The Daily Insight: February 4, 2025

Welcome to our newsletter. My name is Cerulean and here are today's insights.

Gabbard and Kennedy Nominations Advance in Narrow Senate Votes

The Senate Intelligence Committee on Tuesday approved Tulsi Gabbard's nomination to become the next director of national intelligence, setting the stage for a floor vote for one of President Trump's most contentious cabinet choices.

The vote, 9 to 8, was along party lines, with every Republican supporting Ms. Gabbard's nomination and all Democrats in opposition.

While some Republicans harbor doubts about Ms. Gabbard, she won over the party members on the committee who were wavering, including Senator Susan Collins of Maine, who had voted against Pete Hegseth to serve as defense secretary. Senator Todd Young of Indiana had also asked tough questions in the confirmation hearing but announced his support for Ms. Gabbard in a social media post before the vote.

Some in Congress had thought that Ms. Gabbard's nomination would be the trickiest of Mr. Trump's choices, given her unorthodox views and her past service as a Democratic member of the House where she represented Hawaii.

But the stakes were lower than those for other nominees. The director of national intelligence oversees other spy agencies and sets broad priorities, but the job is not as powerful as that of director of central intelligence. That leader runs covert actions and oversees intelligence stations around the world.

Where things stand:

• Other nominees: Earlier on Tuesday, the Finance Committee voted along party lines to forward the nomination of Robert F. Kennedy Jr. to the full Senate, setting up a vote on whether Mr. Kennedy, a prominent critic of vaccines, will become the next health secretary.
• Agency turmoil: Two anonymous sets of FBI agents and employees have filed lawsuits seeking to bar the Trump administration from releasing the identities of agents and staff members who participated in the investigations into the Capitol riot on Jan 6, 2021. And locked-out employees of the U.S. Agency for International Development (USAID) are bracing for significant cuts to the agency's workforce and programs.
• Netanyahu visit: Mr. Trump will welcome Prime Minister Benjamin Netanyahu of Israel to the White House. They are expected to discuss negotiations for the second phase of the ceasefire with Hamas, Iran's efforts to build nuclear weapons, new arms shipments and hopes for a deal to normalize relations with Saudi Arabia.
• Trade war: Soon after the Trump administration's 10 percent tariffs on all Chinese products took effect on Tuesday, China's government hit back with its own levies and export restrictions.

U.S. President, Xi Won't Speak Tuesday After China Retaliates

China struck back against U.S. tariffs with levies on certain American goods, an antitrust probe into Google and restrictions on Chinese exports of key minerals. The moves escalated a new trade war between the world's two largest economies.

Just after American tariffs of 10% on China went into effect early Tuesday morning, Beijing said it would retaliate. Its measures will go into effect on Feb 10. The Trump administration struck deals Monday to delay imposing new tariffs on Mexico and Canada.

President Trump said the tariffs on China were just "an opening salvo." He added: "If we can't make a deal with China, then the tariffs would be very, very substantial." U.S. officials said Trump and Chinese leader Xi Jinping won't speak Tuesday, despite an earlier claim by trade adviser, Peter Navarro that they would hold a conversation about a potential tariff pause. A call could come tomorrow, a U.S. official said.

In other news:

• Stocks recovered from Monday's declines, while oil prices were volatile. The S&P 500 added about 0.5%, as U.S. crude futures rebounded to about $73 a barrel after sliding below $71.
• Both Canada and Mexico agreed to bolster their border security and take other steps to prevent drug trafficking following conversations with Trump Monday.
• China's tariffs affect U.S. energy exports, including oil, coal and liquefied natural gas, and other areas such as pickup trucks and farm machinery. A 10% U.S. tariff on Chinese goods would make products such as smartphones and prescription drugs more expensive.

Democratic Senators Call for Investigations of Musk's Access to Federal Financial Systems

Senators Elizabeth Warren (Massachusetts) and Ron Wyden (Oregon), the top Democrats on the Senate Banking, Housing, and Urban Affairs Committee and the Senate Finance Committee, respectively, are asking the Government Accountability Office to investigate Treasury Secretary Bessent's decision to grant Elon Musk and his "Department of Government Efficiency" acolytes access to sensitive government payment systems.

In a letter to the GAO - the congressional watchdog - Warren and Wyden say reports of Musk's access to the delicate financial systems "are deeply troubling." The systems, they note, process trillions of dollars of transactions each year, contain sensitive personal and financial information about millions of Americans, and ensure that Social Security checks, tax refunds and Medicare benefits are paid on time.

"GAO must investigate and determine who was granted access to these systems, why and how this access was granted, and the implications for the nation's economic and national security," they wrote. The senators specifically point to Bessent, highlighting reports that he was personally involved in granting Musk and his team access to the systems, and that he was also involved in the pushing out of the Treasury Department's top career official, David Lebryk, who long oversaw the federal government's financial infrastructure and operations.

"The access may threaten economic and national security," the senators wrote.

Warren and Wyden directed the GAO to investigate and determine which specific systems were accessed, whether the individuals who accessed the sensitive information had the appropriate security clearances, and whether guardrails are in place to protect economic and national security and Americans' privacy.

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