FREDONIA PROJECT - SITREP 10 : US DOMESTIC AND NATIONAL SECURITY JULY 7-13 2025

CABLE ID: 2025-0713-FRED/WASH/SITREP-010

DATE-TIME GROUP: 131800ZJULY25

FROM: EMBASSY OF FREDONIA, WASHINGTON, D.C.

TO: MFA NAGADOCHES

CLASSIFICATION: CONEOFSILENCE // FREDONIAN EYES ONLY

SUBJECT: SITREP 10: “THE FREDONIA PROJECT” – OBSERVATIONAL DISPATCHES FROM AMERICA IN CRISIS JULY 7-13 2025

SUMMARY:

IN ACCORDANCE WITH MFA DIRECTIVE 1826-APRIL-1, THIS EMBASSY HAS INITIATED A REGULAR SERIES OF ANALYTICAL DISPATCHES REGARDING THE INTERNAL DYNAMICS OF THE UNITED STATES. THE SERIES, DESIGNATED “THE FREDONIA PROJECT,” WILL BE CIRCULATED UNDER STANDARD SITREP PROTOCOL. UNAUTHORIZED PUBLICATION HAS BEEN OBSERVED VIA THIRD-PARTY ENTITY KNOWN AS “THE STEADY STATE.” PRESUMED LEAK. NO ACTION REQUIRED.

The Second Trump Term: A Week of Unilateralism and Trade Tensions (July 7-13, 2025)

During the week of July 7th to July 13th, 2025, President Donald Trump and his administration continued with their "America First" agenda, implementing a series of executive actions and statements on trade, energy, and immigration. The ongoing fallout from the June 21st U.S. strikes on Iranian nuclear facilities, continued to shape global dynamics.

Major Actions, Events, and Statements:

• Expanded Tariffs on EU and Mexico (Announced July 12, effective August 1): In a significant escalation of global trade tensions, President Trump announced on Truth Social that goods imported from both Mexico and the European Union would be subject to a 30% tariff starting August 1, 2025. These tariffs were justified by claims of unfair trade deficits, and linked to Trump’s perception that Mexico failed to curb the flow of fentanyl and other narcotics into the U.S.

• Continuation of Middle East Stance: The administration adhered to its stance on the bombing of Iran. On 8 July, President Trump met with Israeli Prime Minister Benjamin Netanyahu, reaffirming close coordination. The U.S. continued to assert its security interests in the region.

• Executive Orders on Energy and Environment (July 7-8):

  • "Extending the Modification of the Reciprocal Tariff Rates" (July 7): This EO likely provided the legal framework for the new tariffs announced later in the week, demonstrating the administration's intent to use tariffs as a primary tool for trade rebalancing.

  • Promoting Domestic Nuclear Power: In May, building on earlier EOs, the administration continued to push for streamlining nuclear reactor licensing and expanding domestic enrichment and reprocessing capabilities. These policies reflect an emphasis on nuclear energy as a national security asset.

• Immigration Enforcement Intensification:

  • "One Big Beautiful Bill Act" (OBBBA) (Signed July 4, with immediate and ongoing impact): This monster of legislation continued to draw significant, mostly negative, focus and attention. It drastically increased funding for immigrant detention and enforcement, including border wall construction. And, it put "unaffordable fees" in place for humanitarian protections and restricted access to health care, nutrition aid, and child tax credits for many lawfully present immigrants. (Acting Ambassador comment: The negative response by a majority of the US population was inflamed by revelations that many Senate and House members who voted for the bill didn’t know what legislation it contained.)

• Regulatory Reform and Bureaucracy Reduction: EOs and statements focused on broad deregulation and streamlining of federal processes across various sectors, including healthcare (e.g., Medicaid, pharmaceutical manufacturing). Continuing to restrict the size and scope of the federal government is a main focus of Trump.

Assessment of Impact of these policies on the U.S. :

1. Economic Impact:

• Increased Consumer Costs and Inflation: The imposition of 30% tariffs on goods from Mexico and the EU, major trading partners, is a significant blow to American consumers as prices for many imported goods are likely to rise substantially. (Acting Ambassador comment: Trump continues to demonstrate a profound lack of knowledge and/or understanding of economics, tariffs and their deleterious effects on the US consumer.)

• Uncertainty and Investment Chill: The unpredictable trade policy of this administration creates uncertainty among investors. Businesses may delay investment decisions, leading to slower economic growth and job creation. (Acting Ambassador Comment: many voters believed that a Trump economy would be far “better,” than one under a Democrat. As a reminder of the actual Biden economy, read the following. American Progress, https://www.americanprogress.org/article/the-biden-administration-handed-over-a-strong-economy/).

2. Social and Political Impact:

• Deepening Political Polarization: The "One Big Beautiful Bill Act" taking services and money from middle America while enriching the one percent, and continuing harsh immigration policies will intensify the political divide.

• Legal Challenges: The aggressive immigration policies and the new tariffs are likely to face swift and numerous legal challenges, leading to protracted court battles and further uncertainty.

• Impact on Federal Workforce and Governance: The push for "bureaucracy reduction" and regulatory reform will continue to mean significant worker firings and restructuring within federal agencies. (Acting Ambassador Comment: Embassy Fredonia personnel are watching experienced, smart, dedicated US Government workers cut off from their livelihoods, from the places and topics to which they have dedicated their professional lives, and dumped with little or no recourse.)

• Where Are The Epstein Files?: According to Forbes Magazine, on July 7, “The Justice Department quietly releases a memo determining Epstein committed suicide in his jail cell in August 2019, as well as dashing any hopes that a ‘client list’ exists in the thousands of pages of documents.” Nothing else, no convictions for sexual abuse or financial crimes, no tapes of obscene commentary about women, no upside-down Bible-holding has hit Trump with nearly the force as this failure of the administration to turn over the so-called Epstein files. These files which, according to Trump and his allies, contain numerous misdeeds by Democrats, about which Trump and company have been foaming at the mouth for years. As recently as February 2025, AG Pam Bondi handed out folders she said contained these files/papers detailing Epstein files. And, as recently as March 14, 2025, Bondi, during an interview with Fox News, claimed that the Epstein client list was “on my desk now” (Forbes.com, July 13, 2025). It was almost immediately clear then that there was nothing new in any of the redistributed stacks of paper.

• As of this writing, Trump supporters, from bloggers to cabinet officers, are infuriated by what they believe is the Trump administration’s refusal to release information. As this realization trickles down to the base, Trump’s supporters are beside themselves with anger and disappointment. (Acting Ambassador Comment: Trump has gotten away with lying to his base for years, but the lies he’s told his base about Jeffrey Epstein have clearly left the MAGA base feeling betrayed. MAGA, from Trump supporters, to his enablers in Congress to his media champions, is infuriated and seems reluctant to let go of the fury.)

3. National Security Implications:

• Strained Relationships with Key Neighbors and Allies: The tariffs on Mexico and the EU have far ranging security implications, and affect border security, counter-narcotics efforts and broad geopolitical issues with the EU.

• Regional Instability: Continued unilateral actions in the Middle East, and the impact of the strikes on Iran’s nuclear program, might yield prolonged instability and a greater risk of escalation in the Middle East. Which, in turn, could require continued U.S. military presence and resources.

• Weakened Alliances as a Force Multiplier: As a function of alienating allies through trade wars and unilateral actions, the U.S. ability to leverage collective power in addressing global security threats is lessened.

Assessment of Impact on Small, Western, Liberal, Democratic Allies of the U.S.:

1. Severe Economic Blow and Trade Uncertainty:

• Direct Impact of EU Tariffs: The 30% tariff on all goods entering the U.S. from the EU is a devastating blow. Their export-oriented economies will face rapid severe economic contraction, job losses, and reduced competitiveness.

• Disruption of Integrated Supply Chains: European industries are deeply integrated and tariffs on goods from the EU and Mexico will disrupt supply chains, leading to higher costs, reduced efficiency, and more bankruptcies.

• Recessionary Fears: The prospect of a full-blown trade war with the U.S., along with existing global uncertainties, increases the risk of a recession in Europe. A recession will have dire consequences for employment and social welfare in smaller nations.

2. Further Erosion of Transatlantic Alliance and Trust:

• Diminished U.S. Reliability as a Partner: Small democracies rely on the U.S. for security guarantees and as a champion and leader of the rules-based international order. Actions like tariffs, continued unilateral military operations and a rejection of multilateral forums, demonstrate a clear pivot away from these roles, forcing allies to question the fundamental reliability of the U.S. partnership. (Acting Ambassador Comment: Embassy Fredonia personnel and our democratic allies are seeing the frustration of US government workers writ large as they try to implement the “policies” of the Trump administration. Also, they and everyone else is unable to convey the dangers of these policies to the US and world order to President Trump.)

• Increased Urgency for European Strategic Autonomy: The economic and security threats emanating directly from the U.S. will accelerate efforts within Europe to develop greater strategic autonomy in defense, trade, and technology.

3. Challenges to Liberal Democratic Values and Norms:

• Contradiction of Shared Values: The U.S. administration's policies on immigration and trade, driven by nationalist and protectionist sentiments, directly contradict the principles of open societies, free trade, and multilateral cooperation that underpin liberal democracies. This ideological divergence makes it harder for these allies to reconcile their values with the actions of their once-key partner.

• Empowerment of Domestic Populism: The success of "America First" policies, likely embolden populist and anti-establishment movements in allied democracies, which often draw inspiration from such approaches. This can lead to increased political instability and challenges to mainstream democratic parties.

In conclusion, the week of July 7-13, 2025, marked a significant turning point for small, Western, liberal, democratic allies of the U.S. The imposition of sweeping tariffs on the EU represented a direct economic assault from their traditional partner, compelling them to confront a new reality where their economic stability and security are directly threatened by U.S. policy. This will inevitably accelerate their efforts towards greater strategic independence and a re-evaluation of their place in an increasingly fractured global order.

Founded in 2016, The Steady State is a nonpartisan, nonprofit 501(c)(4) organization of more than 300 former senior national security professionals. Our membership includes former officials from the CIA, FBI, Department of State, Department of Defense and Department of Homeland Security. Drawing on deep expertise across national security disciplines including intelligence, diplomacy, military affairs and law, we advocate for constitutional democracy, the rule of law and the preservation of America’s national security institutions.