Fredonia Project Sitrep 11 Us Domestic

DATE-TIME GROUP: 211800ZJULY25

FROM: EMBASSY OF FREDONIA, WASHINGTON D.C.

TO: MFA NAGADOCHES

CLASSIFICATION: CONEOFSILENCE // FREDONIAN EYES ONLY

SUBJECT: SITREP 11: ‘THE FREDONIA PROJECT” OBSERVATIONAL DISPATCHES FROM AMERICA IN CRISIS JULY 13-20

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 Trump Administration: A Week of Trade Escalation and Deepening Crises (July 13-20, 2025)

The week of July 13th to July 20th, 2025, marked a significant escalation in the Trump administration’s “America First” agenda, particularly in global trade, creating new crises and intensifying existing ones. The imposition of sweeping new tariffs, coupled with continued strong rhetoric on immigration and a focus on domestic energy, sent ripples of uncertainty across the globe, with particularly acute implications for small, Western, liberal democracies.

Major Actions, Events, and Statements:

• Tariff Escalation: EU and Mexico Hit Hard (Announced July 12, Effective August 1): The official announcement by President Trump, via Truth Social, of a 30% tariff on all goods imported from both the European Union and Mexico, set to take effect on August 1st. This was framed as a necessary measure to address what the administration termed “long-term, large, and persistent, Trade Deficits” with the EU, and, in Mexico’s case, a failure to adequately control fentanyl trafficking into the U.S.

  • Reaction: On July 14, EU trade ministers condemned the 30% tariff as “absolutely unacceptable.” European Commission President Ursula von der Leyen expressed willingness to negotiate but stressed that such tariffs would “disrupt essential transatlantic supply chains.” Mexican President Claudia Sheinbaum displayed confidence that an agreement would be reached and affirmed national sovereignty.

  • Fentanyl Narrative: The linking of Mexican tariffs to fentanyl flows, despite data suggesting most fentanyl is smuggled by U.S. citizens at ports of entry, underscored the administration’s use of immigration and drug trafficking as justifications for its broader policies.

• Domestic Regulatory Overhaul and Energy Agenda: The administration pressed forward with its agenda of deregulation and promoting domestic energy.

  • “Schedule G” in Federal Service (July 17): An Executive Order established “Schedule G” in the excepted service, allowing the administration to reclassify and potentially dismiss federal employees deemed to be working against the administration’s agenda. The Administration is selling this as part of a broader effort to reduce the federal bureaucracy and reshape the civil service. (Acting Ambassador Comment: In fact, that sentence is cover for destroying the expert-driven civil service and filling those jobs with inexperienced, unqualified Trump allies. Fredonia Embassy officers continue to see significant numbers of longtime expert contacts and valued US government employees dismissed. )

  • Review of NGO Funding (Memo issued earlier, with ongoing impact): The administration continued to review and potentially cease funding for NGOs perceived as “undermining the national interest,” reflecting a push to align federal funding with its political priorities. (Acting Ambassador Comment: To be clear, “undermining the national interest,” actually means “undermining President Trump’s agenda.”)

Impact on the U.S.:

The week’s actions, particularly the sweeping tariffs, are poised to have significant and largely negative impacts on the U.S. economy and society.

• Economic Contraction and Inflation: The 30% tariffs on the EU and Mexico will lead to a substantial increase in US consumer prices across a vast range of goods. This will exacerbate inflation, reduce real wages, and cut into household buying power. Economic models project an average income loss of $2,800 per household in 2025. U.S. real GDP growth is projected to be lower and unemployment is expected to rise.

• Supply Chain Chaos and Business Disruption: U.S. industries that are closely integrated with European and Mexican supply chains will face immense disruption, higher input costs, and potential loss of competitiveness. The automotive and aerospace sectors will be severely affected.

• Deepening Political and Social Divides: The Trump aggressive, demeaning and vicious immigration policies and the “Schedule G” executive order will exacerbate political polarization. Supporters will falsely claim the moves are necessary for national security and government efficiency, while opponents will condemn them as undermining democratic institutions, civil liberties, and economic stability. (Acting Ambassador Comment: The supporters will continue to love these immigration policies and shrinking the Federal work force until they need a passport, clean water after a storm, or a refund from the IRS.)

• Strained International Relations: The imposition of tariffs on key allies like the EU and Mexico will severely strain diplomatic relations, potentially hindering cooperation on critical issues like counter-terrorism, climate change, and regional stability. (Acting Ambassador Comment: Trump and his allies already dispute the existence of climate change so any examples of climate changes will be explained away. Counter-terrorism will only take on meaning if there is an attack against US interests, in the US)

Reactions and Problems Faced by Small, Western, Liberal, Democratic Allies of the U.S.:

For small, Western, liberal, democratic nations allied with the U.S., the period of July 13-20 was deeply unsettling, representing a profound challenge to their economic well-being, security, and fundamental values.

1. Devastating Economic Blow:

• Direct Tariff Impact: The 30% tariff on all EU imports is an existential threat to many small European economies that are heavily reliant on exports to the U.S. Industries across the economy will face significant losses, leading to widespread job cuts, factory closures, and may experience national recessions.

• Supply Chain Catastrophe: The tariffs will unravel decades of supply chain integration, leading to massive inefficiencies, increased costs for their own industries, and a sharp decline in trade volumes.

• Investment Flight: The extreme unpredictability of U.S. trade policy makes long-term investment in these countries highly risky, leading to a flight of capital and further economic contraction.

2. Profound Erosion of Trust and Alliance Foundations:

• Alliance Betrayal: The imposition of such a high, blanket tariff on an entire economic bloc, including some of the U.S.’s closest historical allies, is seen as an act of economic warfare, not of partnership. (Acting Ambassador Comment: This shatters trust and totally redefines the nature of the transatlantic alliance.)

• Questioning U.S. Leadership: Small democracies, reliant on a stable, rules-based international order, are left questioning the U.S.’s commitment to these principles and its role as a reliable global leader.

3. Increased Pressure for Strategic Autonomy and Diversification:

• Urgent Need for Self-Reliance: Facing direct economic attack from their primary ally, these nations will feel an even greater urgency to achieve “strategic autonomy” in defense, trade, and critical technologies. (Acting Ambassador Comment: This means accelerating efforts to diversify trade partners, strengthen intra-EU economic ties, and invest more heavily in their own defense capabilities, all of which are costly and challenging for smaller states.)

• Geopolitical Realignments: The actions push these countries to potentially re-evaluate their foreign policy alignments, seeking stronger economic and diplomatic ties with other major powers (e.g., China, India, other Asian nations) to offset U.S. hostility. (Acting Ambassador Comment: these realignments will likely create complex diplomatic dilemmas. Which will not be solved by the stunning lack of diplomatic skills evidenced by the President and his “team.”)

4. Challenges to Liberal Democratic Principles: (The first section needs to be edited, hyperlinking the Time article.

• Reinforcement of Populist Narratives: The “America First” model, with its nationalist and protectionist rhetoric, can embolden populist and far-right movements within these democracies, who might argue for similar unilateral and protectionist policies. (Acting Ambassador Comment: Time Magazine in 2024, described the danger of America First movements and diplomacy. The mid-twentieth century movement did not turn out well for most of the world.)

• Weakening of Multilateral Institutions: The U.S.’s continued sidestepping of the WTO and other multilateral forums further weakens these institutions, leaving smaller nations with fewer avenues for conflict resolution and protection from arbitrary actions by larger powers.

Jeffrey Epstein – Which we include only because it has taken so much air time

• DOJ’s Initial Stance (Early July): Trump, his allies (many now in his cabinet) spent years pushing the unverified story that Epstein’s trafficking activities included multiple elite Democrats. Once in office, early in July 2025, the Department of Justice (DOJ) and FBI issued a memo concluding that Epstein did not have a “client list,” that no further files related to his sex trafficking investigation would be made public, and that Epstein’s death was a suicide. These revelations were met with skepticism and derision by Trump’s followers who had been convinced of the veracity of the initial story.

• Trump Orders Release of Grand Jury Transcripts (July 17-18): On July 17, responding to fury from his base,Trump ordered Attorney General Pam Bondi to seek the release of “any and all pertinent Grand Jury testimony” related to Jeffrey Epstein, subject to court approval. Bondi confirmed the DOJ would move to unseal these transcripts on July 18. (Acting Ambassador Comment: Karma is a bitch.)

SUMMARY

The week of July 13-20, 2025, confirmed that the Trump administration is committed to a deeply protectionist and unilateral global strategy. For small, Western, liberal democracies, this translates into an immediate and severe economic crisis, a profound questioning of the transatlantic alliance, and an urgent need to fundamentally re-strategize their economic and security futures in a rapidly fragmenting world order.