Tariffs, layoffs and policy upheavals: Trump’s turbulent first month in office

FP Staff February 15, 2025, 21:23:29 IST

In his first month of a second term, President Donald Trump has swiftly reshaped US policies, empowering Elon Musk to overhaul federal agencies while imposing tariffs and dismantling social programs. Amid mass firings and court battles, Trump’s moves spark inflation concerns and international backlash.

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Donald Trump. File Image= Reuters
Donald Trump. File Image= Reuters

As President Donald Trump nears the end of his first month in his second term, he has acted with remarkable speed and force to reshape American social and political norms, overhaul the economy and redefine the country’s global role.

Simultaneously, he empowered Elon Musk, a billionaire entrepreneur originally from South Africa to orchestrate the dismissal of thousands of federal employees and potentially dismantle entire government agencies established by Congress.

These moves have largely overshadowed Trump’s aggressive stance on immigration and border security, along with his push to overhaul social policies by dismantling diversity, equity, and inclusion programs and curtailing transgender rights.

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The president has also introduced numerous new tariffs on US trade partners and threatened additional measures, despite warnings from economists that these moves could drive up consumer costs and exacerbate inflation.

Here’s a look at the first four weeks:

Mass firings across federal agencies

The Trump administration fired thousands of workers who were still in probationary periods common among new hires. Some had less than an hour to leave their offices.

Those potentially losing jobs include medical scientists, energy infrastructure specialists, foreign service employees, FBI agents, prosecutors, educational and farming data experts, overseas aid workers, and even human resources personnel who would otherwise have to manage the dismissals.

Dismantling the Consumer Financial Protection Bureau

At the Consumer Financial Protection Bureau, which was created to protect the public after the 2008 financial crisis, employees say the administration not only wants to cut nearly the entire workforce but also erase all its data from the past 12 years. The administration agreed to pause any further dismantling of the agency until March 3, under a judge’s order.

While Trump promised to turn Washington upside down, his moves could have far-reaching implications for thousands of federal employees around the country and drive up the unemployment rate if large numbers of layoffs happen at once.

Court battles

Court challenges to Trump’s policies started on Inauguration Day and have continued at a furious pace since Jan. 20. The administration is facing some 70 lawsuits nationwide challenging his executive orders and moves to downsize the federal government.

The Republican-controlled Congress is putting up little resistance, so the court system is ground zero for pushback. Judges have issued more than a dozen orders at least temporarily blocking aspects of Trump’s agenda, ranging from an executive order to end US citizenship extended automatically to people born in this country to giving Musk’s team access to sensitive federal data.

While many of those judges were nominated by Democratic presidents, Trump has gotten unfavorable rulings from judges picked by Republican presidents, too. Trump suggested he could target the judiciary, saying, “Maybe we have to look at the judges.” The administration has said in the meantime that it will appeal, while White House press secretary Karoline Leavitt railed against the orders slowing the president’s agenda, calling each “an abuse of the rule of law.”

The administration has notched a few wins, too, most significantly when a judge allowed it to move forward with a deferred resignation program spearheaded by Musk.

Inflation concerns for the White House

Amid the policy upheaval, the latest economic data could prompt some White House worries. Inflation rose at a monthly rate of 0.5% in January, according to the Labor Department. Over the past three months, the consumer price index has increased at an annual rate of 4.5% — a sign that inflation is heating up again after having cooled for much of 2024.

Economic promises vs. reality

Trump told voters he could lower inflation, and do so almost immediately after taking office. But Leavitt, while blaming Trump’s predecessor, Democrat Joe Biden, acknowledged the latest inflation indicators were “worse than expected.”

Slumping retail sales signal trouble

More trouble signs came when the Commerce Department reported that retail sales slumped 0.9% on a monthly basis in January. A drop that large could signal a weakening in consumer confidence and economic growth.

Declining industrial production

The Federal Reserve’s report on industrial production also found that factory output slipped 0.1% in January, largely due to a 5.2% drop in the making of motor vehicles and parts. These could all be blips, which means the monthly data in February will really matter.

Trump’s new tariff war

After previously imposing tariffs on China and readying import taxes on Canada and Mexico, Trump rolled out what he called the “big one.” He said his administration would put together new tariffs in the coming weeks and months to match what other countries charge.

International backlash against tariffs

Other nations hardly find Trump’s approach fair. From their vantage point, he is including items other than tariffs such as value-added taxes, which are akin to sales taxes. That means the rates could be much higher than a standard tariff in Europe.

Expanding trade penalties

On top of that, Trump plans separate additional tariffs on autos, computer chips, and pharmaceuticals, in addition to the 25% tariffs on steel and aluminum that he announced on Monday.

It is not clear whether these trade penalties are mainly negotiating tools or ways for Trump to raise revenues. So far, he has suggested that they are both.

Congress finds itself confounded by the onslaught as its institutional power — as the Constitution’s first branch of government with its unmatched authority over federal spending — is being eroded in real time.

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House Speaker backs Musk’s team

House Speaker Mike Johnson, R-La., said he finds the work of Musk’s team “very exciting.” Johnson said Trump is “taking legitimate executive action.” But even among congressional Republicans, there were small signs of protest emerging — letters being written and phone calls being made — to protect their home-state interests and constituents as funding for programs, services, and government contracts is being dismantled.

Concerns over deportations

Rep. Carlos Gimenez, R-Fla., urged the Homeland Security Department not to issue blanket deportations for Venezuelan migrants who fled their country and now call the Miami-area home. “I’m not powerless. I’m a member of Congress,” he said.

Democratic resistance

Democratic lawmakers have joined protesters outside shuttered federal offices, arguing Trump and Musk had gone too far. Democrats suggested legislation to protect various programmes, and even filed articles of impeachment against the president over his plans to bulldoze and redevelop Gaza.

Trump’s call with Putin

With his phone call to Russian President Vladimir Putin this past week, Trump is hoping he initiated the beginning of the end of the Kremlin’s war on Ukraine.

US-Russia negotiations begin

The leaders agreed to have their teams “start negotiations immediately.” After getting off the phone with Putin, Trump called Ukrainian President Volodymyr Zelenskyy to discuss getting both sides to the negotiating table.

A pivotal moment in the Ukraine war

The Putin call is a monumental development in a war that has left hundreds of thousands dead or seriously wounded. But the way ahead remains complicated.

Zelenskyy’s stance on negotiations

Zelenskyy said he will not meet with Putin until a plan for peace is hammered out by Trump. Trump has gotten blowback when European leaders sharply criticized him and Defense Secretary Pete Hegseth for suggesting that NATO membership was not in the cards for Ukraine.

The challenge of security guarantees

The White House faces a further quandary with Zelenskyy wanting the U.S. and other countries to provide security guarantees for Ukraine, and Zelenskyy insisting that he and Trump iron out an agreement on the contours of any peace deal.

With inputs from AP

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