“Despite the isolationist strains prevalent in the MAGA movement, President Donald Trump has embraced an interventionist approach to foreign policy in his second term by speaking loudly and carrying a big stick, particularly with respect to the Americas.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies
The Cozen Lens
- President Trump’s increased focus on foreign policy is not uncommon in a president’s second term, but his emphasis on the Western Hemisphere has surprised some, and his interventionist approach risks fracturing the MAGA movement.
- Federal surface transportation funding is up for reauthorization this year, giving President Trump another shot at the “Infrastructure Week” that never materialized during his first term.
- Everything is on the line this week for supporters of a crypto market structure bill as one of the two key Senate committees drafting the legislation eye the end game for bipartisan negotiations.
Americas First
An Eye to the World. While it is still less than a year into President Trump’s second term, his increased attention on foreign policy is typical of presidents in their second term.
- Like his predecessors, Trump is devoting more attention to foreign policy during his second term than during his first. Former President Barack Obama normalized relations with Cuba and struck the Iranian nuclear agreement, and former President Bill Clinton orchestrated the Dayton Peace Accord for the Middle East, while former President Ronald Reagan brokered detente and a major nuclear arms agreement with the Soviet Union.
- Part of the reason for this shift is legacy-building, with a second-term president more focused on seeking to secure their place in global history with re-election no longer on the horizon. It is also often an acknowledgment that significant further domestic legislative achievements will be difficult to come by, with the focus now on implementing those changes, a task left to the regulatory agencies.
The “Donroe Doctrine.” What has been surprising about Trump’s foreign policy emphasis has been the attention devoted to the Western Hemisphere in an Americas First strategy, or “Donroe Doctrine,” despite expectations that China would be his top priority.
- The emphasis on North and South America has become especially apparent following Trump’s recent intervention in Venezuela. Still, there were signs of it from the start of his term, with Mexico and Canada among the first countries hit with tariffs. This attention is further demonstrated by Trump’s focus on acquiring Greenland.
- The motivation for the White House to pursue these interventionist policies stems back to a focus on national security and accessing natural resources. However, part of the reason for the particular emphasis on pursuing these goals in the Western Hemisphere is a desire to assert the US’ authority in the region and to demonstrate its dominance over its “backyard,” particularly in light of China’s growing presence in Latin and South America.
- While this more interventionist approach does not align with Trump’s prior focus on extracting the US from foreign commitments, its unilateral nature remains a common throughline. The White House has shown no interest in coalition building or in seeking solutions that leverage allies, instead, flexing its muscle as it sees fit.
MAGA Holds Its Tongue. While Trump’s more interventionist foreign policy has sparked pushback from some members of the MAGA coalition, particularly with respect to his strikes on Iran last year, the backlash around the Venezuela operation has been relatively muted thus far, though it may still be coming.
- Much of the criticism of Trump’s actions in Venezuela has come from more fringe members of the MAGA movement to date, such as recently retired Rep. Marjorie Taylor Greene (R-GA) and influencer Candace Owens. Others have held their tongues, likely in part because the White House has not been clear about its planned next steps. This ambiguity has enabled other Republicans to choose their own narratives for those plans and stay united behind Trump.
- However, this support for the president is not a blank check, as those in the anti-interventionist MAGA wing will likely break with Trump if there are indications that the US is moving toward nation-building akin to what it has attempted in Iraq and Afghanistan, efforts which led, in part, to the development of the MAGA movement in the first place.
Infrastructure Week Returns
Deadline Approaching. Congressional authorization for federal surface transportation funding expires on September 30th.
- Congress typically reauthorizes transportation funding on a five-year basis. It’s now been half a decade since former President Biden’s Infrastructure Investment and Jobs Act (IIJA), and lawmakers will need to decide on a replacement. The IIJA provided a $118 billion boost for the Highway Trust Fund (HTF) and $68 billion for highways and public transit.
- During President Trump’s first term, the White House sought to execute on “Infrastructure Week,” but a major legislative push for infrastructure never materialized. Trump’s second term in office gives him the chance to leave his own imprint on infrastructure. Since returning to office, the president has taken a keen interest in building projects in Washington, DC. He may be more amenable to prioritizing infrastructure now than during his first term and the expiration of the IIJA would allow Trump to replace a Biden-era legislative achievement with his own.
- The next surface transportation bill under unified Republican control of Congress will likely have a narrower, more traditional focus on hard infrastructure (such as roads and bridges), rather than the IIJA’s more expansive approach. In a Washington Times op-ed last year, House Transportation and Infrastructure Committee Chair Sam Graves (R-MO) advocated “back to basics” and criticized Biden’s “unrelated liberal mandates.”
- In Politico interviews, Graves and Senate Environment and Public Works Committee Chair Shelley Moore Capito (R-WV) said they planned to begin consideration of legislation early this year. The August recess provides a natural deadline for Congress to pass surface transportation legislation ahead of the midterm campaign season. A short-term extension is possible if the September 30th deadline proves infeasible.
Opportunities and Challenges. A new movement within the Democratic Party could facilitate bipartisanship on infrastructure, while longer-term problems with the HTF loom on the horizon.
- Journalists Ezra Klein and Derek Thompson’s book Abundance popularized a movement within the Democratic Party in favor of slashing red tape, such as environmental reviews, and facilitating major public infrastructure projects, such as public transit. This year’s surface transportation bill provides an opportunity for “abundance”-inclined Democrats to leave their mark and could encourage bipartisanship on streamlining infrastructure projects.
- Recurring shortfalls in the HTF are a wild card for surface transportation reauthorization. The Congressional Budget Office has projected that based on current trends, the highway account may not have enough funding by FY28. Lawmakers could seek to address it in this year’s bill, but the lack of an urgent deadline could mean that Congress kicks it down the road. In his op-ed, Graves called for finding a solution, though it’s not clear at this time what could gain enough support on Capitol Hill. A proposed fee on electric vehicles and hybrids did not make it into the One Big Beautiful Bill Act and this would face steep odds to passage via regular order because overcoming the Senate’s filibuster-proof 60-vote threshold would require Democratic votes. In a December Politico interview, Graves ruled out a vehicle miles traveled fee, which would be another possible way to fund the HTF. If Congress does not address the HTF in this year’s infrastructure bill, the issue will return.
Giving Crypto Structure
Go Time for Market Structure. This week is shaping up to be a crucial test of Congress’ appetite for passage of a digital asset market structure bill with one of the Senate committees involved in legislative negotiations aiming to finalize and advance bill text in the coming days.
- Senate Banking Committee Chair Tim Scott (R-SC) formally announced last week that his committee will hold a markup of the Senate’s crypto market structure bill, dubbed the Responsible Financial Innovation Act of 2025, on January 15th. The Senate Agriculture Committee, which is drafting the portion of the bill that covers digital commodities and the jurisdiction of the Commodity Futures Trading Commission (CFTC), also hoped to hold a markup on the same day, but has delayed its markup as negotiations among its members continue.
- For supporters of the all-encompassing crypto regulatory effort, the flurry of activity in both committees signals a pivotal and precarious moment in a nearly year-long negotiation. Both committees introduced and revised bipartisan drafts of the market structure bill throughout 2025, but while there has been robust bipartisan support for both the negotiations and the premise of a market structure bill, neither committee has so far been able to reach a bipartisan consensus on the finer details of the legislation.
- The respective markups, during which committee members will vote on whether or not to advance the legislation to the Senate floor, will demonstrate whether the bill has sufficient bipartisan support to become law at this time. Given the GOP’s 53 to 47 seat majority in the Senate, the party will need the support of at least seven Democratic senators to overcome the filibuster’s 60-vote threshold on the Senate floor. Supporters of the bill fear that a partisan markup in either committee could serve as a death knell for the legislative effort; while there’s still time to further revise the bill text, legislating often slows as the midterm elections approach and the congressional calendar is truncated this year by both an August and an October recess.
A Handful of Differences. Senate negotiators agree on the broad contours of how to divvy up oversight of digital assets between federal regulators, but partisan differences remain over the regulation of the decentralized finance industry (DeFi), officeholder ethics, and stablecoin yield, among other things.
- DeFi regulation has been one of the top sticking points in negotiations, briefly shutting down talks in October. Industry and many GOP negotiators support legal protections for software developers and exemptions from money transmission laws, things that some Democrats and the banking industry have pushed back on. Democrats also have concerns with a lack of ethics protections, in particular, rules prohibiting government officials from profiting from digital asset-related activities. And in a spillover from negotiations over the GENIUS Act, the issue of whether firms like exchanges should be allowed to offer yield on stablecoin holdings is also a sticking point.
- Other issues at play include the classification of digital assets as securities or commodities. Some Democrats fear that the new regulatory framework could undermine traditional securities laws. GOP negotiators offered up dozens of concessions on asset classification in their “closing offer” to Democratic negotiators early last week. The White House is also considering appointing a bipartisan slate of commissioners to the CFTC according to Bloomberg, a move that would address a top concern of Democrats on the Senate Agriculture Committee.
- Even if Senate negotiators are able to resolve all their outstanding issues, lawmakers will also have to contend with the fact that the Senate bill differs in key ways from the House-passed market structure bill, the Digital Asset Market Clarity Act. But as was the case with the passage of the GENIUS Act, the White House has already signaled that it has no interest in prolonged bicameral negotiation, preferring that the House take up the Senate bill as is.
