The Leverage Reflex Works Only Where the Law Already Lets It

In March, American officials signed mineral agreements directly with the governors of Goiás and Minas Gerais, cutting out the federal government in Brasília. The Lula administration's description of the arrangement was not diplomatic.

We have a proposal for a deal at the federal level. — Gabriel Escobar

It was a small, quiet instance of a reflex that now runs through nearly everything this administration does: comply, or lose access to something you need. The 69-country tariff regime set a baseline levy and raised it on any country that failed to fall in line ^[1]. The Iran "Economic Fury" campaign fused a naval blockade of the Strait of Hormuz with a sanctions push Bessent described as a full economic blockade ^[2]. The Donroe Doctrine conditions aid to Latin American governments on the election of preferred candidates ^[3]. FEMA has tied disaster grants to state population data that excludes undocumented immigrants, and the Department of Homeland Security conditions other funds on local cooperation with immigration enforcement ^[4]. The direction of the pressure flips depending on which side of the border it lands. Abroad, the administration strengthens subnational actors against a federal government — Brazilian states against Brasília. At home, it uses federal authority to override the states: the threat of a unilateral water allocation on the Colorado River, the revocation of billions in awarded grants. Same reflex, opposite direction. The hinge is the courts, and this is where the pattern becomes a story about what the executive is actually allowed to do. The Colorado River strategy looks like the most authoritarian move in the catalog — a federal agency threatening to impose water numbers on seven states. It is also the one that is quietly working. The Bureau of Reclamation holds genuine interstate water authority that courts have long upheld, and the negotiations have run through institutional channels led by career budget officials rather than the confrontational tariff team ^[5]. The Lower Basin states, rather than fight, have preemptively proposed their own cuts to avoid a federal takeover ^[6]. The tariff flagship is the mirror image: the most visible exercise of the reflex, and the one collapsing. The Supreme Court struck down the IEEPA tariffs 6-3 in February, opening a refund liability that companies and governors are pursuing to the tune of $175 billion ^[7]. A federal judge blocked the Office of Management and Budget's "Termination Clause" grant revocations as a violation of the Spending Clause ^[8]. The administration is now on its third legal attempt at a tariff regime, facing a 25-state lawsuit ^[9]. The trade representative, Jamieson Greer, has been candid about what is happening.

The specific authorities this administration is using have changed, but the trade strategy has not. — Jamieson Greer

The authorities change; the strategy does not. The administration is not retreating from the reflex — it is shopping for a legal basis that will survive review, and the courts keep telling it the power it is claiming does not exist. The limit is not only judicial. The reflex is also politically indiscriminate, and that is the second thing the White House cannot control. The tax law that accompanied the tariff push has triggered budget crises in Arizona, Idaho, Missouri, and Iowa — Republican-led states now cutting child care and disability services to close gaps of hundreds of millions of dollars ^[10]. Republican legislators in South Dakota and elsewhere are shifting the burden onto sales taxes they themselves concede are regressive ^[11]. A cutoff does not check party registration. It lands on whoever is standing in the way — and right now that includes a lot of the administration's own voters, paying more at the register to cover the gap.