Trump 2.0: Less Foreign Aid, More Tariffs

Summary

Podcast Summary: The Journal – "Trump 2.0: Less Foreign Aid, More Tariffs"

Podcast Information:

• Title: The Journal
• Hosts: Kate Linebaugh, Ryan Knutson, with Jessica Mendoza
• Description: The most important stories about money, business, and power. A co-production of Spotify and The Wall Street Journal.
• Episode: Trump 2.0: Less Foreign Aid, More Tariffs
• Release Date: February 7, 2025

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Introduction

In the February 7, 2025 episode of The Journal, hosts Ryan Knutson and Molly Ball delve into the rapid and tumultuous developments within the Trump administration during its third week in office. The episode, titled "Trump 2.0: Less Foreign Aid, More Tariffs," examines the administration's aggressive dismantling of foreign aid agencies, imposition of tariffs, and controversial foreign policy statements, all while exploring the broader implications for U.S. governance and international relations.

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Dismantling of USAID

Key Discussion: The episode opens with a focus on the abrupt shutdown of the United States Agency for International Development (USAID), a $40 billion agency employing roughly 10,000 individuals. USAID's dissolution represents a substantial shift in U.S. foreign aid policy and soft power projection.

Notable Quotes:

• Ryan Knutson [02:34]: "Let's start out today by talking about the dismantling of the U.S. agency for International Development, or USAID."
• Malik [03:11]: "USAID is intended to project American soft power... They really believe that... it's a bit of a zero-sum game."

Insights:

• Soft Power Reduction: USAID not only provides aid but also promotes democracy, free trade, and access to markets—functions viewed unfavorably by the Trump administration, which perceives international relations as zero-sum.
• Potential Repercussions: The sudden halt in USAID funding threatens numerous non-governmental organizations (NGOs) worldwide, potentially shuttering operations and impacting aid recipients.
• Legislative Hurdles: Molly Ball highlights the complexity of dissolving a Congress-established agency, noting that permanent elimination would likely require new legislation, despite the administration's attempts to act unilaterally.

Conclusion: While the immediate impact is severe, the long-term fate of USAID remains uncertain due to existing statutes and potential legislative pushback. Nonetheless, the rapid dismantling sets a precedent for other agencies.

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Restructuring the CIA

Key Discussion: The conversation shifts to the Central Intelligence Agency (CIA), where the Trump administration is implementing significant changes under the new director, John Ratcliffe.

Notable Quotes:

• Malik [10:22]: "The new CIA director wants to see a much harder edge... more aggressive spying."
• Malik [12:27]: "They're looking at a much more bare knuckle world... where you need to use much more bare knuckle tactics."

Insights:

• Shift to Aggressive Tactics: The Trump-appointed CIA director aims to adopt more assertive and covert operations, particularly against adversaries like China.
• Management Overhaul: Offering buyouts to existing CIA employees signals a move towards restructuring the agency’s culture and operational focus.
• Strategic Contrast: This approach contrasts sharply with the dismantling of USAID, indicating a strategic pivot from soft power to hard power within the administration's foreign policy toolkit.

Conclusion: The CIA's transformation under the Trump administration exemplifies a broader strategy of leveraging intelligence and military might over diplomatic and developmental aid.

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Tariffs and Trade Wars

Key Discussion: A significant portion of the episode examines the Trump administration's tariff strategies, including the imposition of 25% tariffs on Canadian and Mexican goods and 10% on Chinese imports.

Notable Quotes:

• Molly Ball [14:26]: "Trump doesn't really want to put on the tariffs, he just wants to use it as a negotiating tactic."
• Molly Ball [16:13]: "We could be headed for a trade war... Chinese retaliatory measures are already underway."

Insights:

• Negotiation Tactic: The tariffs on Canada and Mexico appear to be leverage tools rather than permanent measures, aimed at extracting concessions on issues like border security.
• China Trade Tensions: The 10% tariff on Chinese goods is firm, with actual implementation, leading to retaliatory measures from China and the potential escalation into a full-blown trade war.
• Economic Uncertainty: These tariff policies introduce significant uncertainty into the global business climate, affecting long-term planning and economic stability.

Conclusion: While tariffs are a cornerstone of Trump’s economic strategy, their inconsistent application—soft on North American allies and firm on China—creates a precarious and unpredictable trade environment.

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US Takeover of Gaza

Key Discussion: The episode covers President Trump's controversial proposal for the United States to take over the Gaza Strip, including dismantling unexploded ordnance and resettling Palestinians.

Notable Quotes:

• Ryan Knutson [17:27]: "Trump said that he wanted the US to take over Gaza and resettle Palestinians in other countries."
• Molly Ball [17:48]: "It's already been pretty well walked back... He's clarifying he would not propose to put U.S. troops on the ground."

Insights:

• Initial Proposal: Trump's statement represents a drastic shift from traditional U.S. foreign policy, suggesting direct military and administrative control over Gaza.
• Administrative Clarifications: Subsequent clarifications indicate that the proposal may be more about reframing the dialogue rather than a concrete policy plan.
• Political Reception: The idea has not been well-received, even among Trump’s base, indicating internal dissent and lack of support for militaristic solutions in foreign policy.

Conclusion: Trump's Gaza proposal appears to be more of a rhetorical strategy to provoke dialogue and re-evaluate U.S. foreign policy frameworks rather than an actionable plan with immediate backing.

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Democratic Response

Key Discussion: The episode assesses the Democratic Party's reaction to the Trump administration's rapid and aggressive policy implementations.

Notable Quotes:

• Molly Ball [19:28]: "Trump is moving so quickly that the normal rhythms of congressional action... are not really adequate to keep up with that."
• Molly Ball [20:54]: "All they can do is sort of yell a lot and maybe slow it down a little."

Insights:

• Power Dynamics: Democrats, currently in the minority both in Congress and lacking control of the White House, struggle to effectively counteract the administration's swift actions.
• Limited Tools: Their primary responses include public denouncements, procedural tactics like delaying nominations, and advocating for legislative obstacles.
• Constituent Pressure: While there is significant public outrage among affected constituents, especially concerning agency shutdowns like USAID, it has yet to translate into substantial legislative or executive pushback.

Conclusion: Democrats find themselves in a reactive position, unable to match the administration's pace, resulting in a diminished ability to influence policy outcomes or halt controversial initiatives.

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Conclusion

The February 7, 2025 episode of The Journal provides a comprehensive analysis of the Trump administration's initial policy maneuvers, highlighting a decisive shift towards reducing foreign aid and increasing tariffs as tools of governance and international influence. Through expert insights and detailed discussions, the episode underscores the potential long-term impacts on both domestic governance structures and international relations. Moreover, it paints a picture of a political landscape where the executive branch is asserting unprecedented control, while legislative and opposition forces struggle to adapt and respond effectively.

Final Thoughts:

• Future Episodes: As Molly Ball notes, the rapid pace of developments suggests that listeners can expect continued intense coverage in upcoming episodes.
• Call to Action: The hosts encourage listeners to engage by sending questions or sharing their experiences, emphasizing the interactive nature of The Journal.

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Notable Production Elements:

• Producer: Enrique Perez de la Rosa
• Editor: Katherine Whelan
• Engineer: Peter Leonard
• Fact-Checking: Kate Gallagher
• Music: So Wiley, Bobby Lord, Emma Munger, Griffin Tanner
• Artwork: James Walton

Listen to the Episode: For those interested in a deeper dive, The Journal is available on Spotify and other major podcast platforms.

Transcript

[Ryan Knudson]

Hey, Molly.

[Molly Ball]

Hey, Ryan.

[Ryan Knudson]

So it's the third week of Donald Trump's presidency and again, it has been another week of what feels like non stop news. We had tariffs, we had the dismantling of a $40 billion government agency, USAID, and we had Trump saying that the US should take over Gaza.

[Molly Ball]

Never a dull moment.

[Ryan Knudson]

So what is it like being a reporter right now in Washington?

[Molly Ball]

Well, it's very busy. A lot of people liken it to trying to drink from a fire hose. There's so much happening that it's difficult for any one person to keep track of it all.

[Ryan Knudson]

How long do you think the Trump administration can keep up this pace?

[Molly Ball]

There's a lot of speculation about that and we don't know. On the one hand, they clearly want to make an early splash that they can then either dial back or modulate in some ways. On the other hand, they do want to take this approach to vast swaths of the government. So it could continue in this way for quite some time. And as someone who covered the first Trump administration, that was pretty intense, pretty much throughout.

[Ryan Knudson]

All right, so there is once again a lot to talk about from the Journal. This is Trump 2.0. I'm Ryan Knudsen.

[Molly Ball]

And I'm Molly Ball.

[Ryan Knudson]

It's Friday, February 7th. Coming up, USAID, the CIA Tariffs Gaza. We're gonna try to turn that fire hose into a drinking fountain. Stay with us.

[Molly Ball]

Foreign.

[Joel Shechtman]

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[Ryan Knudson]

All right, so let's start out today by talking about the dismantling of the U.S. agency for International Development, or USAID. This was a $40 billion agency with about 10,000 employees that basically just shut down in a matter of days. And our colleague Joel Shechtman has been writing about it. So we brought Joel in to help us understand what's going on. Hi, Joel.

[Malik]

Hey, how's it going?

[Molly Ball]

Hey, Joel. Thanks for being here.

[Ryan Knudson]

All right, so Joel, let's start with the very basics. What is USAID and why has the Trump administration decided to tear it apart?

[Malik]

You know, usaid, its role is a little bit complicated. You know, people think of it, I think, primarily as far in terms of, like, aid that we're giving to other countries around the world. You know, there is a lot of that, like medical assistance or kind of training up doctors or helping with famines. And I think that that's a good part of what it does. But it's also an organization that is intended to project American soft power. Right. So a lot of what it does also is, you know, give out money to organizations that are involved in, like, promoting democracy, for example, in other countries, and also encouraging free trade and encouraging organizations that promote the idea of free trade and access to markets. I think that when you look at it in that way, it becomes a little bit clear why it's like so kind of like anathema to the, to the Trump people. Right? Because they really believe that, you know, power, be it soft power or hard power, that there's a bit of like a zero sum game to it where you use, like all the leverage and power that you have as a big country in a direct effort to make even allies succumb to your will.

[Ryan Knudson]

So at this point, most of the remaining employees at USAID are being put on administrative leave. As of the end of today, the headquarters has been shuttered, its website is down, its X account no longer exists. I mean, is this agency effectively toast?

[Malik]

So it's not entirely clear exactly how it's going to play out. Right. So they're talking about folding it into State Department, but it's also not clear to me whether in the longer term they're going to be able to, you know, this dismantling is going to be successful. Right. Because, like, there are statutes that enshrine usaid, enshrine the funding. It's an organization that has had, you know, bipartisan support for, you know, since it was created by jfk. And I think given that, it would probably require further legislation to actually make this shutdown permanent. It's not clear to me exactly how that's going to play out or whether what we're seeing now is permanent. It could be that, like with many things with Trump, this is kind of like a starting offer to get it to be something more like what, what they envision, whatever that might be.

[Ryan Knudson]

Yeah, I was going to ask you about this, Malik, because, like, can the Trump administration just do this? I mean, given that this is an agency that was created by con, doesn't Congress need to be the one that authorizes its demise?

[Molly Ball]

Well, that's the question a lot of people are asking. Yes. On paper, this is an independent agency that was created by Congress and therefore would require an act of Congress to eliminate. On the other hand, the attitude this administration has taken, as Joel has been describing, is sort of like try and stop us and who's going to stop us? So, yes, there have been lawsuits filed. We haven't heard much from the Republicans in Congress. Some of them have sort of tentatively suggested that maybe this is all going a little bit too far, too fast. But there hasn't been action taken by Congress, and these lawsuits could take a while to get through the courts. We're going to see the administration, I think, put forward some of its more aggressive legal theories about executive power. The big picture theory is this is the executive branch. The president's the head of the executive branch. It's ultimately up to the president to do what he wants to with the branch of government that he sort of embodies. And so it might still exist as a matter of statute, but it doesn't functionally exist.

[Ryan Knudson]

So do you think it's possible that this could be what we've seen with usaid, like a blueprint for how the Trump administration wants to approach the dismantling of other agencies that we know that they have set their sights on? Specifically, I'm thinking of the Department of Education, which the Wall Street Journal has reported the Trump administration is already discussing how to effectively, if not entirely get rid of, but severely shrink.

[Molly Ball]

Yep. And we're hearing about the potential for these kind of large scale firings at the epa, the Environmental Protection Agency as well. Other agencies are clearly in their sights. I think the other question that Joel sort of alluded to was, is there actually a constituency for these agencies, both among the public and among Congress, that would lead to the administration getting pressure to put the brakes on? Right. I mean, the government does stuff, right. It serves people all across the country. And we are already hearing from members of Congress that their phone lines are being flooded with constituents expressing some level of outrage, many of whom are directly affected by this. So that's another question is, is there going to be so much political blowback? But part of the reason that Elon Musk likes to go in, move fast and break things is that if you just do this so quickly that that reaction doesn't have time to percolate either the popular backlash or the response in the courts, that it's just effectively over before anyone can do any about it.

[Ryan Knudson]

So it sounds like this might not necessarily be the end of USAID and that there is a chance it could come back to life at some point. But in the meantime, this agency has effectively been eliminated. So I'm curious, what do you think is going to happen to the agency's workers and the people who are receiving aid from usaid?

[Malik]

I think, as Molly pointed out, once you do these things, once you break these things, no matter what happens after the fact, you create the facts on the ground. Because the thing is, it's not like these NGOs that are being supported around the world, like in East Africa or something, are overflowing with money to begin with. If you're able to cut off money to them for two or three months while this all gets fought out, most of those organizations are going to go out of business. And those people who work there, those aid workers, are going to have to find other things to do with themselves. Right. And so even if you come back and a few months later, there's some chance for them to kind of reapply in some new form to some new usaid. A lot of that ability even to do so, even to like write a proposal, you know, to have to have an office, to have staff that could carry out the projects, a lot of that's going to be gone. And I think that once you break it, you can glue the pieces back together, but I think a lot of it's probably going to go away.

[Ryan Knudson]

While you're here, Joel, I wanted to talk with you about the CIA, which is an agency you've covered closely over the years. There's a new Trump appointed director running the agency. And this week an email went out to employees there offering buyouts. Tell us about what the Trump administration is trying to do to the CIA right now.

[Malik]

I think the situation you have at CIA is very different from what we saw at USAID in terms of the intent here. Right. John Ratcliffe, the new CIA director, what he wants to see is a much harder edge CIA, a CIA that is able to push back on China in very aggressive ways, using covert action, kind of secret CIA missions to kind of influence events on the ground and just much more aggressive spying. And there's an opinion among Republicans and even some agency employees that during the Biden years and during Democratic administrations in general over the last generation, the agency had gotten a little too soft, a little too liberal minded, and that they really need to kind of go back to the real hard edge stuff that went on during the Cold War. The real cloak and Dagger spycraft, kind of clandestine missions where we undermine our enemies overseas. And so part of what they're trying to do in this buyout is kind of push out people and give people like a Runway out essentially who are endowed with this new kind of harder edge, more aggressive CIA. They're talking about using the CIA as a tool to maybe to spy on the government of Mexico, for example, in order to give Trump a more powerful negotiating hand when they're talking about tariffs. And I think you could kind of see what they want to do as CIA is being sort of like the other side of the coin of what they did with usaid. Right. They're looking at a much more bare knuckle world and much more zero sum games world where soft power maybe doesn't do the trick, where you need to use much more bare knuckle tactics and be much more aggressive even with countries that are close allies in order to get the things that you want.

[Ryan Knudson]

All right, well, thanks Joel, so much for your time to help and helping us understand all this stuff.

[Malik]

Yeah, great to great to be on the show. Thanks a lot.

[Molly Ball]

Thanks, Joel.

[Ryan Knudson]

All right, we're going to take a short break and when we come back, Molly and I are going to talk about tariffs, Gaza and the Democrats.

[Joel Shechtman]

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[Ryan Knudson]

So let's talk about tariffs. Trump announced late last week that he was going to impose a 25% tariff on Canada and Mexico and 10% tariffs on Chinese imports. That was supposed to go into effect on Tuesday, but then on Monday, Trump said he reached a deal with Canada and Mexico and that they would be delaying imposing those tariffs for 30 days. So, Molly, Trump obviously made tariffs a central piece of his campaign. What's your take on the way this played out?

[Molly Ball]

Well, it's interesting because we talked before about how there's this school of thought that says that Trump doesn't really want to put on the tariffs, he just wants to use it as a negotiating Tactic to get leverage for other parts of his agenda. Some economic, some not. That seems to have pretty much played out with these Canada and Mexico tariffs. Specifically, they were never imposed. The leaders of Canada and Mexico came, came rushing to the proverbial negotiating table to offer up various concessions, mostly related to border security. It's not clear how much they were even real concessions versus just announcements of things they were already doing. Right. Like troop deployments to the border that the Mexican and Canadian governments had already planned to do, spending for drug interdiction that they may have already been in the process of doing things like that. So the main thing that Trump got out of this may have been a sort of PR win, but it is a 30 day extension. It's not a permanent suspension of the tariff threat. So this cycle is going to repeat itself. We don't know how it's going to go in the next phase. And the tariff against China did go into effect. It's 10%. It's not as high as the other two countries, but that is going into effect and there is some possibility that that could escalate as well.

[Ryan Knudson]

Yeah, it seems like Trump was treating Canada and Mexico very differently than China. I mean, China, there's not. There doesn't seem to be the same degree of negotiations taking place right now. So where do you think the negotiations with China and the Chinese tariffs are headed?

[Molly Ball]

Well, we could be headed for a trade war. The Chinese government has announced retaliatory measures. They're adding more tariffs on American goods, investigations into American businesses. So this is gonna keep going back and forth in a tit for tat. And I don't think we know where it's headed. And we should say that that is another sort of consequence of these tariff wars is even if tariffs don't end up getting imposed or end up getting rolled back, it takes a toll on the business climate because of the certainty that businesses need in order to plan their operations. There's a lot of uncertainty in the forecast and we didn't settle the underlying question of does Trump want to do the tariffs and use that as a way of raising money for the federal budget, or is he more about threatening tariffs to get other things? The evidence so far is kind of mixed.

[Ryan Knudson]

So switching gears, at a press conference this week with Israeli Prime Minister Benjamin Netanyahu, Trump said that he wanted the US to take over Gaza and resettle Palestinians in other countries.

[Malik]

The US Will take over the Gaza Strip and we will do a job with it, too. We'll own it and be responsible for dismantling all of the dangerous unexploded bombs and other weapons on the site.

[Ryan Knudson]

This feels like a major departure from the way Trump has talked about foreign entanglements in the past. So how seriously do you think we should take this idea?

[Molly Ball]

It's already been pretty well walked back in the sense of the administration has already done a little bit of cleanup. And Trump himself has also posted on social media to clarify that he would not propose to put U.S. troops on the ground. And the administration says the U.S. would not be paying for this. So the idea seems to have been to just reframe the discussion, to throw in this massive curveball that wasn't really on anyone's radar, to sort of jolt everyone into waking up and looking at their actual options. Trump wants everyone to, including a lot of the surrounding Arab governments, to really get involved here, put their heads together and figure out a way forward, because he sees the status quo as untenable. But I will say this, the actual idea he proposed is not something that got a very good reception even from some corners of his own political base. They didn't like the idea of sending American troops to Gaza. So whatever the point of this idea was, it does not seem to have been fleshed out proposal to actually take action by the US Military.

[Ryan Knudson]

So the last thing I wanted to get your take on today was what you're seeing from Democrats right now. Obviously, the Trump administration has been moving with lightning speed on a number of different fronts. How would you characterize how Democrats have been responding thus far?

[Molly Ball]

Well, Democrats are in a tough spot. They are shut out of power at the federal level. They're in the minority in the House and Senate and obviously don't have the White House. And they've really been sort of behind the curve. I think it's fair to say Trump is moving so quickly that the normal rhythms of congressional action and the things that people do in Washington is not really adequate to keep up with that. So you have had congressional Democrats will plan a press conference for a day or two after Trump does something and by the time they get around to it, it's too late. Right? Again, there's only so much that Democrats in Congress can do, but we've seen them do things like start to try to jam up the process in the Senate for confirming nominees and getting more of the administration's agenda through the process. The Democrats in the Senate actually held an all night sit in to protest the nomination of Russ Vote at the Office of Management and Budget, who they blame for a lot of the destruction of the federal government that is currently taking place, but they're powerless to actually stop it. All they can do is sort of yell a lot and maybe slow it down a little.

[Ryan Knudson]

Well, this has been a fascinating conversation, as always. Any final thoughts to leave us with as we head into the weekend?

[Molly Ball]

Another busy week, and I think we're going to get another one next week as well.

[Ryan Knudson]

Thanks so much, Molly.

[Molly Ball]

Thank you. Ryan.

[Ryan Knudson]

Before we go, do you have any questions for us about what the Trump administration is is doing? Do you work for the federal government and are considering taking that buyout? Email us and let us know. Please send a voice Note to thejournalsj.com that's thejournalsj.com Trump 2.0 is part of the Journal, which is a co production of Spotify and the Wall Street Journal. This episode was produced by Enrique Perez de la Rosa and edited by Katherine Whelan with help from Alessandra Rizzo. Molly Ball is the Wall Street Journal's senior political correspondent. I'm Ryan Knudson. This episode was engineered by Peter Leonard. Our theme music is by so Wiley and remixed by Peter Leonard. Additional music in this episode by Bobby Lord, Emma Munger and Griffin Tanner. Fact checking by Kate Gallagher. Artwork by James Walton. Trump 2.0 will be back with a new episode next Friday morning. See you then.