"Former President Donald Trump has claimed victory, Vice President Kamala Harris has faced defeat, and the Republicans have regained control of the Senate.
What happens next?
In today’s *Decision Points*, we’ll break down three key developments to keep an eye on in the coming days, weeks, and months."
All Eyes on the House
Democrats had expressed optimism they could erase the narrow GOP majority in the House. Those good feelings have faded somewhat. There are still dozens of races to call (c’mon California, it shouldn’t take until the next midterm elections to finalize your results).
The GOP could potentially achieve a political “grand slam,” controlling the White House, Senate, Supreme Court, and House of Representatives. For Democrats, losing the House would be a severe setback, drastically limiting their influence in Washington.
Here's why the House matters:
The House of Representatives, as specified by the Constitution, is where “all bills for raising revenue shall originate.” This role covers more than just the federal budget; the House also initiates the ratification of trade agreements. Within the next few years, Congress will revisit Trump’s tax cuts and potentially amend his United States-Mexico-Canada Agreement (USMCA). During the original USMCA negotiations, a Democrat-led House worked with a skeptical White House to make the deal more progressive. If Democrats hold the majority, they set the legislative agenda and manage key committees, which include investigative powers over the administration. Without a majority, however, Democrats are largely relegated to press statements rather than legislative control.
**Trump’s Nominees**
In D.C., there’s intense speculation around whom Trump might nominate for major roles in the White House and various agencies. “Personnel is policy,” as the saying goes. While this speculation may feel remote to most Americans, Trump’s picks could profoundly impact everyday lives.
This “silly season” of speculation includes various insiders anonymously pushing for positions: “‘Quote me as ‘an insider.’ I’m in line for deputy secretary of defense.’” A central question of Trump’s second term is whether he will appoint seasoned conservatives or choose loyalists with more extreme views. While the answer remains uncertain, these choices will undoubtedly shape the administration’s policy direction.
This period is also crucial for lobbying, as key industry players press Trump’s transition team to endorse candidates aligned with their agendas. For instance, industry groups may push for an EPA head who opposes stringent environmental regulations.
Trump’s first major appointment was announced on Thursday: Susie Wiles, one of his campaign managers, will be White House chief of staff. Wiles, the first woman to hold this role, is seen as Trump’s attempt to bring stability to his administration, a departure from the turbulence of his first term.
**Trump’s Agenda Begins to Take Shape**
Perhaps the most critical issue now is which campaign promises Trump will prioritize. While he laid out many ambitious goals, which ones will take center stage on Day One, and when can we expect the specifics?
One prominent example is Trump’s plan for an extensive deportation initiative. Details remain unclear, including cost estimates, but there’s likely little price sensitivity among his base, who strongly support the idea. However, questions arise about where detainees will be held. Historical precedents, like the detention of Japanese Americans during World War II, hint at troubling possibilities. Private prison companies are already seeing stock surges in anticipation of this policy.
Additional questions loom over international logistics: how will Trump compel other nations to accept deportees?
Then there’s the issue of tariffs. Trump has signaled a willingness to initiate trade wars, proposing tariffs of 10-20% on all imports and up to 100% on Mexican goods if Mexico does not curb migration across the U.S. border. These moves could strain global trade relationships and have far-reaching economic impacts.
But will Trump actually follow through on his tariff threats? While tariffs are aimed at foreign countries, it's American consumers and businesses that typically feel the immediate effects. Higher import costs could lead to price spikes across the economy—not only for consumer goods like avocados but also for critical materials needed by American manufacturers. Widespread tariffs could spark retaliatory trade wars with major trading partners, risking disruptions across a broad range of sectors.
Trump takes office with a strong economy benefiting from a post-pandemic recovery that outpaced those of other developed nations. However, inflation during the Biden administration put pressure on lower-income Americans and those with fixed incomes, underscoring the challenges ahead.
Will Trump gamble with tariffs despite these risks? The answer may shape the economic landscape in profound ways. For now, all we can do is watch and see how his promises align with his policies.