New Congress Begins Jan. 3; Focus on House Speaker Election

— Court orders Biden administration to halt sale of border wall materials. A federal court has ordered the Biden administration to stop selling border wall construction materials, a decision that comes as President-elect Donald Trump prepares to take office. The administration had been selling unused materials at low prices after halting wall construction, following authorization by Congress to dispose of the materials through the National Defense Authorization Act.

Texas Attorney General Ken Paxton confirmed that the administration will comply with the order, halting all material disposals for 30 days. Paxton declared the ruling a victory, stating, “We have successfully blocked the Biden Administration from disposing of any further border wall materials before President Trump takes office.”

The move aligns with Trump’s immigration agenda, with Texas pledging to support his efforts to complete the wall along the southern border. Trump previously criticized the Biden administration’s actions, calling the sale of materials “almost a criminal act,” citing potential cost burdens for rebuilding.

— Trump aligns with tech leaders on H-1B visa program, sparking debate within MAGA coalition. President-elect Donald Trump expressed strong support for the H-1B visa program, calling it “a great program” in a recent New York Post interview (link). His stance aligns him with tech leaders like Elon Musk and Vivek Ramaswamy, who argue the visas are critical for maintaining U.S. competitiveness by attracting top global talent. Musk, co-leader of Trump’s proposed Department of Government Efficiency (DOGE), and Ramaswamy have both defended the program’s role in bolstering industries like tech and innovation.

This position marks a notable shift for Trump, who previously criticized the H-1B program during his first term, signing an executive order to restrict access and imposing higher wage requirements to discourage its use. The current pro-H-1B stance, however, has exposed divisions within Trump’s MAGA coalition. While tech advocates champion the program, critics within the base argue it undermines American workers and contradicts the “America First” agenda.

The debate has escalated into public spats, with Musk threatening to “go to war” over the issue and former Trump adviser Steve Bannon deriding Musk as a “toddler.” As the president-elect prepares to take office, how he reconciles the demands of the tech industry with the concerns of his core supporters remains uncertain. His recent comments suggest a potential policy shift, but the implications for American jobs and immigration remain to be seen.

— New year, new voices: Fed policy committee gains four new voters. As the Federal Reserve navigates the final stages of its inflation fight, the 2025 Federal Open Market Committee (FOMC) lineup introduces four new voting members who could influence monetary policy in a more hawkish direction. Joining the committee are Boston’s Susan Collins, Chicago’s Austan Goolsbee, St. Louis’ Alberto Musalem, and Kansas City’s Jeffrey Schmid.

Goolsbee, known for his dovish stance, contrasts with Musalem and Schmid, who have voiced caution about rate cuts, signaling a nuanced debate ahead, according to a Barron’s account (link). The new composition reflects diverse expertise, from academia to banking, and sets the stage for a potentially pivotal year in monetary policymaking.

Chair Jerome Powell remains pragmatic about dissenting votes, emphasizing collective decision-making. The FOMC’s recent projections suggest modest rate reductions in 2025, but with significant variability among officials.

— Canada and Trump’s nominees meet to address tariff threats. On Friday (Dec. 28), Canadian Finance Minister Dominic LeBlanc and Foreign Minister Mélanie Joly met with President-elect Donald Trump’s nominees Howard Lutnick (Commerce Secretary) and Doug Burgum (Interior Secretary) at Mar-a-Lago. The meeting aimed to address Trump’s proposed 25% tariffs on Canadian goods and his concerns about border security and trade deficits. Key discussion points:
· Border security: Canada presented a billion-dollar plan to bolster security at the U.S./Canada border.
· Fentanyl trafficking: The ministers stressed Canada’s commitment to combating the drug crisis and saving lives in both nations.
· Illegal migration: They responded to U.S. concerns about migrant flows, highlighting comparative data.

Trump’s tariff threats stem from claims of inadequate action by Canada on fentanyl and migration issues. However, data shows that fentanyl seizures (43 pounds) and migrant encounters (23,721) at the Canadian border are significantly lower than those at the Mexican border.

Economic stakes:
· $3.6 billion CAD ($2.7 billion) worth of daily trade.
· Canada is the top export destination for 36 U.S. states.
· The U.S. is Canada’s largest agricultural trading partner, buying just over 59% of Canadian agricultural exports
· A $75 billion U.S. trade deficit with Canada, largely driven by energy exports.
· Canada is the world’s third-largest exporter of fertilizers, with U.S.being its largest market. Key fertilizer products:
o Potash: Canada is the world’s leading producer and exporter of potash, accounting for 52% of global potash reserves.
o Nitrogen-based fertilizers: Canada also exports significant amounts of nitrogen-based fertilizers to the U.S., including:
o Ammonia: 959,000 metric tonnes
o Urea: 535,000 metric tonnes
o Urea ammonium nitrate: 426,000 metric tonnes
o Ammonium sulphate: 215,000 metric tonnes

Bottom line: While described as “positive” and “productive,” the talks yielded no guarantees on lifting the tariff threat. Follow-up discussions are planned, including a dinner between Joly and U.S. Sen. Lindsey Graham (R-S.C.). Canada continues to emphasize the mutual harm tariffs would cause and seeks to preserve strong bilateral ties.

— Donald Trump and JD Vance will be further apart in age than any president-vice president pair in U.S. history – by almost a decade. They have an age gap of 38.1 years; the largest gap was previously 29.7 years, between President James Buchanan and Vice President John Breckinridge, notes Pew Research Center (link).

— Trump’s vision for U.S. expansion: Panama, Greenland, and Canada in focus. President-elect Donald Trump has sparked widespread attention with controversial remarks about expanding U.S. influence, including taking over the Panama Canal, purchasing Greenland, and even integrating Canada as a U.S. state. While some view these comments as provocative trolling, others see underlying strategic aims tied to national security and economic dominance.

The Panama Canal and China’s influence. Trump’s criticism of the Panama Canal’s management stems from concerns over Chinese investments and control of key Panamanian ports. Arguing that the U.S. is being “ripped off,” Trump hinted at asserting American control to curb China’s growing influence in the Western Hemisphere. (Link to WSJ commentary on the Panama Canal issue.)

Greenland as a strategic asset. Revisiting his 2019 interest in purchasing Greenland, Trump emphasized the island’s importance in countering Russian and Chinese activities in the Arctic. The resource-rich territory, owned by Denmark, remains a geopolitical hotspot as melting ice opens critical shipping routes.

Canada as the 51st state? Trump’s remarks about Canada, including calling Prime Minister Justin Trudeau a “governor” and suggesting tariffs, have triggered sharp responses. Canadian leaders like Ontario Premier Doug Ford threatened to retaliate by cutting energy supplies if tariffs escalate. Despite the rhetoric, a poll revealed only 13% of Canadians are open to joining the U.S.

Strategic or distraction? Critics argue Trump’s focus on these issues might serve as a distraction from domestic challenges, while his supporters see it as an effort to reclaim American dominance. The coming months will test whether these bold declarations translate into actionable policies or remain political theater.

— Opposition push to topple Trudeau government gains momentum. A Canadian parliamentary committee led by Conservative lawmaker John Williamson plans to expedite efforts to defeat Prime Minister Justin Trudeau’s government during the legislative recess. Starting Jan. 7, the Public Accounts Committee will convene to prepare for a potential non-confidence vote in the House of Commons as early as Jan. 30. Trudeau’s minority Liberal government faces mounting pressure following the resignation of former Finance Minister Chrystia Freeland and diminishing support from the New Democratic Party (NDP). Opposition leaders, including NDP’s Jagmeet Singh, have indicated readiness to trigger an election, while Trudeau could opt to prorogue Parliament to block the vote.

—  Second Florida Democratic lawmaker switches to GOP, citing her former party’s lack of unified support for Israel. State Rep. Hillary Cassel (R) said in a Friday statement on the social platform X that she is not making the decision lightly, but she is joining the Republican Party because she believes in its “vision for a better, more prosperous Florida.”

— Key dates in January

1: New Year’s Day (federal gov’t, banks, markets closed)
2: First trading day of 2025
3: New Congress sworn in
3: House speaker election
6: House certification of 2024 presidential election
8: First Social Security benefit checks of the year; cost of living adjustment is 2.5%
10: Bureau of Labor Statistics December employment situation report
10: USDA Annual Summary, WASDE, Crop Production, Grain Stocks, Winter Wheat/Canola Seedings
15: BLS consumer price index report (inflation)
15: Quarterly estimated taxes due
15: Last day to enroll in a 2025 health plan via HealthCare.gov
20: Inauguration Day
20: Martin Luther King Jr. birthday celebrated (federal gov’t, banks, markets closed)
20: College football national championship
26: AFC and NFC football championships
27: (tentative) First day IRS will begin accepting 2024 federal tax returns
28: Florida’s 1st and 6th special primaries
31: Employers and financial institutions should send out W-2 and 1099 tax forms
31: Federal Open Market Committee meets
31: USDA Cattle