Week 12 of Trump 2.0: Tariff Escalation, Budget Resolution, and Supreme Court Decisions
Tariff Turmoil Sends Markets Reeling
President Trump kicked off the week with sweeping new tariffs that rocked the global economy. A baseline 10% tariff on nearly all imports was implemented, alongside country-specific tariffs as high as 145% on Chinese goods. The White House framed these as “reciprocal tariffs” aimed at correcting long-standing imbalances, but investors and consumers were rattled. Markets tumbled, inflation fears grew, and major firms like Delta and Jaguar Land Rover criticized the moves as misguided. The Dow plunged over 2,000 points in a single day, and economists warned of a looming recession.
Tech firms caught a rare break. A late-Friday notice from U.S. Customs and Border Protection confirmed that electronics — including smartphones, semiconductors, and computer parts — would be exempt. Analysts hailed the news as a “bullish win” for Apple, Nvidia, and Microsoft, many of whom rely on Chinese manufacturing. The exemption helped stabilize tech stocks, but did little to reassure industries still facing steep new import costs.
By midweek, Trump abruptly paused most new tariffs for 90 days, citing outreach from more than 75 countries looking to negotiate. Markets briefly surged on the news — the Nasdaq jumped 12%, its biggest one-day rally in years — but gains faded as uncertainty returned. Trump defended the pivot as strategic flexibility, not backtracking, but it came after repeated claims earlier in the week that the tariffs were non-negotiable.
Even with the pause, the tariff war with China is far from over. Tariffs on Chinese imports remain at 125–145%, and Beijing hit back with retaliatory tariffs of up to 84%. China also moved to restrict U.S. cultural imports, like Hollywood films, and criticized comments by Vice President Vance, calling them “ignorant and impolite.” The White House, meanwhile, announced that nearly 70 countries are in talks for “tailor-made” trade deals. Skeptics noted that many of these countries had not retaliated — not because of Trump’s strategy, but because they couldn’t afford to.
Legal Leverage from the Supreme Court
While the tariff chaos dominated headlines, Trump quietly scored several key legal victories. The Supreme Court handed the administration temporary authority to deport migrants using the Alien Enemies Act and fire more than 16,000 probationary federal workers. The Court also allowed the administration to freeze $65 million in diversity and education-related grants to public and private universities — a blow to programs at Brown, Harvard, and Princeton, among others.
The rulings were narrow in scope but signal a pattern: the Court is giving Trump room to test executive power. Legal scholars noted that while the justices avoided making sweeping constitutional judgments, they seem increasingly deferential to Trump’s emergency appeals. The administration celebrated the decisions as wins for executive authority, but civil rights groups warned they set dangerous precedents.
One ruling ordered the administration to "facilitate" the return of a man wrongly deported to El Salvador — but did not set a deadline or enforce the decision, underscoring the Court's reluctance to fully check Trump’s power. Meanwhile, federal courts in New York and Texas issued temporary blocks on certain deportations, and legal battles over the Alien Enemies Act are expected to continue.
Congress Inches Forward on Trump’s Agenda
In a narrowly passed vote, the House approved a budget framework that opens the door for Trump’s legislative agenda. By matching a previously passed Senate version, the bill unlocks the reconciliation process, which allows Republicans to push through major legislation with just 51 votes in the Senate. Trump is pushing for a package that includes sweeping tax cuts, infrastructure spending, and immigration policy changes.
The win wasn't easy. Fiscal conservatives in the House threatened to tank the bill over disagreements about spending levels. The Senate’s version included only $4 billion in cuts — symbolic in the context of federal spending — while House Republicans demanded up to $1.5 trillion in reductions. Speaker Mike Johnson delayed a vote earlier in the week to avoid a public defeat, but ultimately delivered a narrow 216–214 win.
Even with reconciliation unlocked, internal GOP divisions mean that passing the actual policy will be harder than passing the framework. Still, Trump and Johnson hailed the vote as a step toward a legislative legacy that has so far been defined more by executive action than by major new laws.
Retribution in the Spotlight
Trump’s longtime rhetoric of “retribution” is no longer just campaign trail talk — it’s now official policy. This week, the president signed multiple executive orders aimed at punishing individuals and institutions that challenged or criticized him during his first term.
Chris Krebs, the former head of the Cybersecurity and Infrastructure Security Agency (CISA), was stripped of his security clearance and publicly labeled a “bad-faith actor.” Krebs had defended the integrity of the 2020 election and disavowed disinformation. A new executive order claims he “falsely and baselessly denied” that the election was stolen — despite no evidence of widespread fraud.
Also targeted was Miles Taylor, the former DHS official who wrote an anonymous op-ed in The New York Times criticizing Trump in 2018. Taylor’s clearances were revoked, and the order accused him of “weaponizing his position.”
Trump didn’t stop with individuals. He also ordered a review of the law firm that represented Dominion Voting Systems in its defamation suit against Fox News — part of a broader push to discredit legal institutions involved in post-election litigation.
Cultural and historical institutions came under fire, too. The National Park Service briefly removed references to Harriet Tubman and the Underground Railroad from its website, only to quietly restore them after public outcry. The White House denied involvement, but the episode added to concerns about historical erasure and political pressure on public agencies.
The Road Ahead
Trump insists his aggressive trade policies will bring back U.S. manufacturing and reduce reliance on countries like China. The administration touts plans for onshoring — claiming companies like Apple, Nvidia, and Taiwan Semiconductor are investing trillions in U.S. production. But economists warn that not all products can be easily manufactured in America, and that tariffs could raise prices for consumers and disrupt critical industries.
The public remains deeply skeptical. A Quinnipiac poll found that 72% of Americans think tariffs will hurt the economy in the short term, and just 39% approve of Trump’s handling of trade. Long-term optimism is higher among Republicans, with nearly 9 in 10 believing tariffs will help.
Meanwhile, Trump faces growing resistance from Congress, foreign governments, and even some corners of Wall Street. JPMorgan CEO Jamie Dimon warned that tariffs are raising inflation risks and increasing recession odds. Goldman Sachs briefly upped the probability of a recession to 45%, though it later walked that back after Trump’s 90-day tariff pause.
Despite this, Trump shows no signs of slowing down. He continues to wield executive power aggressively, test legal limits, and dismiss dissenting voices. His message to allies and adversaries alike is simple: don’t get “yippy.”
As markets brace for more turbulence and negotiations begin in earnest, one thing is clear — unpredictability remains the defining feature of Trump’s second term.