Policy Week in Review – Shutdown Updates, Trade Deals, and Elections Tuesday
Updated: Apr 23
Government Shutdown Update – Is There an End in Sight?
This week the Senate tried and failed for the 13th time to pass a bill to reopen the government which has been shut down for the entire month of October. Neither side has made any major concessions. However, there are reports on the Hill that the pace of talks has increased.
There are several reasons that the pressure could be mounting on both sides to get a deal soon.
Travel delays are mounting rapidly as air traffic controllers work without pay. This will continue to aggravate every Member of Congress and their constituents.
Funds for food stamps under the Supplemental Nutrition Assistance Program (SNAP) will start to dry up and be cut off beginning November 1.
Head Start programs serving 65,000 children are expected to start closing if the shutdown extends beyond November 1.
1.4 million federal employees missed their first full paycheck last week.
The American Federation of Government Employees (AFGE) broke with Democrats and called for a clean continuing resolution (CR) this week.
These are new milestones that have negative impacts on Americans across the country and may start to spur action. It is unlikely that any deals will be made before the November 4, 2025, elections (more on Tuesday's elections below). The hope on Capitol Hill is that the pain of the shutdown forces negotiations and breakthroughs will happen late next week. The longest shut down in history was 35 days. This lapse will surpass that record on Wednesday, which may be another milestone worth watching.
The off-ramp appears to be the same now as it was at the start. A group of at least five Democrats will have to accept the promise to negotiate the extension of enhanced premium tax credits as enough to open the government. Perhaps, the parameters of negotiations and tax credit extensions are being made behind the scenes. At this, we do not expect any of the major players to concede, so a deal will likely get done among individual Senators.
Earlier this week, the Centers for Medicare and Medicaid Services (CMS) released a fact sheet touting cost reductions in Affordable Care Act (ACA) marketplace plans under President Trump. We see this as an indication that the President remains focused on overall consumer costs. Look for the President to pressure insurance companies to lower ACA premiums in the exchanges when a deal is made on subsidies.
Trump’s Asia Trip Focuses on Trade
Meanwhile, the President has continued his foreign policy blitz strategy while Congress remains stalled.
One-Year Tariff Reprieve with China Following Meeting.
During his meeting yesterday with Chinese President Xi Jinping, President Trump said the two sides made big strides toward a trade deal. As a result of the progress, the U.S. committed to dropping the current 20% fentanyl tariffs on Chinese goods to 10%. The President said he was able to win the following concessions from China:
China promised to reduce the flow of fentanyl into the U.S.
China pledged to buy “tremendous amounts” of American soybeans. China agreed to buy a minimum 25 million metric tons each year for three years.
China will ease internal export restrictions on rare earth minerals.
China agrees to purchase U.S. oil and gas.
Details have not been released, and we have not seen terms of written agreements or enforcement mechanisms. Some of these promises have been made in the past. However, both sides expressed optimism that these policies could serve as cornerstones for a longer-term agreement.
This detente is supposed to set the stage for a larger deal. Some, however, have expressed concern that it may relieve pressure and delay progress. As we have said previously, a durable, long-term agreement is a key priority for the Trump Administration and as such, the Administration’s calculations on a deal should always be considered separately from their other trade moves.
Other Agreements
President Trump’s week-long trip to Asia has focused largely on trade. The President has signed five trade agreements and frameworks:
South Korea: Earlier this year, President Trump inked a framework with South Korea, and on Wednesday, a formal agreement was announced. The agreement will bring automobile tariffs on South Korea in line with the 15% reciprocal tariff already agreed to in July, while securing billions in exports and investments.
Malaysia: The agreement maintains a 19% reciprocal tariff for Malaysia, while also allowing for significant market access for U.S. exports to the country. Malaysia has also committed to addressing non-tariff barriers, while also working with the U.S. to develop critical minerals and rare earths, with a commitment to refraining from banning their export to the U.S.
Cambodia: Cambodia agreed to remove all tariffs on U.S. exports to the country, while the U.S. will maintain a 19% reciprocal tariff. Cambodia has also committed to addressing non-tariff barriers to trade.
Vietnam: The President secured a framework deal with Vietnam, which will maintain the 20% reciprocal tariff on Vietnam, and secures a commitment from Vietnam to provide preferential market access for nearly all U.S. agricultural and industrial exports. Vietnam also agreed to purchase aircraft and agricultural products from the U.S.
Thailand: Thailand agreed to a framework that would eliminate tariffs on “approximately 99 percent of goods,” while the U.S. maintains a 19% reciprocal tariff. The framework also specifically commits Thailand to addressing barriers to U.S. food and agricultural products. Thailand has also committed to the purchase of agricultural products. President Trump also signed a critical minerals agreement with Thailand.
President Trump also met with Japanese President Takaichi Sanae. Although an agreement was reached with Japan earlier this year, the President participated in a signing ceremony and laid out investments in critical energy infrastructure, artificial intelligence, critical minerals, and manufacturing that were mentioned more broadly in the initial framework.
ICYMI: Mexico trade deadline extended
Amidst the flurry of trade announcements from Asia, the Administration has given Mexico “several more weeks” to reach a trade agreement with the U.S. before higher tariffs are implemented. The original deadline was this weekend.
Election Day Next Tuesday
While known as an “off-year election” where there are few major electoral contests, there are a few some races worth watching next week:.
New Jersey Statewide Elections
New Jersey will vote on November 4 for their next governor. U.S. Representative Mikie Sherrill (D) and former State Representative Jack Ciattarelli (R) are facing off. A Rutgers-Eagleton poll from a week ago shows that both candidates are essentially tied, with Sherrill’s five-point lead within the margin of error. Other polls show that the race is even tighter.
Ciattarelli lost to current Governor Phil Murphy (D) in 2021, and the state went for Kamala Harris (D) in the 2024 presidential election (and Biden in the 2020 presidential election). However, Harris won by a lower margin than Biden. While the state has voted blue in presidential elections over the last 30 years, the state elected Republican Governor Chris Christie 10 years over a decade ago and could be poised to elect another Republican next week.
Other statewide race: Lieutenant Governor
Virginia Statewide Elections
Current Governor Glenn Youngkin (R) is term-limited, and Virginians will head to the polls on Tuesday to elect their new governor. Former Representative Abigail Spanberger (D) is running against current Lieutenant Governor Winsome Earle-Sears (R).
Virginia has gradually turned more purple at the federal level over the last decade or so, voting blue in presidential elections since 2008, including most recently going for Harris in 2024. However, gubernatorial and state elections have been a bit less predictable.
Recent polling suggests Spanberger is favored to win, with a recent Christopher Newport University Poll showing a seven-point lead. Another poll, conducted by George Mason University, had Spanberger leading by 12.
Other statewide races: Lieutenant Governor, Attorney General
California Redistricting Effort
One of the most closely watched elections next week will be the vote on Proposition 50, which will provide for mid-decade congressional redistricting in the state. In California, redistricting is led by a bipartisan commission that redraws the congressional map every decade. California is seeking to circumvent this process by asking voters to pass a constitutional amendment that would bypass the commission until 2031 and instead use maps drawn by the legislature, giving congressional Democrats an extra five seats in the U.S. House.
Recent polling shows the majority of Californians support the move. An Emerson College poll released earlier this week showed 57% of respondents would support Prop 50, up from 51% last month.
What to Watch Next Week
The U.S. Supreme Court will hear oral arguments in the case exploring the legality of tariffs implemented under International Emergency Economic Powers Act of 1977 (IEEPA). A group of 36 U.S. Senators and 171 U.S. Representatives sent an amicus brief to the Court this week opposing the tariffs. Senator Lisa Murkowski (R-AK) was the only Republican to sign.
Election Day.
Next week could be a critical week in the ongoing shutdown drama with a number of pressure points coming after November 1.
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