The Trump administration's second term marks a bold initiative to enhance government efficiency, championed by the newly formed Department of Government Efficiency (DOGE) under Elon Musk's leadership. At the forefront of this agenda are plans to drastically reduce the federal workforce by hundreds of thousands, coupled with substantial tariffs aimed at promoting economic protectionism and fiscal responsibility. While these strategies resonate with campaign pledges to eliminate bureaucratic excess and support domestic industries, they pose considerable risks of unforeseen repercussions that could affect the economy, public services, and international trade. From an enterprise risk management (ERM) perspective, leveraging the ISO 31000 framework offers a disciplined approach to identifying, analyzing, and mitigating these risks before they escalate into crises.

The Scale and Speed of Change

The administration’s push to reduce the federal workforce—potentially targeting 100,000 to 200,000 probationary employees and beyond—marks one of the most significant overhauls in U.S. history. DOGE’s mandate to cut “wasteful” spending and eliminate expired programs is ambitious, aiming for savings in the trillions. Meanwhile, President Trump’s tariff proposals, including a 10% universal tariff and up to 60% on Chinese goods, are being fast-tracked to reshape trade dynamics and fund tax cuts. These moves, while politically popular, are being implemented with breakneck speed, leaving little room for deliberate analysis of their broader implications.

From an ERM standpoint, the scale and velocity of these changes amplify risk exposure. Rapid workforce reductions and tariff impositions disrupt operational continuity, supply chains, and service delivery—areas where stability is paramount. Without a structured approach to risk identification and mitigation, the administration risks triggering unintended consequences that could undermine its own objectives.

Applying ISO 31000: A Framework for Managing Risk

ISO 31000, the international standard for risk management, provides a systematic process to address such challenges. It defines risk as “the effect of uncertainty on objectives,” a lens that perfectly captures the stakes here: uncertainty around job cuts and tariffs could derail the administration’s goals of efficiency and economic strength. The framework’s core steps—establishing context, identifying risks, analyzing and evaluating them, and implementing treatments—offer a roadmap to anticipate and manage these knock-on effects. Let’s explore how this approach could illuminate the risks at play.

1. Establishing the Context

The first step in ISO 31000 is understanding the environment in which these changes occur. The federal government employs roughly 3 million civilians, supporting everything from tax collection to national park maintenance. Tariffs, meanwhile, affect a global trade ecosystem that U.S. businesses and consumers rely on. The administration’s objectives—efficiency, cost savings, and economic protectionism—must be balanced against the operational and societal dependencies these systems support. Without this context, cuts and tariffs risk being blunt instruments rather than precision tools.

2. Risk Identification

Unintended consequences emerge when risks go unnoticed. Federal job cuts could lead to:

- Service Disruptions: Reduced staffing at agencies like the IRS, FAA, or CDC could delay tax processing, air travel safety oversight, or disease outbreak responses.

- Economic Ripple Effects: Layoffs of federal workers—many in middle-class roles—could depress local economies, particularly in regions like Washington, D.C., where government jobs are a lifeline.

- Knowledge Loss: Mass retirements or firings of experienced personnel could erode institutional expertise, hampering long-term efficiency.

Tariffs and DOGE-led cuts introduce additional risks:

- Supply Chain Strain: Higher costs for imported goods could disrupt manufacturing and increase consumer prices, fueling inflation.

- Retaliatory Trade Actions: Trading partners may impose counter-tariffs, shrinking U.S. export markets and hitting industries like agriculture and tech.

- Regulatory Gaps: Rapid deregulation or understaffing of oversight bodies could weaken environmental protections, financial stability, or food safety—a classic case of short-term savings creating long-term liabilities.

3. Risk Analysis and Evaluation

ISO 31000 calls for assessing the likelihood and impact of these risks—the “effect of uncertainty” on the administration’s objectives. For instance, cutting 65% of the Environmental Protection Agency’s staff (as Trump suggested in February 2025) might save costs but could cripple enforcement of pollution standards, leading to public health crises with costs far exceeding the savings. Similarly, tariffs could spark a trade war, with econometric models suggesting a potential GDP growth slowdown from 4% to 3.7% in Asia alone, per Moody’s estimates. These risks aren’t hypothetical—they’re predictable outcomes of interconnected systems under stress. Evaluating them reveals trade-offs that demand scrutiny.

4. Risk Treatment and Mitigation

Mitigation is where ISO 31000 transforms insight into action. For job cuts, phased reductions paired with retraining programs could preserve critical functions while transitioning workers to the private sector. Strategic outsourcing—rather than blanket eliminations—could maintain service levels. For tariffs, a staged implementation with exemptions for key industries could soften economic shocks, while diplomatic engagement might preempt retaliation. DOGE could prioritize data-driven audits of program efficacy over arbitrary cuts, ensuring savings don’t compromise mission-critical operations.

The Cost of Haste: Knock-On Effects in Action

History offers cautionary tales. Past workforce reductions under Reagan and Clinton faced backlash when service delays and inefficiencies emerged—unintended outcomes that lingered. Trump’s first-term tariffs on China, which raised $80 billion, also hiked consumer costs and disrupted supply chains, offsetting some of their benefits. Today’s accelerated pace amplifies these risks. For example, slashing National Weather Service staff could degrade weather apps relied on by millions, while gutting park rangers might leave national parks vulnerable to wildfires—a literal and figurative burning of resources.

DOGE’s focus on speed over strategy exacerbates this. Firing probationary workers en masse, as reported in early 2025, ignores their role in future capacity. Tariffs rolled out under Section 301 or emergency powers bypass congressional debate, sidelining stakeholder input that could flag risks early. In ERM terms, this is a failure of governance—a cornerstone of ISO 31000—where unchecked decisions invite cascading failures.

A Call for Risk-Informed Policy

The Trump administration’s vision of a leaner, tariff-powered government isn’t inherently flawed. Efficiency and economic sovereignty are worthy aims. But ambition without risk management is a gamble. ISO 31000, with its focus on “the effect of uncertainty on objectives,” offers a disciplined lens to see beyond the immediate—ensuring job cuts don’t hollow out vital services, tariffs don’t ignite trade wars, and DOGE’s zeal doesn’t trade short-term wins for long-term chaos.

Embedding risk assessment into these policies could align them with their goals while safeguarding against the unforeseen. The alternative—pressing forward blind to the knock-on effects—risks turning a bold agenda into a case study in unintended consequences. In enterprise risk management, as in governance, foresight is the difference between success and regret..