As the U.S. government shuts down, Trump speaks with the governor of Minnesota and agrees to consider reducing the number of ICE personnel

# Source: Wall Street Insights

By Ye Zhen

**US Government Shutdown Crisis Countdown: Trump Rarely Softens Stance on Immigration Enforcement, Pledges to Reduce Federal Agents in Minnesota**

The direct trigger for this shift in the Trump administration's stance is the spate of shooting incidents in Minnesota, a variable that has dashed expectations for the passage of the budget bill. If the two parties fail to reach a consensus on funding for the Department of Homeland Security (DHS) by Saturday, key departments including the Pentagon will face a shutdown.

With the deadline for a partial US federal government shutdown looming this Saturday, US President Donald Trump has issued a rare signal of compromise on immigration enforcement policies, aiming to defuse tensions in Minnesota sparked by the fatal shooting involving federal law enforcement officers.

According to CCTV News, on January 26 local time, US President Donald Trump posted on social media that he had a phone call with Minnesota Governor Tim Walz on the same day. Trump described the conversation as "very good" and noted that "it seems we are on the same page".

On the same day, Walz's office issued a statement saying that Trump has agreed to consider reducing the number of federal agents in Minnesota, and pledged to discuss with the Department of Homeland Security to ensure that state government officials can investigate the January 24 incident in which federal immigration agents shot and killed US citizen Alex Pretti.

Trump stated that he will dispatch Tom Homan, the head of border affairs, to Minnesota to cooperate with local officials in handling the shooting incident that occurred on the 24th. The White House said at a press conference on the same day that Trump outlined a plan to restore order in the state during his conversation with Walz.

This statement marks a clear shift from the White House's previous tough stance. The strategy adjustment comes at a critical juncture when congressional budget negotiations have reached a deadlock. Affected by the Minneapolis shooting, Senate Democrats have made it clear that they will reject the $1.3 trillion spending budget bill unless major revisions are made to the funding provisions for the Department of Homeland Security (DHS) and additional regulatory restrictions are added.

This political game has significantly heightened market concerns about a government shutdown. If the two parties fail to reach an agreement by midnight Saturday, key departments such as the Pentagon and the Department of Homeland Security will face a funding cutoff. Hundreds of thousands of federal employees may be forced to take unpaid leave, dealing a direct blow to short-term economic activities and market sentiment.

## Trump's Sharp U-Turn on Immigration Enforcement Strategy

According to media reports, Trump said on social media that he had a "very good" conversation with Democratic Governor Walz, adding that the two sides are "on the same page". This moderate tone stands in stark contrast to his previous remarks accusing Walz of being "incompetent" and "low IQ".

The direct trigger for this shift in the Trump administration's stance is the successive fatal shootings in Minneapolis. On January 24, 37-year-old intensive care nurse Alex Pretti was shot and killed by federal agents. Although the White House initially claimed that Pretti was armed and threatened the agents, video evidence contradicted this account. Earlier, on January 7, another US citizen, Renée Nicole Good, was killed during an arrest operation by Immigration and Customs Enforcement (ICE).

The successive tragedies have sparked nationwide protests and sent Trump's approval ratings on immigration enforcement policies plummeting to a historic low. Rifts have also emerged within the Republican Party; Chris Madel, the Republican gubernatorial candidate in Minnesota, even suspended his campaign activities to protest the incident. Even Greg Abbott, Governor of Texas and a staunch ally of Trump, publicly stated that the White House needs to "recalibrate" the way it uses ICE.

The White House is currently trying to strike a balance between quelling public anger and maintaining a tough image. While emphasizing the willingness to cooperate with local authorities, Leavitt also attempted to blame the previous chaos on Walz and Minneapolis Mayor Jacob Frey, and distanced himself from the radical remarks made by his deputy chief of staff Stephen Miller, who referred to protesters as "potential assassins".

## Government Shutdown Crisis Looms Again

The current political crisis has directly spilled over into the fiscal realm. The unexpected shooting incident involving federal agents has shattered the previous market expectations for the smooth passage of the budget bill.

According to The Wall Street Journal, the Senate needs to pass the remaining six annual appropriations bills to keep the government running until September, with a total value of approximately $1.3 trillion, including $64 billion in funding for the Department of Homeland Security. This funding includes $18.3 billion for US Customs and Border Protection (CBP) and $10 billion for ICE.

However, the shooting in Minnesota has disrupted the previous legislative process. Although the Republican-controlled House of Representatives approved the measure last week, the prospects for a Senate vote have deteriorated sharply following the shooting.

Senate Democrats have explicitly demanded that the funding bill for the Department of Homeland Security (DHS) be separated from the omnibus package, so that provisions on immigration enforcement and oversight can be rewritten to restrict the authority of federal agents in urban areas; otherwise, they will not support the bill.

Republicans currently hold a 53-47 majority in the Senate, but under Senate rules, advancing the bill requires 60 votes, giving Democrats leverage to block its passage.

Time is running out ahead of the 12:01 a.m. Saturday deadline, and the House of Representatives is in recess this week. Even if the Senate reaches a compromise, there is significant uncertainty about whether the House can return to vote in a timely manner. In the event of a partial shutdown, while departments that have already received funding such as the Justice Department and the Commerce Department will not be affected, the Department of Homeland Security and the Pentagon will grind to a halt, with non-essential functions suspended. This will further fuel market concerns about Washington's governance capabilities.

## Risk Warning and Disclaimer

The market is risky and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation or needs of individual users. Users should consider whether any opinion, viewpoint or conclusion in this article is consistent with their specific circumstances. Any investment made based on this article shall be at the user's own risk.