Trump transition and policies reverberating across resale programs as a Federal judge will review the buy-out program at a 1:00 p.m. hearing today. 

• Guantanamo—Military being deployed to support 30,000 deported immigrants.  Will commissaries and exchanges move to provide support for increased U.S. troop presence and the detainees themselves.  200 Marines have arrived with 300 more coming.

• Mexico border—1,500 troops are arriving from several U.S. bases with plans for more.  Exchanges may provide tactical field support for these troops.

• Gaza—The President’s announcement that the U.S. could ramp up its presence in the Gaza strip would be a major logistical effort that could pull in significant military assets.

• Europe—It’s expected that Trump will accelerate efforts to reach a peace deal between Ukraine and Russia with reverberations on eastern NATO employments.

• Pacific—Resale organizations are shifting priorities across the Pacific, particularly the Guam build-up and the Australia deployment.

• Tariffs—While the Canada tariffs are paused for 30 days, reinstituting them could affect Alaska product flow.  The China tariffs were not paused with price effects already being felt.  Retailers are still gauging the effects of the termination of de minimis shipments (duty free if shipped from overseas direct to consumers and valued under $800.)

• EU—Any tariff action could affect other EU import policies.

• DoD minimum wage—A Trump executive order has nullified the executive order that called for OPM to report on a $15 per hour minimum wage (now approaching $19).  OPM subsequently imposed the minimum wage. Defense and resale agency officials are assessing how to unwind the wage and return to a locality-based program.  The minimum wage policy devastated exchange programs.  The policy shift could affect appropriation offsets that were flowing from Defense to mitigate the impact.

• Contractor minimum wage—A Biden executive order implementing a $15 (now near $19) minimum wage has not been nullified.  ALA is petitioning the government to return to a locality-based wage instead of an across-the-board minimum.

• Federal hiring freeze—Defense entities are exempt from a Federal-wide hiring freeze imposed by the trump Administration.

• Randolph Sheppard rule on expanding blind management operations into current military exchange areas.  ALA is objecting to the expansion that has been proposed in a draft rule.  Meanwhile the entire rule could get thrown out or the author of the new rule (the Department of Education) is eliminated.

• Buy-outs—Federal and nonappropriated fund employees have a deadline of 5:00 p.m. February 6 to either return to work, quit and elect 8 months of pay or get fired if they don’t do either.  And the policy does not allow the agencies to back-fill the vacated slots.  Resale agency officials and Defense policy folks are scrambling to manage this at HQ and store and other levels.  A lawsuit has been filed by the Unions saying the program is illegal and a Federal judge is reviewing with a hearing for 1:00 p.m. today.  U.S. District Judge George A. O’Toole Jr., a Clinton appointee, will preside over a virtual hearing.

• New leadership, new priorities—Transition landing teams have arrived at all agencies.  They are not waiting for cabinet secretary confirmations to implement policies.  Personnel are descending on the agencies occupying positions including at the Defense, Veterans, and Homeland Security departmental level and at the military department service secretariats.

• FTC, USTR, FDA regulatory shifts—Trump says he wants to kill 10 regulations for every new one implemented.  Already, heads of many regulatory agencies that touch our business are being fired and new ones hired.  We are tracking action and shifts in policies on mergers and acquisition, food traceability and labeling, consumer protections, labor policy, food safety, trade and other issues and expanding our interaction with relevant trade groups such as FMI, NRF and others.

• Budget & DOGE—The Trump administration is terminating funding for many programs and is already moving to dismantle the U.S. Agency for International Development, the Consumer Financial Protection Bureau, the Department of Education and others as Elon Musk-led Department of Government Efficiency personnel descend on the agencies in what Musk calls an agency “wood-chipper”.  Also, Russell Vought, the new Director of the Office of Management and Budget is considering “impoundment” measures—meaning they would not execute spending already authorized by the Congress.  This comes while the government has already breached the debt ceiling and the current funding stream for government (continuing resolution) expires March 15.

• Defense funding levels and reconciliation—Congress is deciding now on what to move forward in an expedited funding process called reconciliation.  It appears to be shaping up as the first tranche being energy, defense (perhaps an up to $125 billion increase), and border security.  Not clear if a package to keep the Trump tax cuts will be part of the deal.

• Beltway tightening—We already have doubled-down on our outreach and partnership with a wide range of advocacy organizations (NMFA, AFGE and others) to strengthen the synergy of these partnerships in preparation for any eventuality that could harm the programs or opportunities with the new Administration and Congress to advance  these programs.

Your Association will be reporting and acting on all of this in your upcoming advocacy and communications products.

Best regards,

Steve Rossetti