The Daily Insight: February 1, 2025

Welcome to our newsletter. My name is Cerulean and here are the insights.

Canada, Mexico and China Brace for Tariffs

Businesses and officials in Canada, Mexico and China were bracing for word on Saturday on promised tariffs after days of trying to persuade President Trump not to go ahead with them. White House officials said on Friday that Mr. Trump would order on Saturday a 25 percent tariff on goods from Mexico and Canada, along with a 10 percent tariff on Chinese products.

Speaking to reporters from the Oval Office on Friday, Mr. Trump said he would impose the levies as punishment for Canada, Mexico and China allowing drugs and migrants to flood into the United States. He insisted that the tariffs would not fuel inflation and suggested that he would move ahead with them regardless of any last minute concessions from the other nations.

The president is expected to eventually sign an executive order putting the tariffs into effect and could do so retroactively. But the lack of clarity surrounding what Mr. Trump planned to impose created even more uncertainty for global businesses on Saturday morning.

Experts believe the tariffs could have broad impacts on the U.S., Canadian and Mexican economies, driving up prices for consumers and affecting jobs, although there was little doubt that pain would be felt more in Canada and Mexico's smaller economies.

Over the past few weeks, Mexican and Canadian officials have mounted major efforts to avert the tariffs: Canada has reinforced its border with more staff, drones and Blackhawk helicopters, and Canadian officials have been traversing the United States trying to lobby key Republicans against tariffs. Mexico has helped in aspects of Mr. Trump's immigration crackdown by taking in thousands of deported migrants.

But officials in both nations have also been working on retaliation plans, gearing up for what might quickly become a North American trade war. U.S. stock markets closed lower on Friday amid anxiety among investors about the fallout from the tariffs.

Lobbying groups for industries such as retail and agriculture, which could be among the hardest hit by retaliation from America's trading partners, were scrambling for information about the levies but remained in the dark. Mr. Trump said that the new tariffs would be on top of existing ones on products from Canada, Mexico and China, although oil imports could face a lower 10 percent tariff.

Democrats were poised on Saturday to point to the tariffs as an early example of Mr. Trump's mismanagement of the economy, arguing that he was already taking steps that would raise prices on consumers. A new analysis from the Budget Lab of Yale estimated that the proposed tariffs could raise annual costs on households by roughly $1,300.

Other news from the Trump administration

• Consumer agency head is out: The director of the Consumer Financial Protection Bureau, Rohit Chopra, was fired on Saturday, prematurely ending a five-year term that was scheduled to run through late 2026.
• Justice Department firings: The Justice Department's campaign of retribution against officials who investigated President Trump and his supporters accelerated Friday with the firing of more than a dozen federal prosecutors at the U.S. attorney's office in Washington, according to a memo. The Trump administration also plans to examine thousands of FBI agents, setting up a potential purge, according to people familiar with the matter.

Did An Idle Power Line Reenergize and Spark the Eaton Fire?

As firefighters finally gain full control of the massive, deadly Eaton Fire that leveled most of the beloved northeast Los Angeles community of Altadena, lawyers suing Southern California Edison (SCE) have advanced a new theory for what might have sparked California's second-most destructive fire: a decommissioned electrical tower briefly reenergizing during a powerful windstorm.

For the last few weeks, private, county, state and utility investigators have been examining miles of electrical equipment stretching across Eaton Canyon and into the neighboring communities to see whether any piece of it might have sparked the blaze that killed at least 17 people, consumed 14,000 acres and destroyed nearly 9,500 structures.

Much of the attention has been on two large high-voltage towers that provide power to tens of thousands of people across the area. Those towers were energized when the fire ignited on January 7. Residents captured striking videos and photos of flames surging beneath them on the ridge. But perched behind them on the now brown, barren ridge is a third, smaller low-voltage tower known as M16T1 that has been idle since 1971, according to SCE.

Now, photos captured by attorneys and investigators working with them show signs of recent arcing at the top of the tower, black discoloration at the juncture of two rusted steel beams, as well as damage to another tower on that deenergized circuit. Arcing occurs when voltage jumps between two conductors, in this case from one piece of metal to another, even when they aren't touching.

The utility has acknowledged a major disruption in its network right as the fire started, but it remains unclear whether that triggered the blaze. A fault is a significant electrical event that usually occurs when a wire breaks, touches the ground, another wire or another piece of equipment, sending energy out in the form of sparks.

SCE recently disclosed in a filing that its Eagle Rock-Gould circuit five miles away from Eaton Canyon, where the fire began, experienced a fault on January 7 at 6:11 pm. This fault, though not in the immediate area, "caused a momentary and expected increase in current on SCE's transmission system, including on the four energized lines" running through Eaton Canyon.

At the exact same time, in Altadena, an Arco gas station surveillance camera captured bright flashes coming from one of the towers on the hill. That white flash, according to experts, was probably an arc.

SCE has repeatedly stated that its data shows no anomalies or disturbances in the high-voltage lines crossing Eaton Canyon that were energized on January 7. At present, all the lines are deenergized, and attorneys have asked the utility to remove them for inspection. SCE has spent millions of dollars on addressing wildfire risk, and hours before the fire, it turned off power to hundreds of homes in the Altadena area.

Weekend Read: The Final Moments of American Airlines Flight 5342 Passengers

Some were promising figure skaters. Others were teachers or old friends on a hunting trip. They all perished in an instant, part of the worst U.S. air disaster in years.

Read their stories in The Wall Street Journal.

The Evolving Threat Landscape: Artificial Intelligence and Nuclear Security

We must preserve the indispensable role of human judgement. While artificial intelligence could serve as a valuable decision making tool, its use in sensitive nuclear assets introduces potential safety, reliability and ethical concerns. Extensive coordination and partnership between global actors is imperative, given the fact that potential consequences are significant.

Read our latest Special Report.

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Cerulean Insights