Sunday 26 February 2017 11:03 pm

Trump's economic adviser targets tax reforms ahead of major speech

US President Donald Trump’s first Budget will focus on tax reforms instead of cutting back popular entitlement programmes, according to his main economic adviser.

In an interview with US broadcaster Fox News, Treasury secretary Steven Mnuchin said: “We’re going to start with tax reform. We’re focused on regulatory relief, and we’re focused on a whole lot of changes to make the middle class tax cuts and to make business competitive.”

Trump is due to make a speech to the US Congress on Tuesday in which he will set out more detail on his economic stimulus plans.

Read more: Trump and the markets: the good news and the bad news

During the election campaign Trump promised a trillion-dollar stimulus package without raising taxes, prompting an investor rush to move money into US equities in anticipation of faster growth.

Mnuchin said cuts to entitlement programmes, benefits given out by the US federal government, would not be part of the new administration’s first budget.

He said: “We are not touching those now. Don’t expect to see that as part of this Budget.”

Mnuchin also attempted to assuage fears of a move towards protectionism, saying Trump “believes in free trade, but he believes in fair trade.”

Trump’s rhetoric on bringing back jobs from other countries to the US has alarmed some investors, but Mnuchin said they would not start a trade war.