Back to the Motor City
The government giveth and the government taketh away, so it’ll be understandable if folks who work for the domestic auto giants show up for the president’s Detroit speech this afternoon with a wee bit of apprehension.
The last time Donald Trump addressed the Economic Club of Detroit, he was a presidential candidate using the occasion to unveil a campaign proposal: tax-deductible vehicle loans.
Since then, Congress has put that promise in motion, allowing some taxpayers to deduct the interest they’re paying provided they bought new (not used) cars in 2025, and if the final assembly of those vehicles was done on this side of the border.
Ignore the fine print and score that as an incentive for American carmakers. Those in the auto industry also were able to breathe a little bit after new tariffs ended up being less extreme than initially threatened.
Flip side: the Trump administration ended consumer tax credits of up to $7,500 for electric car buyers, and US sales in November dropped 41% from a year earlier.
An example of shifting strategies to keep up with the government’s policy changes: the layoff of 1,600 Ford workers at a Kentucky electric vehicle battery plant, to be followed by a $2 billion conversion to produce cells for the electric grid. Ford has said it plans to reopen that facility in 2027 with a 2,100-person workforce.
It’ll be worth watching whether Trump drops a new idea for boosting America’s manufacturing power or sticks with a midterm election messaging recap of the past year.
Also Read: Trump Takes Populist Economic Platform to Battleground Michigan
‘Four Heart Attacks and a Stroke’
The backlash has been swift and vigorous as senators step up to defend the independence of the Federal Reserve following the revelation of a Justice Department investigation.
As Jonathan Tamari notes in this morning’s Congress Tracker, Sen. Lisa Murkowski (R-Alaska) called for a congressional investigation of the Justice Department if it continues probing Fed Chair Jerome Powell. Senate Majority Leader John Thune (R-S.D.) said accusations against Powell “better be real and they better be serious.” And Sen. Bill Cassidy (R-La.) said the allegations are as serious “as four heart attacks and a stroke.”
“If you accuse someone of perjury to the United States Congress, you better be prepared to defend your assertion. What was said, why it was said, why it’s incorrect, why the person was intentionally lying,” said Cassidy.
White House Press Secretary Karoline Leavitt said DOJ wasn’t acting on a direction from Trump. Read More
See Also:
- A Fed That Fights Back Threatens Trump’s Takeover Plan
- What the DOJ Subpoenas Mean for Fed Independence
- Why the Renovation of Federal Reserve Headquarters Costs $2.5 Billion
- Jeanine Pirro Is Going After Powell, Heedless of Backlash
- Global Central Bankers Show ‘Full Solidarity’ With Fed’s Powell
Eye on Inflation
One of the Fed’s main tasks is to set policies that prevent spikes in inflation. Today we get fresh information on how that’s going when the Bureau of Labor Statistics updates the Consumer Price Index.
Economists surveyed by Bloomberg said they expect the report to show only a modest pickup in inflation as 2025 drew to a close.
The number to watch is called the core CPI. It’s regarded as a measure of underlying inflation because it strips out volatile food and energy costs. Read More
Political Focus: Housing
In the political year of 2026, the stretched-out rubber band is snapping back and deregulation may be the new rage.
We saw it in California last year when Gov. Gavin Newsom (D) signed a housing legislation that would limit environmental challenges to building projects. Today, New York Gov. Kathy Hochul (D), who’s running for reelection this fall, is ready to follow that lead.
Raga Justin reports that Hochul’s State of the State address will describe plans to move fast on increasing the supply of affordable housing by reducing red tape for developers. Hochul’s branding it as a “Let Them Build” program. Read More
Also Read:
- NY Algorithmic Rent Pricing Ban Goes Into Effect Under New Law
- Los Angeles YIMBYS Plot An Apartment-Building Boom
- Lutnick Met Builders as Trump Dials Up Affordability Push
Power Play
Kelli Parsons, global CEO of Hill & Knowlton, will take over next month as CEO at the lobbying and strategy firm Avoq, Kate Ackley reports.
Parsons said business and policy are an “inflection point” with artificial intelligence-enabled technology. And she said she has a growth plan ready for the advocacy shop.
Avoq clients include Delta Air Lines and Google.
If you thought Trump’s first year in office was dizzying, be prepared.
As the second year begins, the “administration isn’t in a policy development or exploratory phase. It is executing,” writes Joseph Lai, a principal at BGR Group who served as a special assistant for legislative affairs in the president’s first term. Businesses who spent the past year building relationships will have to adjust to a White House that is speeding up.
“With midterm elections on the horizon, decisions will increasingly be made by smaller groups and executed more quickly,” according to Lai. “For business leaders, success in the year ahead will transition from who you know to whether one’s business objectives are aligned with the president’s America First agenda.”
Lai offers some principles for engaging with the administration now:
- Understand where the implementation happens
- Bring solutions, not objections
- Assume aggressive use of policy options
- Align with execution, not rhetoric
Read his full Insight here.
In Court
It’s only Tuesday and already a busy week for our teams following federal litigation.
New lawsuits include one filed by a US senator challenging an effort to demote the rank at which he retired from the military; one filed by the state where a woman was killed by an ICE agent who shot into her car; and one filed in support of the Trump administration’s efforts to suspend offshore wind projects.
Here’s a quick catchup:
- Senator Mark Kelly Sues Hegseth Over Censure, Demotion Moves
- Minnesota Sues Noem Over ICE Tactics After Fatal Shooting
- Illinois, Chicago Sue Over ‘Menacing’ Immigration Tactics
- Nantucket Offshore Wind Project Suspension Hit With Lawsuit
Before You Go
Conservatives Worry Trump Isn’t Living Up to ‘America First’
President Donald Trump’s most loyal backers are fretting over his expansive view of ‘America First’ with some concerned that his recent foreign policy priorities may be betraying the movement.
Senate Panel Releases Bill Allowing Some Stablecoin Rewards
Many digital-asset companies would continue to be able to offer rewards to customers who hold stablecoins under a new proposal tied to hotly-anticipated crypto market structure legislation.
Trump Risks Imploding China Trade Truce With Iran Tariff Vow
US President
Top DOL Aides Put on Leave During Secretary Misconduct Probe
Two senior aides to Labor Secretary Lori Chavez-DeRemer are on administrative leave after the Labor Department inspector general launched an investigation into claims that Chavez-DeRemer engaged in an inappropriate relationship with a staffer and committed travel fraud, according to a person with direct knowledge of the situation.
Trump’s Push for Credit Card Rate Cap Hurt by CFPB Limitations
President Donald Trump’s push to cap credit card interest rates at 10% for one year will have to go through Congress, because the agency that would likely be charged with enforcing the limit doesn’t have the authority to put one in place.
Data Centers Won Billions in Tax Breaks. Some States Are Balking
Data center developers have saved billions of dollars by negotiating long-term sales tax exemptions. Some states are rethinking those agreements, noting the lack of jobs created, the excessive drain on energy and water resources and their own looming budget woes.
DOJ’s Epstein Files Staffing Surge Beset by ‘Very Rocky Start’
The Justice Department’s newly expanded team reviewing files related to Jeffrey Epstein has struggled in its mission of expediting the Trump administration’s legally-mandated disclosures, according to people familiar with the process.
Greenland Calls on NATO to Ensure Defense Amid US Threats
Greenland’s government said it will intensify efforts to ensure the island’s defenses are managed within the
Trump Administration Takes Stake in Critical Mineral Firm ATALCO
The Trump administration is taking a $150 million equity stake to build the US’s only big producer of gallium, a critical mineral used in satellite systems and military radar.
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