The Briefing, Vol. XIII, Issue 19
May 12, 2025
This week:
- UK deal signals a hopeful endgame for Trump’s tariff wars
- Another blow to GOP Senate hopes as Kemp bows out
- Tillis tempts fate by thwarting Trump nominee
Outlook
Economy: The 2026 election will go much rougher for Republicans if the economy is suffering. The good news for now is that the early hiccups of the trade wars may not signal an underlying weakness in the U.S. economy. Unemployment remains low and GDP shrinkage last quarter is mainly attributable to the front-loading of imports ahead of expected tariffs.
But Trump will need to get things on track soon and restore confidence and certainty if he is to preserve party control of one or both houses of Congress. Potentially at stake will be his ability to confirm judges and justices in the second half of his term — a task whose importance cannot be understated, and which becomes clear from watching so many judges hold up his initiatives now with nationwide injunctions.
When President Trump unilaterally imposed high tariffs on a number of U.S. trading partners — including both such close partners as Canada and Mexico and hostile powers such as China — markets reacted very badly. The massive decline in the S&P 500 at the beginning of April began to shake the faith of many in whether there was any sort of coherent plan behind Trump’s activity.
However, in the time since, it appears that Trump’s team has come to a much more constructive point in the process. Trump no longer seems dead-set on sabotaging himself with some of the more radical protectionist ideas that some hold within his administration.
The S&P’s reaction has been to regain all ground lost since early March, before any tariffs had been imposed (at least as of the market’s opening Monday morning). Part of this story is the basic U.S.-United Kingdom outline of a trade deal announced late last week to remove many crucial non-tariff barriers to trade between the two allies — something Trump had been unable to do in his first term.
Although Trump’s preoccupation with using trade policy to change trade balances is not in line with basic economic theory, it is noteworthy that the U.S.-UK deal will increase trade with a country with whom the U.S. has a large trade surplus — and that’s a good thing. Further deals with Pacific allies and friendlies such as the Philippines, Japan, Korea and Vietnam could help further isolate China at a time when conflict seems imminent, if this is the direction things are to take.
On the other side of that coin, China is increasingly desperate for a deal, given the deflationary and debt crises it was already facing before tariffs forced the idling of many of its factories. This morning, U.S. and China have both agreed to a 90-day rollback of tariffs (China alone had not received such a reprieve last month). U.S. trade talks with China could still produce a result more favorable to the U.S., if this is the administration’s preferred path.
Governor 2026
Florida: If she does choose to run, First Lady Casey DeSantis (R) would find herself very competitive against the Trump-endorsed Rep. Byron Donalds (R) in a statewide Republican primary, according to a new poll by the James Madison Institute, a free-market think tank in Florida. The poll has her at 29 percent to Donalds’ 28 percent — a six-point improvement for Donalds since the poll was taken last month.
Senate 2026
Georgia: The decision by Gov. Brian Kemp (R) not to run for Senate is yet another gut-punch to Republicans’ hopes of building up or at least protecting their Senate majority in 2026. This comes on the heels of former Gov. Chris Sununu (R) shrugging off a bid for Senate in New Hampshire.
Sen. Jon Ossoff (D) is rejoicing over Kemp’s departure, as he would have been the underdog in a race against Kemp, trailing from the outset and likely to lose.
There will be a Republican nominee, however, and it will not be Rep. Marjorie Taylor Greene (R), who subsequently ruled out a bid herself.
One Republican now in the race is Rep. Buddy Carter (R), who announced his bid late last week. A potential matchup between him and Ossoff hasn’t been polled since February, but he came in far behind (47 to 39 percent) largely due to name recognition — 77 percent in the poll had either never heard of him or hadn’t heard enough to form an opinion (see page 9 here).
The only other Republican declared in the race is Insurance Commissioner John King (R), but there is talk of Trum preferring either Rep. Mike Collins (R), Small Business Administration director and former Sen. Kelly Loeffler (R), and Rep. Brian Jack (R). Kemp is reportedly involved in helping the White House select the best candidate to unite behind.
Louisiana: As Democrats decry Trump’s “Revenge Tour,” it is important not to forget Sen. Bill Cassidy (R), who voted for conviction in Trump’s second impeachment in early 2021. News reports point to an institutional push by Louisiana Republicans, and by Gov. Jeff Landry (R) in particular, for Rep. Julia Letlow (R) to mount a White House-backed primary against Cassidy.
Louisiana, one of the last Southern States to give up on the Democratic Party (its last Democratic Senator only lost in 2014 and it had a Democratic governor through 2023), is now a very red state and unlikely to elect any Democrat to the U.S. Senate.
North Carolina: Sen. Thom Tillis (R), who narrowly won re-election in 2020 only thanks to his opponent’s explosive last-minute adultery scandal, is now officially tempting fate. He has thwarted Trump’s appointment of Ed Martin as U.S. attorney for the District of Columbia, on the grounds that Martin had represented Jan. 6 riot defendants and then dismissed some of their cases after taking office as acting U.S. attorney.
This seems like an odd flex, considering how much Senate Republicans have already allowed Trump to get away with (especially with tariffs). But now it puts Tillis squarely in the cross-hairs. As the weakest Republican seeking re-election in 2026, he was already cruising for a party primary before this. But so far, there is only speculation that anyone formidable will jump in, and then mostly just Republican members of the congressional delegation and first daughter-in-law Lara Trump.
Texas: A Republican poll was released earlier this month — possibly solely intended to scare Republicans into renominating Sen. John Cornyn (R) — that showed Attorney General Ken Paxton (R) losing badly to 2024 Democratic nominee Colin Allred (D). The actual numbers were 52 percent for Allred and 37 percent for Paxton.
Paxton, a controversial figure and staunch Trump ally, won re-election in 2022 and easily survived an impeachment attempt in 2023. Having soundly defeated the Bush wing of the party in his 2022 primary (defeating then-State Land Commissioner George P. Bush himself), Paxton is now considered an overwhelming favorite against Cornyn in the primary next March, as we have previously noted. There is also some talk of another Trump ally, Rep. Wesley Hunt (R), who represents a suburban Houston district, potentially making a bid.
