Trump is dismantling the World order
The breadth and speed of President Trump’s initiatives to reduce the size of the U.S. government, exert pressure on American allies, and reshape the global economy are generating a ripple effect that extends from the streets of America to distant regions across the globe. Certain disruptions appear to be deliberate, as Trump and his principal ally in the governmental restructuring, Elon Musk, seek to diminish the authority of the U.S. Agency for International Development and other federal initiatives, while also reversing the climate-change and diversity, equity, and inclusion policies established by the previous administration. The situation reflects the erratic nature of Trump’s attempts to rapidly imprint his vision on the government—an extensive freeze on federal expenditure halted by judicial intervention, alongside a proposed imposition of elevated tariffs on Canadian and Mexican imports that was announced and subsequently retracted, at least temporarily.
For a segment of the American populace, Trump is delivering on the commitments he articulated during his campaign, aiming to eliminate unnecessary expenditures and combat what they perceive as a “deep state” of bureaucrats hindering his policy initiatives. In Wisconsin, a halt in federal funding has prompted Head Start preschool programs to urgently seek financial support from banks and philanthropic foundations. A startup in West Virginia has halted the installation of rooftop solar panels following the collapse of government reimbursement for approximately 30 projects. In Virginia, several community health centers have ceased operations, albeit for the time being.
In Canada, a Montreal-based manufacturer of women’s tights has laid off approximately 140 workers, attributing the decision to the looming risk of tariffs. In Colombia, a fleet of 18 Blackhawk helicopters designated for anti-narcotics operations has been rendered inoperative due to insufficient U.S.-funded fuel and maintenance, coinciding with an escalation in domestic drug-related violence. The situation along the Panama Canal has escalated, as tensions rise over the U.S. State Department’s assertion of having secured free passage for government vessels. This claim poses a significant risk to a long-established agreement that prohibits any nation from enjoying preferential treatment in this vital waterway.
Numerous chief executives commenced the year with a sense of optimism, anticipating that the new administration would reduce regulations, decrease taxes, and create a climate conducive to aggressive corporate deal-making. Numerous individuals overlooked certain elements of Trump’s agenda that they found unappealing—tariffs, for instance—and maintained a belief that they could gain from Republican commitments to enhance economic performance. Recently, a number of chief executives have expressed apprehension regarding the surge of executive orders, prompting concerns that the administration may prove more difficult to manage than initially anticipated.
Last month, individuals convened at a rally in proximity to the White House in Washington to express their dissent against President Trump’s directive to suspend all federal grants and loans. “Does the administration act as a provocateur or as a problem solver?” “It remains an open question,” remarked Constantine Alexandrakis, CEO of leadership advisory firm Russell Reynolds Associates, who has engaged with executives across various sectors. He inquired: “Will this merely result in an unending stream of developments, or can we anticipate a stable condition that all can depend on and develop further?”
For some supporters of Trump, the initial actions are encouraging indicators that he is fulfilling his campaign promise to disrupt the status quo. “I fully support all of his actions,” stated Laura Hickey, 65, a real estate broker and Republican from Queens. “I am subject to various taxes, including income taxes, property taxes, and business taxes—every direction I look, I encounter taxation.” We are allocating substantial financial resources to foreign nations and investing in initiatives that seem imprudent. Hickey presented several instances she had observed in TikTok videos.
On Capitol Hill, even Republican lawmakers acknowledge that certain constituents express apprehension regarding the developments unfolding in Washington. A House Republican representing a midwestern constituency shared experiences of receiving anxious communications from a natural gas marketer and a newspaper publisher, both apprehensive that Trump’s tariffs on Canadian imports could adversely affect their operations. Additionally, a car dealership expressed concerns regarding the implications for its inventory of foreign automobiles. Legislators across the political spectrum report an overwhelming influx of communications from constituents expressing discontent regarding Musk’s involvement in influencing the dynamics of executive-branch appointments and financial allocations. On Wednesday, Senator Lisa Murkowski (R., Alaska) reported via social media that the Senate phone system is currently inundated with approximately 1,600 calls per minute, a stark contrast to its typical volume of 40 calls per minute, thereby causing significant disruption to the system.
The unforeseen upheaval is affecting a variety of enterprises, particularly those in sectors influenced by tariffs or the former president’s attempts to redirect energy policy away from renewable resources. Stanley Black & Decker, the tool manufacturer headquartered in Connecticut, indicated last year that relocating production to the United States was not economically viable, and expressed doubts regarding the availability of sufficient domestic labor for such a transition. The firm announced this week a reduction in production in China, a country that has faced increased tariffs under Trump, and indicated it will persist in expediting adjustments to its supply chain.
Despite Trump’s decision to grant Canada a 30-day reprieve from a looming 25% tariff, the specter of a trade war has already led to layoffs within Canadian enterprises. South Shore Furniture, headquartered in Quebec, announced the layoff of 115 employees on Wednesday, attributing the decision to a trend among its retail clients favoring imports from Asia over domestic purchases, driven by the anticipated imposition of tariffs. Sheertex, a tights manufacturer headquartered in Montreal, revealed on Wednesday that it will furlough approximately 140 employees in response to the need for tariff preparations, with 85% of its operations concentrated in the U.S. market. Katherine Homuth, CEO of Sheertex, stated that an additional 25% tariff on existing tariffs would render the business unviable.
Dan Conant, the chief executive of Solar Holler, a startup based in West Virginia specializing in rooftop solar installations, reported that $6.2 million in federal funding has been frozen, which was anticipated to finance approximately 30 projects the company has already completed. He indicated that there is a lack of clarity regarding the timeline or the possibility of his company gaining access to the funds. Consequently, Solar Holler was compelled to suspend an additional 30 to 40 commercial projects valued at approximately $25 million that had already been contracted for construction. According to Conant, the freeze is effectively “ripping the rug out from folks.”
The unpredictability emanating from Washington is instilling a heightened sense of urgency in the completion of mergers and acquisitions that are already underway. This stems from concerns that unforeseen governmental actions could alter the fundamental dynamics of the transactions, according to Kison Patel, chief executive of DealRoom, a firm specializing in software for M&A activities. “The dynamics of deal-making are evolving, with a heightened focus on strategizing for various contingencies, given the prevailing uncertainty,” remarked Patel, who also hosts a podcast on mergers and acquisitions. “Tariffs have emerged unexpectedly.” This alters fundamental dynamics within a business.
In certain communities, undocumented immigrants are opting to forgo work and are keeping their children out of school due to apprehensions regarding the intensification of deportation efforts under the Trump administration. In Dallas, educators are informing their labor organization that a number of students, especially at the high school level, have ceased attending classes, according to Rena Honea, president of Alliance/AFT, the city’s largest teachers’ union. Following a court’s decision to overturn Trump’s extensive freeze on government expenditures, federal funding to numerous social-service organizations has resumed. Many Head Start programs nationwide report renewed access to financial resources, enabling them to compensate staff and manage operational costs. However, the payment system continues to exhibit inconsistencies.
As of Thursday afternoon, a minimum of 52 Head Start grant recipients, catering to nearly 20,000 children from low-income families, remained unable to access their sanctioned funding, according to the National Head Start Association. The programs function across 25 states, in addition to the District of Columbia and Puerto Rico. In Virginia, the Capital Area Health Network has been compelled to shutter half of its six clinics due to a failure to secure anticipated federal grant funding. In a broader context, approximately one-third of the Virginia Community Health Association’s members, including CAHN, have been unable to access their federal funding. This has led to significant operational challenges, including the cessation of obstetrics services by one member, according to a spokesperson for the association.
