As California becomes worlds 4th largest economy, it's residents still worry

This week California took Japan's spot as the worlds 4th largest economy, as it's GDP reached $4.1 trillion. Governor Newsom praised his states economy, while warning about the possible negative effects of Trumps tarrifs on their growing economy. However, Californian's have gripes with more than just national policy, as many still grapple with the effects of the wildfires- and the possibility that they will hit again. 

When the February fires hit, one of the big concerns was the ability for insurance companies to pay out that much damage. This led some to suggest novel economic ideas like insurance companies needing their own insurance- and others to look to more preventative measures. Since then, however, there has not been much progress in either directions and according to a new survey from the Stanford Institute for Economic Policy Research, Californians are still worried. Residents are more likely to blame insurance companies and the government for the problems in housing insurance, and are upset over the inability of these groups to limit risk. 56% say they support subsidies for home owners to help mitigate this risk, but only 41% are willing to pay more taxes to achieve this. It seems little progress has been made politically or elsewhere to broker a solution to this increasingly frequent problem.

Sources: https://www.cnn.com/2025/04/25/business/california-japan-economy-tariffs-intl-hnk/index.html 

https://siepr.stanford.edu/news/siepr-survey-californians-weigh-home-insurance-crisis-economic-outlook

 

Alphabet jumps 3% as search, advertising units show resilient growth:

Alphabet’s first-quarter report on April 25, 2025 sent the stock up roughly 3 percent after the company topped Wall Street expectations and demonstrated that its core search and advertising engines remain robust even amid AI-driven competition and tariff uncertainty. Revenue grew 12 percent year-over-year to $90.23 billion (vs. $89.12 billion expected), while diluted EPS jumped to $2.81, lifting net income 46 percent to $34.54 billion. Advertising sales climbed 8.5 percent to $66.89 billion, with “Search and other” up 9.8 percent to $50.7 billion and YouTube bringing in $8.93 billion, just shy of forecasts. Management noted that eliminating the U.S. de minimis import exemption in May could create a modest headwind for Asia-Pacific ad spending, but said it is too early to gauge the broader impact of new tariffs. Meanwhile, Google’s AI Overviews feature has expanded to 1.5 billion monthly users, and analysts argue the market is still underestimating the monetization potential of this tool and AI-related cloud demand. Overall, the results reassured investors that Alphabet’s legacy businesses are holding up while its aggressive generative-AI rollout opens new growth runways.

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Trump versus Education (Redux: Public Schools)

    Three Federal Judges have blocked Presidents Trump's attempt to stop schools with D.E.I programing from recieveing funding, calling it an overstep, and pointing to a lack of clear definition as to what D.E.I programs meant. The attempt- which was through a Dear College letter suggesting K-12 schools would have to go through a certification program to make sure D.E.I was eliminated- is another action in a long list of efforts by the administration to fight Diveristy Equity and Inclusion programs through withholding funds, which the courts are continuing to fight. These cuts would likely affect programs like Title 1 which help the most underprivledged youth in the system, and hurt many districts budgets severely. The judges who ruled against it cited issues of free speech being restricted, and worry over what could be lumped in with "Diversity Equity Inclusion". Federal Judge Landya McCafferty was the first to issue an injunction, and is an Obama appointee, however the two other judges were appointees under President Trump. Many have filed lawsuits against Trump's letter, including the NCAAP and the National Education Association. It remains to be seen whether it will be possible for Trump to use this tactics in the future, considering similar lawsuits on the collegiate level from Harvard, and the Supreme Courts lack of capitulation to Trump.

Sources: https://thehill.com/homenews/education/5265780-judge-trump-dei-public-schools-k-12-colleges-mcmahon/

https://www.nytimes.com/2025/04/24/us/trump-public-school-funds-dei.html?campaign_id=190&emc=edit_ufn_20250424&instance_id=153224&nl=from-the-times&regi_id=217822652&segment_id=196657&user_id=4e911fca78fe02d77f9a84a8b21d7c45

Japan weighs using U.S. rice imports as tariff negotiation tool with Trump

 Japan is considering increasing imports of U.S. rice as a strategic move in trade negotiations with former President Donald Trump, should he return to office. Currently, Japan imports about 770,000 metric tons of rice annually tariff-free under a WTO agreement, with the U.S. accounting for nearly half. Trump previously criticized Japan’s rice tariffs, often citing inflated figures. To ease tensions, Japan may propose a new import quota of 70,000 tons of U.S. rice—a measure previously included in the abandoned TPP and postponed in the 2019 U.S.-Japan trade deal. However, the idea is politically sensitive, as domestic rice farmers strongly support the ruling party. Additionally, rice prices in Japan remain high, raising concerns about food security and dependence on foreign imports.

https://www.japantimes.co.jp/business/2025/04/23/economy/rice-minimum-access/

Trump's Battle vs. Fed Powell

President Trump has increased his criticism of Federal Reserve Chair Jerome Powell, calling for immediate interest rate cuts but stating he has “no intention” of firing Powell. Legally, it’s highly uncertain whether Trump could actually remove Powell from office. The Federal Reserve Act allows a president to remove Fed board members only “for cause,” which is generally understood to mean serious misconduct, not policy disagreements. There’s no clear legal precedent for firing a Fed chair over differences in economic policy, and such a move would almost certainly trigger a lengthy court battle, possibly reaching the Supreme Court. Powell and most legal experts maintain that the Fed’s independence is a crucial safeguard for the economy, and undermining it could destabilize financial markets.

If the Fed were to cut interest rates as Trump wants, borrowing would become cheaper for consumers and businesses, encouraging spending on homes, cars, and investments. This could help boost economic growth and support jobs. However, lower rates also mean savers earn less interest, and if the economy is already facing inflation risks, rate cuts could make price increases worse. Trump’s new tariffs complicate the picture even further: tariffs raise the cost of imported goods, pushing up inflation while also potentially slowing economic growth. This puts the Fed in a tough spot, forced to balance the risk of higher inflation from tariffs against the need to support the economy, making decisions about rate cuts even more difficult and politically charged.

Read the article here: https://www.nytimes.com/2025/04/23/us/politics/trump-jerome-powell-fed.html

Tesla Tumbles as Musk Returns

    During a Tesla earnings call on April 22nd Elon Musk made it clear that once May arrives he will be taking a step back from his role in the Department of Government Efficiency (DOGE). Musk told investors that his goal is to be "doing DOGE things" only 1-2 days a week. He will be stepping back from his highly controversial role in the administration to focus back on his own business ventures, such as Tesla, which has seen massive hits to their profits and sales ever since President Trump came into office. 

    Many are saying that his role in DOGE is a large reason that Tesla has not been so successful, Musk made clear that regardless of how his business is doing people need to look into the far future. While Tesla is less prone to tariffs when compared to their automotive competitors due to having lots of factories in the United States they are still struggling. In April, Tesla reported that it had suffered the largest drop in sales in their history delivering 50,000 fewer vehicles in Q1 of 2025 than Q1 of 2024. This is also being seen in Tesla stock. After election day their stock nearly doubled, reaching an all time high in December, with investors believing in the Trump administration possibly implementing Tesla-friendly policies. At this point, Tesla stock (TSLA) has fallen nearly 50% from that high as of April 23rd. 

    This negative performance by Tesla does not seem to have much to do with their actual operations, but instead the man who is behind it all. There have been numerous protests being directed in both Trump and Musk's way that are completely against everything they have done so far. Many people are starting to not buy Tesla's products due to Musk being the face of the company. It will be interesting to see how this will impact Tesla's long-term gains and whether these losses will keep happening with the role Musk has played in DOGE so far.

Link to Article: https://www.cnn.com/2025/04/22/business/tesla-reports-disappoint-drop-in-revenue-and-profits/index.html 

Vietnam at a Crossroads: Responding to the 2025 U.S. Tariff Shock with Strategic Resilience

Trade wars have become an important way to change global business. The U.S.-China tariff disputes are now affecting Vietnam, with a 46% tariff on Vietnamese exports. This move, meant to fix trade imbalances, is a big challenge for Vietnam’s economy, which relies on exports. However, this tariff shock also offers a chance for Vietnam to rethink its strategy.

The 46% tariff targets sectors that make up more than 80% of Vietnam’s exports to the U.S., including electronics, textiles, footwear, furniture, and agriculture. Vietnam’s $70.5 billion in electronics exports face higher costs, which could hurt investment and jobs. The $46.2 billion textiles and footwear sectors could see factory closures and job losses, especially for low-income workers and women. As the top exporter of wood furniture, the $28.3 billion furniture industry may face disruptions. Agricultural exports, like coffee and cashews worth $8.5 billion, could become less competitive in the U.S.

Instead of retaliating, Vietnam has taken a calm approach, focusing on legal methods and working with other countries. Decree 73/2025/NĐ-CP was introduced to improve trade by lowering import taxes on U.S. goods, showing Vietnam’s commitment to fair trade. The country is also using trade agreements like CPTPP, EVFTA, and RCEP, focusing on cooperation instead of conflict.

Vietnam now has two paths to choose from: defending its market share in the competitive U.S. market (Red Ocean) or creating new, high-value industries (Blue Ocean). In the Red Ocean, Vietnam is negotiating for tariff relief, offering tax cuts to exporters, and trying to protect its current markets. In the Blue Ocean, it’s working to upgrade its manufacturing, focusing on high-value sectors like semiconductors, renewable energy, and digital technology.

The 2025 U.S. tariff shock is more than just a trade issue—it’s a key moment for Vietnam’s economy. While the country has grown by relying on exports, this challenge provides an opportunity to diversify and become less dependent on global market changes. By using both defensive and innovative strategies, Vietnam can handle the situation and come out stronger, becoming a leader in the global economy.

https://moderndiplomacy.eu/2025/04/15/vietnam-at-a-crossroads-responding-to-the-2025-u-s-tariff-shock-with-strategic-resilience/?utm_source=chatgpt.com

Defense Against the Dark Arts

Amidst the promises from the Trump administration to commence legal, financial and political attacks on academic institutions of all levels, schools in the Big 10 decided they needed to take proactive measures. The faculty senate at Rutgers University in New Jersey began the initiative and since all 18 schools have joined. The alliance serves as an agreement for all the schools to band together if President Trump were to single out any of the institutions in any manner. Schools are set to provide legal counsel, public affair officials, and create a fund that will be used to provide "immediate and strategic support" (Rutgers Official). 

Trump's War on Regulations

 The Trump administration seems hellbent on de-regulating as much as possible. Some of the regulations that he wants to roll back are ones that help his voter base. An example of this would be eliminating regulations that protect coal miners heath from the dangerous fumes that they are exposed to daily. Despite constant warnings from health officials and academics, the Trump administration continues to move forward. We have learned in class that government regulation is used in capitalism to help address market failures. Seeing such a basic misunderstanding of economics at the highest level of government is incredibly disappointing. 

Source:

https://drive.google.com/file/d/1qaJo7iX8ItPmay52k7w1lf-c2WhygHv6/view

Deportations Down in Texas: What the Supreme Court is Doing About It

 This Saturday the Supreme Court blocked any deportations of any Venezuelans held in northern Texas under an18th century wartime law. They decided to direct the Trump administration not to remove anyone held in the detention center until further notice. The high court decided to act in an emergency appeal from the American Civil Liberties Union because it appeared that immigration authorities were moving to restart removals under the Alien Enemies Act of 1798. They had said earlier that deportations could proceed only if those about to be removed had a chance to argue their case in court and were also given enough time to contest their pending removal. Lawyer, Lee Gelernt, was relieved that this act was temporarily blocked saying that these individuals were in imminent danger of spending the rest of their lives in a brutal Salvadoran prison without having had any due process. After two federal judges refused to step in as lawyers for the men, a desperate legal campaign was launched to prevent their deportation. Additionally, the ACLU has already sued to block deportations of two Venezuelans held in the Bluebonnet facility and sought an order which demands removal of any immigrants in the region under the Alien Enemies Act.  This act has only been used three other times in U.S. history. World War II was the most recent which held Japanese-American civilians in internment camps. As the men were being accused of being members of the Tren de Aragua gang, the Trump's administration contended that the act gave them power to swiftly remove immigrants they identified as members of the gang. Reading about this situation, is a little confusing because there are so many sides and each one has their own reasons as to why they think they are right. I think it will be interesting to see how it is handled, and especially how this will set the tone for the next four years in regard to immigration and boarder control.

For more information on the Subject go to: Supreme Courts blocks, for now, new deportations under Alien Enemies Act