US President Donald Trump revealed his long-anticipated tax plan to the world on Wednesday, fulfilling a promise to create legislation within his first 100 days of office that will kickstart economic growth.
However, investors were underwhelmed by the lack of detail – the release consisted of a single page of 19 well-spaced bullet points. More importantly though, doubts are mounting over whether the President will be able to steer the plan through the US Congress.
Saturday marks the end of Trump’s first 100 days in office, a time Presidents are traditionally at their most untouchable, but he has so far struggled to assert his power.
Read more: Is Donald Trump the Populist dead?
Faced with legislative hurdles to his major reforms and the realities of office, Trump’s economic policies have been marked by failure more than success, as plans to scrap Obamacare fell flat, he softened his stance on trade and his attempts at reducing regulation looked ineffectual.
Trump has undeniably been busy, meeting world leaders in the White House and his Florida resort and signing 25 executive orders, including his controversial travel ban on nationals from seven majority Muslim countries (not to mention bombing Syria and talking tough on North Korea).
But the wholesale reorientation of the US economy promised by the President, along with four per cent GDP growth, will require Trump to master the US political process and actually pass major legislation.
Trump fell short on his first major piece of legislation, which promised to repeal and replace the so-called Obamacare health act. The administration quickly abandoned that at the end of March after opposition from across his Republican party.
The failure to do that has led to fears Trump’s economic growth plans, including a massive infrastructure spending boost, will never materialise.
Read more: A guide to the Trump trade
Markets are still giving Trump the benefit of the doubt, though. The S&P 500, which tracks the largest US companies, has risen 5.5 per cent since Trump’s inauguration, although the trade-weighted dollar index has fallen by around two per cent in the same time period.
A 15 per cent headline corporate tax rate (down from 35 per cent) and a chance to repatriate money stashed offshore should delight the US’s biggest companies, but massive doubts remain.
Meanwhile the so-called border adjustments tax, which would penalise imports heavily but allow exports a free run, does not form part of the White House plan.
Trade and protection
In his doom-laden inauguration speech Trump said he will “protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs”.
Although the rhetoric has remained, Trump’s attitude towards global trade has seemingly already been softened by office, although he has launched a review of all trade deals, due by the end of June.
Meanwhile, charges of currency manipulation against China have been kicked into the long grass (partly in exchange for help with North Korea), while vows to exit the North American Free Trade Agreement (Nafta) with Canada and Mexico have turned into a renegotiation (and some fiery words on the Canadian dairy industry).
Familiarity seems to have bred comfort for the President on the international stage. Meetings with national leaders like China’s President Xi Jinping have been swiftly followed by screeching U-turns on core policies, while learning about Nato has made him row back on his former view, “not knowing much”, that it was “obsolete”.
Regulation slash and burn
The main achievements of the administration so far have come through executive powers, which Trump has used to ruthlessly target rules he thinks are holding back US growth.
Environmental regulations have borne the brunt of the action, with the coal industry one of the key beneficiaries. One of Trump’s earliest acts was also to allow the controversial Keystone XL oil pipeline from Canada to Nebraska.
Last week he signed an executive order forcing the government to “buy American, hire American” when looking for contracts, part of his “America first” plan which has also involved him leaning heavily on companies planning to move jobs out of the US.
One part of America definitely set to come first is the banking sector. Trump has promised to “do a big number” on the Dodd-Frank banking act, with a review already underway. He has also decreed every new regulation must be accompanied by the removal of two old ones.
While the effects of Trump’s executive actions so far on the aggregate US economy are negligible, they will play an important role as symbolic successes which he can parade for the benefit of his core voter base.
The massive rally in global stock markets that greeted Trump’s election was prompted in part by the expectation he would govern much as he campaigned, sweeping his way through obstacles and focusing all of his energies on his domestic economic growth agenda.
In reality the President has been held back by the mundanities of the American democratic process, while some of his more alarming policy ideas seem to have been tempered by contact with the Washington establishment he maligned so vigorously during the election campaign.
There are also some small signs Trump is starting to realise the challenge some of his more radical economic policies will face. Whether he has achieved enough to appease expectant voters (and investors) is another matter entirely.
Trump's wins and losses: a 100-day timeline
|20 Jan||Donald Trump assumes the Presidency, saying “Protection will lead to great prosperity”; signs executive order saying he will repeal Obamacare and limits funding|
|24 Jan||Allows Keystone XL and Dakota Access oil pipelines|
|25 Jan||Directs border agencies to secure the border with Mexico|
|27 Jan||Prime Minister Theresa May meets Trump; Trump signs order banning entry of seven Muslim-majority nations to the US. Travel ban blocked by courts two days later|
|30 Jan||Executive order for two regulations to be scrapped for every new one|
|3 Feb||Executive order starts review of parts of Dodd-Frank Act banking regulation|
|10 Feb||Trump meets Shinzo Abe|
|13 Feb||National security advisor Michael Flynn resigns over Russia links; former Goldman Sachs banker Steve Mnuchin confirmed as Treasury secretary; Trump questions Nafta trade deal with Canada|
|16 Feb||75-minute long press conference bashing media; ends Obama-era rule targeting coal industry|
|24 Feb||Trump bans critical press from briefings; agencies required to scrutinise regulation for economic harm|
|27 Feb||Trump proposes 10 per cent rise in military spending|
|28 Feb||Major speech to Congress gives no detail on economic plan, but the S&P 500 still jumps by 1.37 per cent on the next trading day|
|4 Mar||Accuses Obama of wire-tapping|
|6 Mar||Second attempt at travel ban|
|9 Mar||Vows to scale back Dodd-Frank|
|21 Mar||S&P 500 suffers biggest fall since election as investors doubt Trump tax plans|
|24 Mar||Healthcare bill abandoned after days of political chaos|
|28 Mar||Executive order rolls back regulations on fossil fuel extraction|
|31 Mar||Executive order of 90-day review of US trade deficits|
|6 Apr||Discusses trade and North Korea with Chinese President Xi Jinping in Florida; orders US missile strikes in Syria after chemical weapons attack|
|11 Apr||Threatens unilateral action on North Korea|
|12 Apr||Backs off China currency manipulator accusation|
|20 Apr||Launches review into steel imports, particularly in China|
|21 Apr||Executive order for review of tax regulation and memorandums for Dodd-Frank review|
|26 Apr||Launch of one-page tax plan; says US will renegotiate Nafta|
|29 Apr||100th day in office|