Shutdown and Tariff Threats ... Again

January 26, 2026

Federal Govn Shutdown.. again?

Remember the government shutdown last fall?   Well, we might get another one this weekend.  A key spending bill is working its way through the Senate (it’s already passed the House).  It needs to pass by Jan 31^st to avoid a shutdown.  Unlike the last shutdown, only about half of the key Federal agencies are included in this bill. 

The key issue this time is the Dept of Homeland Security (DHS).  After the ICE shooting over the weekend, some Senate Democrats are calling for the DHS budget to be approved separately.  This would allow for legislating revised guidelines around ICE.  

The other key agencies at funding risk are Defense, HHS, Labor, and a few others.  The extent of this shutdown would be more muted.  It probably won’t have a major impact on the stock market.  But the lost wages do affect consumer spending.  And another shutdown of the Bureau of Labor Statistics would mean more delays in reporting data on jobs and inflation. 

Overall, it remains to be seen whether the Dems will have enough votes to force the issue.  We’ll track it this week.  Put it on your risk board.

Trump Threatens Tariffs … Again

On Saturday, President Trump threatened 100% tariffs on Canada if they make a trade deal with China.  However, since he recently backed down quickly on his Europe threats, the market does not appear to be taking this seriously for now. 

Canada is one of the US’s big four trading partners, along with Mexico, the EU, and China.   So, disruption there would have an economic impact  (read:  stock market impact).

As a reminder, 2026 is the first scheduled review of the USMC accord (aka, “the new NAFTA”).  So this year was already expected to be a rocky news cycle as it relates to trade with Canada and Mexico.  So, to some extent, this was expected.  But we’re starting the drama early.