First, a confession: your correspondent must admit he was as flummoxed as everyone else by President Trump's tariff threats, particularly those against Canada. We were aware of reports of fentanyl smugglers using Canadian trucking to smuggle fentanyl across the border, but an across-the-board 25% tariff seemed like attacking a fly with a sledgehammer. Not to mention the second-order consequences of the US publicly bullying perhaps its staunchest and friendliest ally.

But…it all worked out!

Canada will put more resources into border and law enforcement and have closer coordination with US authorities, and there won't be a tariff.

The memes, all around us, are becoming real: Trump really is engaging in 4D chess, and you really should trust the plan, because patriots really are in control.

Throughout Trump's presidencies, much hay was made of the so-called "madman theory," reportedly pioneered by Nixon: make your opponents believe that you are mad, that you really might do crazy things, and therefore get more negotiating leverage.

The problem with the madman theory is that it doesn't work if you're saying "I'm doing the madman theory."

But Trump seems to be able to transcend this somehow. It feels like people haven't fully priced in a few things about Trump 2.0: he spent his four years in exile thinking, planning, and honing the craft of statesmanship; the fact that the Blob tried to ruin him and send him to prison has clearly radicalized him; and this is his last term, so all he has to worry about is his legacy.

Trump is the seemingly-impossible: the Sane Madman. You really can believe that he would slap a 25% tariff on Canada because he believes it's a good thing to do. At the same time, with Trump, you can always do a deal. This is an incredibly powerful weapon for the United States—perhaps not one that can or will always be used judiciously, but a new and powerful weapon nonetheless.

Policy News You Need To Know

#Chyna — A new blanket 10% tariff on goods imported from China has come into effect. Beijing has responded with a set of retaliatory measures, including tariffs of 10 to 15% percent on imports of US commodities and cars, as well as new export controls on rare metals.

#USAID — Politico writes: "The official said a group of USAID officials were commiserating together on Sunday when, one by one, they began to lose access to their email and work computers." When your correspondent read this sentence, he laughed out loud. It's hard to see how the USAID fracas is anything but good politically for the Administration: foreign aid is just very unpopular across party lines. It's good to highlight absurdities like "$70,000 for a production of a DEI musical in Ireland, $47,000 for a transgender opera in Colombia, $32,000 for a transgender opera in Peru." What we were most surprised by was the extent to which USAID programs are not aid in any sense that a rational person would define (which may or may not be a good thing as such), but frankly political influence operations, and political influence operations aligned less with the national interest goals of the United States than with the "globalist" class that in many cases controls the US foreign policy and national security apparatus. USAID was clearly a rogue agency.

#Ed — As Elon Musk has stated that DOGE's next target after USAID will be Ed, it's good to remind ourselves that there are some bipartisan points of overlap on education. AEI's Rick Hess, whose work is always worth reading, explains.

#RemainInMongolia — El Salvadorian President Nayib Bukele has offered to accept deportees from the US. This is significant because deporting illegals is more difficult when there's nowhere to deport them to. Some countries may not want their migrants back; they may be bullied into doing so anyway, as Trump did with Colombia, and surely that will work in most cases, but may still take time. And some countries will be unable to take them because they don't really have a functional government (say, Libya), or are simply "un-bully-able" (say, Afghanistan). Which is why Western countries that are serious about deportation have sought to find "third-party agreements" where a third party, for a fee, agrees to take in migrants that can't, for whatever reason, be sent back to their countries of origin.

#Immigration — Looks like at least some employers are going to work with ICE. Dollar General is instructing store managers to let immigration enforcement agents who visit their locations speak with staff and customers, showing how companies are preparing to cooperate on the Trump administration’s priorities. More from Bloomberg.

#DEI — The DOJ has just created an anti-semitism task force. As Chris Rufo writes, "The cause here is noble, but the implementation, like the related executive order, is a misstep. The whole point of the 'abolish DEI' campaign is to stop having special carve-outs, programs, and commitments on the basis of race or ethnoreligious identity. The better approach is to have a single colorblind standard that will fight harassment and discrimination against any group. We can have a Task Force on Campus Equality, which, in practice, will address the significant antisemitism problem, while retaining the higher principle."

#SWF — You may have seen that President Trump signed an executive order "creating a Sovereign Wealth Fund." This is not correct. He has signed an order tasking the Treasury and Commerce Departments to create this fund, which raises more questions than it answers. Presumably establishing an entity and, especially, endowing it with investable capital, would require an Act of Congress. Perhaps, like DOGE, it can be a re-brand of an existing entity, like the Export-Import Bank. As AI-CIO writes, "Multiple U.S. states already have sovereign funds, such as the $80 billion Alaska Permanent Fund, which invests the state’s oil revenues. There are 21 state sovereign funds in the U.S. across 20 states; Texas has two."

#Reg — Stunning fact from American Action Forum: "Across all rulemakings this past week, agencies published $10.8 million in total costs and no new paperwork burden hours." If you were following the Biden Administration, this is a sea change.