Trump's Second Year: Whiplash

President Donald Trump’s first year back in office was defined by sweeping upheaval that was largely plotted out during his four-year Florida exile. But the president has somehow intensified the volatility in year two with a succession of whiplash-inducing policy swings, several of which have almost immediately withered in the face of Republican opposition and public outcry.

The administration this week finally withdrew the thousands of federal law enforcement officers from Minneapolis, after violent and at times deadly clashes with protesters turned the tide of public opinion against the president’s immigration crackdown.

It came after Trump threatened to decertify Canadian aircraft, a move deemed “unjustified and dangerous” by a Washington-based aerospace trade union that the president soon dropped. Trump said in early January that he’dcap credit card rates at 10 percent, a move that would have upended the banking industry, only to change his mind and ask Congress for legislation.

Also last month, Trump’s administration paused millions in Centers for Disease Control and Prevention funding for state public health infrastructure — only to reverse course roughly 24 hours later.

“The whiplash has real implications,” said Chrissie Juliano, executive director of the Big Cities Health Coalition, a forum of the leaders of metropolitan health departments. “It’s incredibly disruptive, even if you can get back to continuing the work, you know, two days later.”

The unpredictability of a presidency that prioritizes posting over process and often leaves friends and foes alike guessing whether pronouncements should be taken seriously, literally, or both, remains a feature, not a bug of Trump’s approach to governance. In many matters, especially negotiations with other countries, his mercurial opacity is often an attempt to gain leverage, but his threats seemingly lead just as often to backtracking as blowing things up, be they Iranian missile depots, Venezuelan drug boats or the transatlantic alliance.

The same often holds true for domestic policy. The president has made numerous pronouncements with emphatic declarations on social media, sometimes even suggesting he is governing by fiat in cases where legislation is required. But he has quickly moved on from many of them: a cap on credit card interest rates, 50-year mortgages and, according to a new Financial Times report, possibly even the sweeping tariffs on aluminum and steel that have led to higher costs.

While some have come to expect out-of-the-box ideas posted at all hours and others even see a certain gutsiness in Trump’s move-fast-and-break-things approach, the effects can be real and devastating for those caught in the crosshairs of an untested idea.

“Even proposals that don’t ultimately move forward have consequences,” said one financial industry insider, who was granted anonymity to speak candidly without fear of blowback from the White House. “Markets react. Issuers reassess risk. When policymakers float price controls, it creates uncertainty that can translate into tighter underwriting and reduced access — particularly for higher-risk or lower-income consumers.”

Some in the financial industry have grown accustomed, after five years of Trump, to the volatility of a trial balloon taking off with little warning. It's become accepted as the cost of doing business in Trump's remade Washington.

Avery Jaffe, a public affairs strategist who has advised players in the financial sector, summed it up by quoting James Brown. "Paid the cost to be the boss," he said.

The public, increasingly, appears less comfortable with the whiplash.

Trump’s overall approval rating sits at 40 percent, according to the New York Times daily average of polls. His disapproval is at 56 percent.

“He is currently at his lowest point in the second term. There’s a sense that this is a pretty chaotic administration and seems to remind people of the pandemic period in the first term,” said Whit Ayres, a Republican pollster in Washington who noted that, historically, presidential approval ratings have been predictive of midterm results. “When it’s above 50 percent, the party loses seats but not that many. When the president’s job approval is below, the average loss of seats is 32.”

On Monday, the White House looked to turn the page on a few days of difficult headlines by blasting out bullet points about its accomplishments, urging people not to lose focus on successful efforts to halt illegal immigration at the southern border and a stock market where the Dow Jones Industrial Average had just surged past 50,000 for the first time. “Don’t be a Panican. We’re Winning — and We’re Not Slowing Down,” the headline blared.

“President Trump pledged to smash Washington, D.C.’s broken status quo, with prior administrations moving at glacial speed and failing to deliver for the American people,” said White House spokesman Kush Desai. “The Trump administration, on the other hand, has operated at lightning speed over the past year to clean up the Biden economic disaster and enact President Trump’s campaign promises.”

But the reversals have a way of capturing bigger headlines.

At the start of last week, Trump threatened to halt the opening of a new bridge between Detroit and Windsor, Ontario, in a further move against Canada – only to seemingly drop it.

It came after Trump backed off one of his biggest foreign policy moves of the year: His gambit to seize Greenland from NATO ally Denmark, which prompted strong European resistance.

Last April on what he called “Liberation Day,” Trump imposed higher tariffs on nearly every country despite warnings from Wall Street. But he quickly backtracked, lowering them within days following tremors in global bond markets.

The markets have generally rebounded, reassured that Wall Street can serve as one of the few remaining checks on Trump’s impulsiveness. But in other sectors, and across a federal government that’s been hollowed out to some degree after the president’s DOGE efforts early last year, the wild policy swings have tested the patience of Wall Street bigwigs.

In early January, Trump went to Truth Social late on a Friday evening to call for a 10 percent cap on credit card interest rates — a prospect reviled by Wall Street and Republicans in Congress.

Bank stocks opened the following Monday in a slump, and Wall Street executives were uncharacteristically quick to push back. JPMorgan Chase CFO Jeremy Barnum said the proposal would be “very negative for consumers”, while Citigroup CFO Mark Mason warned that the restriction would result in a “significant slowdown on the economy.”

A second financial industry officer, also granted anonymity to speak freely, said the policy undermined the fundamental principles of the credit market and that the president’s post alone caused consumer confusion about whether card holders had to pay their bills in full.

While the administration rhetorically doubled down — Treasury Secretary Scott Bessent said the banks have done “very well” and could afford to take the hit in comments to Congress last week — there has not been much to show for it, and few efforts appear to be underway.

Also last month, Federal Housing Director Bill Pulte signaled that the administration was moving past his widely criticized idea for 50-year mortgages in its broader effort to address housing affordability. The proposal, which Pulte came up with and sold to Trump in a short presentation with visual aides that the president almost immediately posted on social media, drew major backlash from business leaders and conservative political allies.

Meanwhile, the Department of Health and Human Services in January notified thousands of organizations across the country that discretionary grants from the Substance Abuse and Mental Health Services Administration were being yanked. They included youth overdose prevention and medication-assisted treatment for substance use disorder, among other things. It’s unclear exactly how much of that was paused, as much of the money had already been spent. But the agency backtracked under pressure from Democrats and others, restoring the grants.

The first notice said that the pause was so the administration could review the Public Health Infrastructure Grants “to ensure alignment with administration and agency priorities.”

But it’s unclear why the pause was reversed so quickly, and whether the administration was able to complete its review in such a short time period.

The grants were “temporarily paused so HHS could implement a new review process, one that will ensure funds are used for their intended purposes and in alignment with agency priorities,” an HHS spokesperson said.

But Ayres, the GOP pollster, said that Trump’s approval numbers largely mirror those from his first term, when the public over four years grew exhausted by constant controversy and chaos.

“Joe Biden’s fundamental message in 2020 was to restore normalcy,” Ayres said. “And that seemed to be persuasive to enough people to get him elected.”

Dan Goldberg and Victoria Guida contributed to this report.