Trump is unravelling the world order with unprecedented speed
The scope and velocity of Trump’s moves to shrink the US government, pressure allies and reorient the global economy are creating a ripple effect stretching from American main streets across the world.
The scope and velocity of President Trump’s moves to shrink the US government, pressure US allies and reorient the global economy are creating a ripple effect that stretches from American main streets to far-flung corners of the world.
Some of the disruption is intentional, with Trump and his chief deputy in the government overhaul, Elon Musk, moving to disempower the nation’s international-aid agency – US Agency for International Development – and other federal programs, as well as to unwind the climate-change and DEI policies of the prior White House. Some is a consequence of the start-and-stop quality of Trump’s efforts to move with unparalleled speed in putting his stamp on government – a sweeping freeze on federal spending that was paused by the courts, a threat to place high tariffs on Canadian and Mexican goods that Trump issued and then rescinded, at least for now.
To some Americans, Trump is following through on exactly the promises he made during the campaign to cut wasteful spending and fight what they see as a “deep state” of bureaucrats obstructing his agenda.
In Wisconsin, a freeze in federal funding has Head Start preschool programs racing to secure lifelines from banks and foundations. In West Virginia, a start-up has slammed the brakes on installing rooftop solar panels after its government reimbursement for about 30 such projects fell through. In Virginia, some community health centres have closed, at least temporarily.
To America’s north, a Montreal company that makes ladies’ tights furloughed roughly 140 employees, citing the threat of tariffs. In Colombia, 18 Blackhawk helicopters used for anti-narcotics operations were grounded for lack of US-funded fuel and maintenance amid a surge in local drug violence. Along the Panama Canal, a standoff over the US State Department’s claim that it had won free passage for government vessels threatened to up-end a longstanding agreement that no country receive such preferential treatment.
Many chief executives entered the year feeling optimistic that the incoming administration would cut regulations, lower taxes and usher in an environment where companies could bullishly pursue deals. Many discounted aspects of Trump’s platform that they disliked – such as tariffs – and felt confident that they could benefit from Republican promises to bolster the economy.
Now, some chief executives have become concerned by the flood of executive orders, leaving them to worry that the administration may be more challenging to navigate than they expected.
“Is the administration a provocateur or a problem solver? I think it’s an open question,” said Constantine Alexandrakis, CEO of leadership advisory firm Russell Reynolds Associates, who has been in touch with executives across industries.
He asked: “Is this just going to be a constant barrage of things, or is this going to lead to some steady state that everyone can sort of rely on and build upon?” For certain Trump supporters, the early moves are gratifying signs he’s delivering on his campaign pledge to shake things up.
“I’m 100 per cent in favour of everything he’s done,” said Laura Hickey, 65, a real estate broker and Republican in Queens. “I’m paying taxes, and property taxes, and taxes on my business – every which way I turn around I’m taxed. And we’re just giving money away to foreign countries and spending on ridiculous things.” Hickey recited some examples she had seen in TikTok videos.
On Capitol Hill, even Republican lawmakers have said some constituents are nervous about what they’re seeing in Washington. One House Republican from a midwestern district recounted fielding worried calls from a natural gas marketer and a newspaper publisher concerned that Trump’s tariffs on Canadian imports would hurt their businesses, as well as from a car dealership fretting over its stable of foreign automobiles.
Lawmakers from both parties say their offices have been flooded with calls from voters protesting Musk’s role in tampering with the machinery of executive-branch staffing and funding. Sen. Lisa Murkowski (R., Alaska) said Wednesday on social media that the Senate phone system has been receiving around 1,600 calls each minute, compared to the 40 calls per minute it usually gets, disrupting the system.
Job cuts The unexpected shake-up is hitting a range of businesses, especially those in areas impacted by tariffs or Trump’s efforts to shift energy policy away from renewable resources.
At Stanley Black & Decker, the Connecticut-based tool maker, officials said last year that it was not cost effective to move production to the US, and they were unsure there was enough domestic labour to do so. The company said this week that it has reduced production in China, which Trump has hit with additional tariffs, and will continue to accelerate supply chain moves.
Although Trump gave Canada a 30-day reprieve from a 25 per cent tariff he has threatened, the possibility of a trade war has prompted layoffs at Canadian businesses.
South Shore Furniture, based in Quebec, laid off 115 workers Wednesday, citing a shift by its retail customers to buy from Asia rather than Canada due to the prospect of tariffs. The Montreal-based tights maker Sheertex, which announced Wednesday that it will furlough roughly 140 employees because it needs to prepare for tariffs, does 85 per cent of its business in the US A 25 per cent tariff on top of tariffs it already pays would make the business unviable, said Katherine Homuth, Sheertex’s CEO.
Dan Conant, chief executive of Solar Holler, a West Virginia start-up that builds rooftop solar projects, said $6.2 million in federal funding had been frozen that was expected to pay for about 30 projects the company had already completed. He said there’s no clarity about when, or whether, his company will be able to access the cash.
As a result, Solar Holler had to halt another 30 to 40 commercial projects worth about $25 million that it had already been contracted to build. The freeze is “ripping the rug out from folks,” Conant said.
Unpredictability generated by Washington is bringing new urgency to closing mergers and acquisitions once they are in motion, out of fear that unexpected government actions will impact the dynamics of the deal, said Kison Patel, chief executive of DealRoom, which makes software used in M & A deals.
“It’s changing the way deals are being put together, in that you’re putting a lot more emphasis on planning these ‘what if’ situations, because there is so much uncertainty,” said Patel, who also hosts an M & A podcast. “We’ve seen tariffs pop up out of nowhere. That changes key dynamics of a business.” Skipping schools Undocumented immigrants in some communities are skipping work and keeping their children home from school on concerns about Trump’s efforts to ramp up deportations. In Dallas, teachers are reporting to their labour union that some students have stopped attending classes, particularly at high schools, said Rena Honea, president of Alliance/AFT, the largest teachers’ union in Dallas.
Federal payments to many social-service organisations have restarted since a court rescinded Trump’s sweeping freeze on much government spending, and a large number of Head Start programs around the country, for example, say they can access money again to pay staff and cover bills. But the payment system remains spotty.
As of Thursday afternoon, at least 52 Head Start grant recipients, serving nearly 20,000 children from low income families, were still unable to access their approved funding, the National Head Start Association said. Those programs operate in 25 states, as well as the District of Columbia and Puerto Rico.
In Virginia, the Capital Area Health Network has had to close half of its six clinics because they were unable to access their expected federal grant funding. More broadly, about one-third of members of the Virginia Community Health Association, including CAHN, haven’t been able to draw their federal funding, including one that had to cut obstetrics services, a spokesman for the association said.
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