Washington, DC

1. Tariff battles escalate
2. Shutdown gets more visible
3. Trump mulls Iran strikes
4. Mexico drug boss killed
5. Trump Accounts questions
6. Housing pitch divides Dems
7. The bad ideas of 2026

PDB: Global confidence in banks recovers post-financial crisis

Trump to honor Laken Riley … EU foreign ministers gather in Brussels … More than 5,000 flights cancelled as blizzard hits east coast

Tariff fight burns on in Washington

The Supreme Court stopped President Donald Trump from imposing his tariffs under an economic emergency declaration. But the ongoing fight in the Republican Party over free trade — and the president’s unilateral power on tariffs — isn’t going anywhere as Congress returns this week. We already know plenty of Republicans didn’t like those tariffs, but expect to hear more from senators like Bernie Moreno of Ohio, who want Congress to codify the scuttled levies. Trump invoked Section 122 to impose a 15% tariff on all imports on Saturday, starting a 150-day clock until Congress must vote to extend. The Treasury Department estimates the administration’s alternative use of Sections 122, 232, and 301 “will result in virtually unchanged tariff revenue in 2026,” Treasury Secretary Scott Bessent said. He told CNN the administration would wait to issue tariff refunds until the Court of International Trade weighs in.

 — Burgess Everett and Eleanor Mueller

Shutdown effects spread; no end in sight

The shutdown of the Department of Homeland Security is now in its 10th day. And with the snowstorm on the East Coast, there will be no Senate or House votes until Tuesday. That’s not the reason the shutdown stretches on. Instead, it’s a stalemate in negotiations over immigration enforcement changes. Currently, we’re not hearing much optimism. Meanwhile, the shutdown is getting more noticeable. The Trump administration suspended the Global Entry program for travelers returning to the US, though the domestic TSA Precheck program is still in operation, after an initial announcement that it would be suspended. The last lengthy partial government shutdown ended in part due to public pressure as the effects on travelers mounted. But this one stems from Democrats’ opposition to Trump’s immigration enforcement policies — and it’s hard to see it ending over effects on the public alone.

— Burgess Everett

Trump mulls Iran strike as talks planned

Trump is weighing a strike on Iran, with the two sides appearing no closer to a nuclear deal. Talks will continue this week, with the Iranian foreign minister saying he’ll likely meet special envoy Steve Witkoff in Geneva on Thursday. “I believe that still, there is a good chance to have a diplomatic solution,” Iran’s foreign minister told CBS. But there’s a lot left to resolve. Trump has openly called for no enrichment; meanwhile, Axios reported Trump could be open to a “token” nuclear enrichment proposal in which Tehran has no path to a bomb. Military strikes — and potentially a larger attack later, The New York Times reported — remain on the table, particularly as Trump grows “curious” why the country hasn’t “capitulated” to his demands, as Witkoff put it. Western security officials are worried about retaliatory terror attacks, the Times also reported.

— Shelby Talcott

Mexico kills drug boss amid Trump pressure

Trump’s pressure campaign against Mexico to do more to crack down on cartels is bearing fruit. The Mexican government announced Sunday that federal forces had killed Nemesio Oseguera Cervantes, or “El Mencho” — bringing down the country’s most powerful cartel boss, responsible for trafficking loads of fentanyl, cocaine, and other drugs into the US. The US government had designated the Oseguera-led Jalisco New Generation Cartel as a terrorist organization and posted a $15 million reward for information leading to its leader’s capture. The news, while it prompted a shelter-in-place order for US citizens, is also likely to ease tensions between the Mexican government and Trump, who had threatened strikes against cartel groups. It hands him a possible line for his State of the Union, too — while US forces were not involved in the operation, the US did provide intelligence to aid the Mexican government.

Firms look to SOTU on Trump Accounts

Financial firms hope Trump’s State of the Union address will provide more insight into his plans for Trump Accounts. Administration officials have made the children’s savings tool from the megabill a key part of their affordability pitch. But questions remain over which firms will stand up the accounts and how others will be able to roll them over to their own platforms. House Financial Services Chair French Hill, R-Ark., told Semafor he hopes they’ll eventually “operate like you see in other consumer investment savings products like the 529 plan,” which can be accessed several ways. For now, the sector is “just champing at the bit for any breadcrumbs of information they want to drop,” Mindset’s Kendra Isaacson said. There are signs of progress behind the scenes: The Treasury Department sent two related rules to the Office of Management and Budget on Feb. 11.

— Eleanor Mueller

Dems split over housing investment curbs

As the White House circulates a plan to shut institutional investors out of single-family housing, Sen. Elizabeth Warren, D-Mass., and other Democrats are drafting their own related legislation — including measures that would go further by targeting tax breaks, a person familiar with the plan told Semafor. But some within the party are skeptical that any iteration of the policy would do more than deliver Trump a win: “Who thinks the most dangerous, corrupt president in history deserves a hand in making problems worse?” one Democratic strategist told Semafor. Even the White House’s narrower proposal will be a tough sell for congressional Republicans, many of whom prefer bipartisan legislation that could get a Senate vote as soon as this week. Investors who own more than 100 single-family homes control less than 1% of the market nationally, the American Enterprise Institute’s Edward Pinto said.

— Eleanor Mueller

This year in bad ideas

The cynical journalists in Davos like to say that there’s a consensus formed there every year — and every year it’s wrong. But this January, even the cynics came rolling out of the World Economic Forum in the Swiss mountains wide-eyed at Canadian Prime Minister Mark Carney’s declaration of a global “rupture,” splashing him across front pages. It was the first of a few big, provocative, viral ideas to captivate the chattering classes in 2026; others revolve around the Epstein files and the artificial intelligence boom. These highbrow memes are useful political tools, particularly for Trump’s energized enemies. There’s no requirement, however, that they make sense. So I thought I would raise a few questions about these big ideas, before you get too comfortable with them.

As China quietly reshapes the world, its influence ripples through every corner — from the flow of global trade and the race for innovation, to the government decisions and shareholder meetings that touch daily life around the globe. Launching soon, Semafor China will unpack how China is influencing technology, markets, and energy. Don’t miss the first edition — subscribe for free.

Blindspot: East Palestine and deportations

Stories that are being largely ignored by either left-leaning or right-leaning outlets, curated with help from our partners at Ground News.

What the Left isn’t reading: President Trump said his administration would direct $10 million to support East Palestine, Ohio, following the 2023 train derailment.

What the Right isn’t reading: Nearly six in 10 Americans say Trump has gone too far in his deportation campaign, according to a Washington Post-ABC News-Ipsos poll.

Beltway Newsletters

Punchbowl News: The Trump administration may enshrine in law many of the changes that border czar Tom Homan has made since taking over ICE’s controversial “Operation Metro Surge” in Minneapolis in January.

Playbook: Entra1 Energy, a tiny, three-year-old energy firm based out of a WeWork in Houston, is on the shortlist for a $25 billion contract from President Trump’s giant trade deal with Japan.

Axios: Anthropic CEO Dario Amodei has been summoned to the Pentagon for a meeting with Defense Secretary Pete Hegseth tomorrow over terms for military use of Anthropic’s Claude. “Anthropic knows this is not a get-to-know-you meeting,” a senior Defense official said.

WaPo: Billionaire Tom Steyer, who is running for California governor, wants people to know he’s not an “arrogant SOB.”

White House

• President Trump is quizzing advisers on whether Vice President Vance or Secretary of State Marco Rubio should lead a GOP presidential ticket in 2028. — Axios
• US Trade Representative