The upending of government by Donald Trump and Elon Musk is relentless. Every day seems to bring fresh horrors. Tariffs of 25% tariffs on Canadian and Mexican goods (both now temporarily paused) and Mexican goods, and 10% on Chinese goods imported into the United States have been announced in the past few days. What that means for global financial markets no one knows, but unless matters are resolved it’s going to be one hell of a trade war with, ironically, low-income MAGA voters hit the hardest.
Trump is now parking his trade tanks firmly on European lawns saying on Sunday night that new tariffs on the EU would “definitely happen” and that tariffs for the UK “might happen”.
As Anthony Scaramucci tweeted on Monday, “And on the 13th day he crashed the global markets”. We may need more than popcorn at this point.
Not only will it be trade wars; it could be out and out wars. Not content with wanting Greenland, or Canada, to become the 51st state, yesterday Trump made further threats to take back control of the Panama Canal. “Or something very powerful is going to happen,” Trump allegedly told reporters. Although, let’s face it, something already has.
Gutting key elements of governance
Meanwhile the onslaught on the administration and the administrators of America continues. Musk has talked frequently about downsizing the federal government according to CNN. And, true to his word, last week there was what can only be described as a hostile takeover of the Office of Personnel Management (OPM) – the very backbone of American government – with Amanda Scales, who worked for Musk’s artificial intelligence company xAI, imposed as chief of staff.
Not only is this chaos no way to run a country, it will also upend the president. Why? His executive orders are not based on any good reason other than vindictiveness or vanity. The last thing that is, is good governance.
Blaming tragedy on his opponents’ policies
After last Wednesday’s horrific air crash near the Reagan National Airport in Washington DC, the president implied that the previous administration’s diversity policies were to blame. Listen to him at this press conference, where a reporter asked “Are you saying this crash was somehow caused by and the result of diversity hiring and what evidence do you have of this?” “It just could have been”, replies Trump, adding that only “superior” minds should pilot planes and helicopters.
The last fatal airline crash in the US was 15 years ago – since then commercial air travel has only become safer.
A far more likely cause of the accident is the reorganisation of key roles. It was only 12 days ago that it was reported Trump had fired the heads of the Transportation Security Administration and Coast Guard, along with all the members of a key aviation security advisory group. And it is now widely acknowledged that there was just one air traffic controller in the Reagan National Airport tower at the time of the collision, where there would normally be two controllers on duty.
Tough act on immigration stance may backfire on Trump
But Trump’s biggest priority will be immigration and illegal border crossers, suspending refugee resettlement and securing the borders. He has no other choice as this is what he built MAGA around and this is what his most fervent supporters expect to see.
But this too could unravel.
Over eight million undocumented immigrants provide important labour within the US economy, in many key areas such as agriculture, construction and services. According to the US Bureau of Labor Statistics in 2023, foreign-born workers, including the undocumented, accounted for 18.6%, or 29.1 million, of the US labour force. The Centre for Migration Studies estimates that as many as 8.3 million undocumented immigrants work in the US economy, coming from Mexico (30%), Central and South America (20%), and Central and Eastern Asia (15%).
And get this. The same report quotes “Undocumented immigrants, using Individual Tax Identification Numbers, paid US$59.4 billion in federal and US$13.6 billion in state and local taxes in 2022. Undocumented immigrants also paid $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance in 2022, programs for which they are ineligible”.
But the economy is dependent on immigration
The American economy relies on these immigrants. The jobs they do have not shrunk in number since the pandemic, and the people that do these jobs consume goods and services which, in turn, bolsters GDP growth. Immigration then is a necessary part of the economic growth for the USA going forward.
If Trump is successful in returning all undocumented migrants there will be consequences. According to the Federal Reserve Bank of Dallas: “If immigration normalizes it will return to rates that are insufficient to sustain the type of economic growth the USA is accustomed to … The retirement of the baby boomers and overall aging of the workforce, as well as low and falling birth rates mean population growth will become entirely dependent on immigration by 2040, as deaths of US-born will outpace births.”
But President Trump is tone deaf to all of this. Undeterred, the immigration arrests continue with NBC reckoning there are about 791 a day. Trump wants to ramp this up even more. According to the Washington Post: “US Immigration and Customs Enforcement officials have been directed by Trump officials to aggressively ramp up the number of people they arrest, from a few hundred per day, to at least 1,200 to 1,500.” Officers are under pressure to meet targets and this leads them to go for the easy targets, including those immigrants who have not committed crimes.
But indiscriminate round ups come at a cost. They spread fear and panic and will cause a backlash. People will just leave. And leaving they are.
Massive losses of agricultural labour
For Arkansas, where the US$16bn agricultural sector is the state’s largest industry, this stuff matters. At the American Farm Bureau Federation convention in San Antonio last weekend, Zippy Duvall (Farm Bureau president) summed up the mood regarding mass deportations and agricultural labour.
“Everyone’s nervous”, Duvall told Texas Public Radio (TPR). “I think what makes us most nervous is we don’t know what steps the full deportation plan has in it.” TPR also reported that “Brent Hollard, a northern Illinois farmer at the convention, said a reduction in farm labour through mass deportation is going to hurt farmers”. And that in turn will hurt consumers.
Who knows where all this is going. Trump for sure doesn’t know. And he cares even less. Trump is back and this time he is angrier and more vengeful. He is also madder, badder and being played by Musk. It’s a heady and very dangerous mix. But for all we worry this side of the pond, spare a thought for Americans. Some of them still haven’t a clue about the tsunami that is about to hit them.
As Dorothy Parker may have said: “What fresh hell is this?”
