether the rule change further slows the industry’s investments in EVs, but analysts still expect EV adoption to continue to grow, albeit at a slower pace. Reasons for optimism include new models becoming more affordable, the price gap between used EVs and gas-powered cars falling to around $900, an all-time low, and EV charging networks expanding across the nation.
