The Journal. - Trump 2.0: Less Foreign Aid, More Tariffs

Episode Date: February 7, 2025

WSJ’s Joel Schectman joins Ryan Knutson and Molly Ball to explore the dismantling of USAID and what it means for America’s future as a global leader. Plus, Trump's tariffs, a Gaza proposal and remaking the CIA.   Further Listening:  - Inside USAID as Elon Musk and DOGE Ripped It Apart  - Trump’s Tariff Whiplash  Further Reading: - How Trump Gutted America’s $40 Billion Aid Agency in Two Weeks  - CIA Offers Buyout to Entire Workforce as Part of Trump Makeover  - Democrats Have a New Leader but Haven’t Come to Grips With Failure  Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, Molly. Hey, Ryan. So it's the third week of Donald Trump's presidency. And again, it has been another week of what feels like nonstop 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. Never a dull moment.

So what is it like being a reporter right now in Washington? 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. How long do you think the Trump administration can keep up this pace? drink from a fire hose. There's so much happening that it's difficult for any one person to keep track of it all. How long do you think the Trump administration can keep up this pace? 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. All right, so there is once again, a lot to talk about.

From the Journal, this is Trump 2.0. to talk about. From the Journal, this is Trump 2.0. I'm Ryan Knudson. And I'm Molly Baal. It's Friday, February 7th. Coming up, USAID, the CIA, tariffs, Gaza. We're going to try to turn that fire hose into a drinking fountain. Coming up, USAID, the CIA, tariffs, Gaza. We're gonna try to turn that fire hose

into a drinking fountain. Stay with us. You hear that? Pfft, ugh, paid. And done. That's the sound of bills being paid on time. But with the BMO Eclipse Rise Visa Card, paying your bills could sound like this.

Yes! Earn rewards for paying your bill in full and on time each month. Rise to rewards with the BMO Eclipse Rise Visa Card. Terms and conditions apply. All right, so let's start out today by talking about the dismantling of the US 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. Hey, how's it going? Hey Joel, thanks for being here. 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? USAID and why has the Trump administration decided to tear it apart? USAID, its role is a little bit complicated.

People think of it, I think, primarily in terms of aid that we're giving to other countries around the world. 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 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 clearer why it's so kind of like anathema to the Trump people, right? Because they really believe that power, be it soft power or hard power, that there's a bit of a zero-sum game to it, where you use all the leverage and power

that you have as a big country in a direct effort to make even allies succumb to your will. 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 ex-account no longer exists. I mean, is this agency effectively toast? 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 and enshrine the funding. It's an organization that has had 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 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. 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 Congress, doesn't Congress need to be the one that authorizes its demise? 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. You know, we're going to see the administration, I think, put forward some of its more aggressive legal theories about executive power. The sort of 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. 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. Yeah. 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 it. Another question is, is there going to be so much political blowback? But part of the reason that, you know, 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, you know, popular backlash or the response in the courts, that it's just effectively over before anyone can do anything about it.

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? You know, I think as Molly pointed out, like, once you do these things, once you break these things, no matter what happens after the fact, you kind of create the facts on the

crowd, right? Because the thing is, like, it's not like these NGOs that are being supported around the world, you know, like in East Africa or something, you're overflowing with money to begin with, right? And so, if you're able to cut off money to them for two or three months, right, while this all gets fought out, you know, most of those organizations are going to sort of go out of business, right?

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, some new USAID, a lot of that ability, even to do so, even to like write a proposal, to have an office, to have staff that could carry out the projects, a lot of that's going to do so, even to write a proposal, to have an office, to have staff that could carry out the projects.

All of that's going to be gone. 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. 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. I think the situation you have at CIA is very different from what we saw at USAID in terms of the intent here, right? And John Ratcliffe, the new CIA director, what he wants to see is a much harder edged 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 like the real hard-edged stuff that went on during the Cold War, the real like cloak and dagger spycraft, you know, 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 aren't down with this new kind of like

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 as being sort of like the other side of the coin of what they did with USAID, right?

You know, they're looking at like a much more bare-knuckle world and much more zero-sum games world where, you know, 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. All right. Well, thanks, Joel, so much for your time to help and helping us understand all this stuff.

Yeah, great to be on the show. Thanks a lot. Thanks, Joel. All right, we're going to take a short break. And when we come back, Malia and I are going to talk about tariffs, Gaza, and the Democrats. Wealthsimple's Big Winter Bundle is our best match offer yet. Get a 2% match when you transfer over an eligible RRSP. For a $50,000 transfer, that's a $1,000 cash bonus. Enough to buy a fancy parka.

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Trump announced late last week that he was gonna 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 Trump obviously made tariffs a central piece of his campaign. What's your take on the way this played out? Well, it's interesting because, you know, 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 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. Yeah, it seems like Trump was treating Canada and Mexico very differently than China. I mean, 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? 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 going to 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, right, 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. 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. 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. 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? 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, you know, 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, you know,

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. Mm hmm. 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?

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, you know, 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 Vogt at the Office of Management and Budget, who they blame for a lot of the distraction 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. Well, this has been a fascinating conversation as always. Any final thoughts to leave us with as we head into the weekend?

Another busy week and I think we're going to get another one next week as well. Thanks so much, Molly. Thank you, Ryan. Before we go, do you have any questions for us about what the Trump administration is doing? Do you work for the federal us about what the Trump administration 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 thejournal at wsj.com.

That's thejournal at wsj.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 Catherine Whalen, 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. Thanks for watching. See you then.