President Trump’s first 100 days
Below are seven key insights that might help companies frame their understanding of his administration and its impact on the US and global business environment.
Unpredictable in opinion, action and policy. There are no close political comparisons in recent US history to guide us. Richard Nixon’s volatile temper was not, for example, channelled through a Twitter account to the wider world. Nixon also had prior experience of government, a discernable ideology and effective advisers. Trump changes his mind easily, often based on his most recent conversation. Nor can his tweets be compared to Kennedy’s adoption of television or Roosevelt’s use of radio. Trump tweets seem more concerned with upholding his celebrity status than explanations of policy direction that would convey a sense of serious leadership.
Moderates have the upper hand, for now. Trump appears not to hold fast to any particular policies. Currently, moderate Republicans, such as son-in-law Jared Kushner and economic adviser Gary Kohn, appear to have the President’s ear, moderating his more confrontational views on China, NAFTA and other key business positions. In any case, he is unlikely to get anti-trade policies through the Senate; he faces a possible shutdown over the budget; and tax proposals that are not ‘revenue neutral’ look set to stall. Some limited infrastructure plans might go ahead thanks to support from Democrats.
Regulatory drift. Trump appears uninterested in implementing Federal rules (e.g. over environmental issues), leaving decisions to state-level governments. This may please businesses in Republican states but not in Democratic states. Appointments to key departments such as EPA or Education, are being used by ideologically-motivated White House chief strategist Steve Bannon as a means to undermine the organisations they would head. The administration has also issued contradictory testimony on re-instating Glass-Steagall regulations that had separated banks’ retail and investment operations, with the President supporting the proposal and Kohn opposing it.
Foreign policy returns to the norm. In line with much of his domestic pronouncements, Trump appears to have shifted his foreign policy positions to the historic norm, particularly in the Middle East and North Korea (though not necessarily Russia), bringing them back into line with mainstream US positions from which the Obama administration had departed.
Unlikely trade deals. Trump appears to have distanced himself from his earlier provocative statements disparaging the EU and supporting Brexit (which may have galvanised the Macron campaign in France). EU companies have also generally escaped his ‘US First’ tirades. But promises of a quick trade deal with the UK looks implausible, and even if possible, would be on US terms. Trade negotiations are essentially political rather than economic or legal deals, with the UK having little leverage, especially in the face of a US agricultural lobby that supports GM foods. A US/EU trade deal is also unlikely, not least because of differences over creating an independent dispute mechanism.
Republicans: friend or foe? A Republican-controlled Congress has not helped Trump as much as was previously assumed. Although still backing the president, their support may slip away if his opinion poll ratings fail to rise above 38-40%, and they risk losing Congress in 2018 midterm elections. The opposite also applies; and he still polls 84% among Republican voters.
Impeachment a long, political process. How long can Trump survive? He already faces allegations of ‘obstructing justice,’ a red line in US politics. Impeachment requires a lower legal threshold of evidence. Though some kind of smoking gun will be needed (possibly the James Comey memo or new evidence of White House collusion with Russia), it is typically not the crime but the cover up that matters. General Flynn may go to jail for lying about his Russia connections, and Trump will hope that charges stop there. But once investigations start in earnest, everyone is dragged in. This could leave the President beleaguered, with only family to rely on. However, neither party will want an impeachment process that seems like the elites are ‘circling the wagons’ against a champion of the white working class. Moreover, Democrats might fear a hard line and effective Pence presidency more than an ineffectual Trump administration. He may resign, but the betting is that he will continue, damaged, until his term ends.
- Michael Skapinker, Executive Editor of FT| IE Corporate Learning Alliance
- Brooke Masters, Companies Editor, Financial Times
- Peter Spiegel, News Editor, Financial Times