US President Donald J. Trump does not have much breathing space to ease into his new job. Following his January 20 inauguration, expectations are high among both those rooting for him to succeed and those keen to see President Trump fail. Yet Trump’s presidency will be judged on how many of his campaign promises will translate into concrete policy. By LARA SIERRA-RUBIA for S-RM.
One problem is that many of US President Donald J. Trump’s fiery proposals on issues such as healthcare, trade, immigration and energy have lacked clear road maps for implementation. President Trump has nevertheless promised action from day one, but questions remain over what changes he will prioritise in the first 100 days of his term.
Within hours of taking office, Trump issued an executive order, giving federal agencies broad powers to begin undoing regulations created by the Obama administration’s Affordable Care Act. Throughout Trump’s campaign, he called the act a “disaster”, citing high premiums on the middle class. Promising that any new scheme will be affordable for “everyone”, Trump has proposed that states make large lump-sum payments to Medicaid. This approach, which is dependent on funding at a state level, has been opposed by a large contingent of conservative Republicans. Furthermore, Trump has claimed that he intends to negotiate drug prices, a move that is likely to alienate him from powerful pharmaceutical lobbies.
A partial repeal of Obamacare without a replacement would leave tens of millions of people without coverage, and the resultant disruption to the insurance market would also cause a spike in premiums. Trump is likely to attempt to prevent the rolling back of Obamacare from causing significant damage to the insurance market. However, aside from the executive order he signed on Friday, an actual timeline for Trump’s “repeal-and-replace” strategy has not been forthcoming.
Trump’s inaugural speech reaffirmed his stance on US protectionism. His statement that “we must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs” suggests that the US will move towards an inward stance on matters pertaining to trade.
Within hours of entering office, the Trump administration laid out its plans for trade on the White House website. Trump has promised to revive US manufacturing, strengthen the enforcement of existing trade deals, and implement an import tariff of up to 35% against companies that move operations outside of the US.
It appears that merely the threat of punitive measures against company relocations has yielded results; earlier in January, Ford announced that it was cancelling its plan to build a $1.6-billion plant in Mexico, and instead invest $700-million at a Michigan factory. The decision was made after Trump openly stated that he intended to take action to prevent company relocations. Furthermore, one of Trump’s first meetings as president was with manufacturing representatives, underscoring his focus on developing US industry.
President Trump has already issued an executive order to pull out of the Trans-Pacific Partnership (TPP), one of Obama’s landmark trade deals, indicating a move away from favourable trade terms with Asia. His next trade move is likely to focus on renegotiating the terms of the North American Free Trade Agreement (NAFTA), blaming the existing agreement for lower wages and jobs in the US. According to this approach, “tough and fair agreements” on trade could be used to grow the US economy and return millions of jobs to America. This hardline stance on trade matters is likely to cause disquiet among US trading partners. The international reaction to this stance is likely to challenge a dramatic shift in US trade policy. For example, Canada and Mexico will have to agree to new NAFTA terms – although Trump has threatened to pull out of the agreement entirely if he is not offered satisfactory trade terms.
One of the cornerstones of Trump’s campaign rested on building a wall between the US and Mexico, as well as deporting as many as three million immigrants. In terms of the wall (which Mexico has thus far refused to fund), Trump’s immigration reform plan calls for impounding remittance payments derived from illegal wages and imposing increased visa and entry fees to the US from Mexico unless the latter agrees to finance the wall.
In recent months, Republican leaders, in tandem with Trump’s transition staff, have considered resurrecting a 2006 law signed by former President George W. Bush that authorised the construction of 1,100-kilometre-plus of “physical barrier” on the US’s southern border. The law was never fully implemented and did not include a sunset provision, allowing Trump to pick up where Bush left off.
The current plan further appears to acknowledge, implicitly, that Mexico will not pay for the border wall. However, Trump has hit back via Twitter, claiming “the dishonest media does not report that any money spent on building the Great Wall (for sake of speed) will be paid back by Mexico later!”
Trump could roll back Obama’s policy of immigration enforcement policies that prioritise deporting serious criminals over undocumented immigrants with no criminal records. Large indiscriminate round-ups are possible in the first 100 days of a Trump administration. However, it appears that there is no larger plan to address the structural issues underpinning immigration problems in the US beyond physical barriers like fences and deportations.
Trump has consistently criticised Obama’s energy regulations. Within an hour of his inauguration, Trump’s team published a plan to revive the coal industry, an indication that many of the Obama administration’s energy regulations will be reversed. Trump plans to eliminate policies such as the Climate Action Plan and the Waters of the US rule in an effort to stimulate job creation. According to his administration, the removal of these “unnecessary” regulations would increase American wages by more than $30-billion over the next seven years in a move that will see the president prioritise short-term wins over long-term sustainability.
Trump will also be able to give the green light to projects that were blocked by Obama using executive action in the past. Controversial oil projects like the Keystone XL pipeline and the Dakota Access Pipeline could now be approved by Trump despite significant opposition by environmental groups.
Vision to action
Trump has many promises to enact now that he is president. While there will be restrictions on what he can accomplish in his first 100 days in office, the incumbent is already facing mounting pressure to vindicate his supporters for voting in a candidate outside the political establishment.
Trump will continue to rely on bold rhetoric to back an image of action and of him being an agent of change. While Trump has made proposals for major policy step changes, significant uncertainty remains over how his vision will be achieved. This means that the US and the rest of the world are going to have to play a game of wait and see.
What is clear is that his election promises are unlikely to be achieved within four years; either this means that major letdowns are on the way for his supporters, or that he will shift the goalposts to accommodate an eight-year plan. Irrespective of what transpires, sections of the US public will be left disappointed. DM
Lara Sierra-Rubia a is Senior European and North American analyst at S-RM (formerly Salamanca Risk Management), a business intelligence and risk consulting company based in Cape Town.
Photo: US President Donald J. Trump waves goodbye to supporters after watching the Inaugural Parade after he took the oath of office as the 45th President of the United States in Washington, DC, USA, 20 January 2017. EPA/ERIK S. LESSER
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