Daily News Brief

February 4, 2025

Good morning, and welcome back to CFR’s Daily News Brief. Today we’re covering the whiplash surrounding Trump’s tariff orders, as well as...

• Israeli Prime Minister Benjamin Netanyahu’s White House visit
• A rebel pledge to halt fighting in eastern Congo
• El Salvador’s offer to hold deported migrants

This morning, we are also rolling out an update to our flagship newsletter. We welcome your feedback here.

Top of the Agenda

U.S. President Donald Trump struck eleventh-hour agreements yesterday to pause sweeping tariffs on two top U.S. trade partners. Markets and foreign leaders are recalibrating after Trump issued a month-long postponement of his 25 percent tariffs on Canadian and Mexican goods and 10 percent tariffs on Canadian energy. The levies were slated for today. China announced limited new tariffs in response to 10 percent U.S. duties on its goods that took effect at midnight—but the Chinese measures are due February 10, and Trump suggested openness to a similar deal with Beijing.

The split screen. After Trump announced the tariffs on Saturday—threatening a trade war unless the countries did more to address the flow of migrants and fentanyl into the United States—Canada, China, and Mexico responded with slightly divergent tactics. Canadian Prime Minister Justin Trudeau escalated with a list of retaliatory tariffs, while Mexican and Chinese officials stalled in announcing countermeasures. 

Both Mexican President Claudia Sheinbaum and Trudeau then held phone calls with Trump yesterday. Afterward, they announced steps to address his border concerns. 

• Mexico will send ten thousand additional security officers to its northern border, Sheinbaum said. 
• Canada will send around the same number of new officers and name a fentanyl czar, according to Trudeau. 
• China this morning said it would increase tariffs 10 to 15 percent on certain U.S. energy products and farm equipment as well as open an antitrust probe into Google. Citi analysts calculated Beijing’s retaliation covered the equivalent of less than 10 percent of U.S. exports to China in 2023.  

Pre-tariff tremors. Before yesterday’s deals were reached, markets, businesses, and local officials foreshadowed the consequences of tariff brinkmanship. U.S. stock futures fell and some firms warned they would pass costs on to consumers. In Canada, the premier of Ontario said the province would cancel a contract with Elon Musk’s firm Starlink and bar U.S. firms from government contracts. He walked back those plans late yesterday.

The United States has seldom in history used tariffs for such varied policy goals, and analysts said that Trump’s threats shook the assumption of an integrated North American market. 

What comes next. Canada and Mexico have pledged efforts to keep tariffs off the table after the thirty-day pause. The U.S. and Chinese presidents are due to speak as soon as this week, a Trump spokesperson said. Meanwhile, Trump has vowed that Europe, too, will soon be a tariff target. European leaders pledged unity at a meeting in Brussels yesterday: “If we are attacked in terms of trade, Europe—as a true power—will have to stand up for itself,” French President Emmanuel Macron said.

Trump and his allies have argued that his unpredictability can be a strength. But in the trade realm, its risks were on display this week.

Ending the War in Ukraine

CFR experts outline various recommendations for the Donald Trump administration to secure Ukraine’s future.

Bibi’s White House visit. Netanyahu today will become the first foreign leader of Trump’s second term to visit the White House. The pair will discuss the next phase of the Gaza cease-fire and hostage release deal. Trump has said he hopes to end the war, but some in Netanyahu’s coalition have pushed for it to continue. The leaders are also expected to weigh Israel’s strategy toward Iran and Saudi Arabia.

Truce pledge by Congo rebels. Rwanda-backed M23 fighters who recently took over the Democratic Republic of Congo city of Goma declared a unilateral cease-fire in the area beginning today. They cited humanitarian needs. Last week’s fighting killed more than nine hundred people, UN health officials said. The Congolese army, which has been fighting the rebels, did not immediately say if it would also observe a truce.

Putin’s pushback on peace talks. After Ukrainian President Volodymyr Zelenskyy this weekend floated the idea of four-way peace talks—between the United States, the European Union, Russia, and Ukraine—a Kremlin spokesperson yesterday said Zelenskyy “does not have the right to hold such talks.” Moscow has said the fact that Zelenskyy was not elected after his term expired last year amid martial law means he cannot legally sign a peace deal; Kyiv rejects that stance. Separately, a UN mission reported an “alarming rise” in Russian executions of Ukrainian war prisoners in recent months. 

A new U.S. fund. Trump yesterday ordered his officials to create a sovereign wealth fund and said it could be used to facilitate the sale of TikTok. The fund will be created over the next year, Treasury Secretary Scott Bessent said. It was not immediately clear where its financing would come from; Trump has suggested in the past that tariff revenue could fund it.

El Salvador offer on detainees. El Salvador’s government yesterday offered to hold deported migrants of any nationality as well as U.S. citizens convicted of crimes in its detention facilities. President Nayib Bukele made the proposal during a visit by U.S. Secretary of State Marco Rubio. The United States cannot legally deport its citizens to El Salvador; an unnamed U.S. official told reporters that the Trump administration was not currently planning to do so but called Bukele’s offer significant.   

Kabul UN compound targeted. The United Nations and the Taliban announced separate investigations into a Taliban member’s gunfire on the UN compound Sunday in Kabul, Afghanistan. A security guard was injured in the incident, and the Taliban fighter was later found dead. A Taliban spokesperson said yesterday there had been a “one-way misunderstanding” but did not provide further details.

China’s dwindling Japanese population. The number of Japanese nationals who live in China hit a twenty-year low of 97,538 as of last October, new statistics show. The group had surged after China entered the World Trade Organization in 2001 but has fallen in more recent years amid political tensions. Though the countries have explored a slight rapprochement in recent months, many Japanese firms remain hesitant about operating in China, an October Nikkei/Japan Center for Economic Research poll found.

What the Cease-Fire Means

CFR’s Steven A. Cook and James M. Lindsay sit down to discuss the Israel-Hamas cease-fire. Listen to the podcast here.

• U.S. Secretary of State Marco Rubio continues his Central America and Caribbean tour in Costa Rica and Guatemala. 

   

• A Senate committee is expected to vote on Tulsi Gabbard’s nomination as director of national intelligence.

   

• Pakistan’s president begins a five-day state visit to China. 

What’s the problem with a TikTok ban?

U.S. officials should declassify information about why TikTok is a national security threat—or risk huge public backlash and a global loss of stature as a free speech champion, argues CFR expert Kat Duffy.

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