After the excitement of Donald Trump’s inauguration settles, he’ll dive into his agenda, focusing on economic initiatives like tariffs and tax cuts. As he did in his previous term, Trump is likely to use executive orders to deliver on certain promises, particularly his tariff ideas. When it comes to legislative moves, such as tax reductions, these will require congressional approval, where Republicans hold a slight majority in both the House and Senate. However, as seen in recent government shutdown struggles, the GOP isn’t always unified, either amongst themselves or in alignment with Trump.
On January 5th, Trump shared on Truth Social that GOP lawmakers are assembling a comprehensive bill to push some of his main campaign goals. He described this legislative package, during a conversation with conservative radio host Hugh Hewitt, as “one big, beautiful bill,” covering border security, taxes, and energy topics. Additionally, Trump mentioned to Hewitt that he wouldn’t mind the prospect of two separate bills.
Trump claimed on Truth Social that the bill would be financed through his planned tariffs, but the details remain sketchy about which of his many proposals will be included. Here’s a glimpse of the ideas he touted during his campaign:
– Launching extensive deportations of undocumented immigrants, with the support of local law enforcement and military forces.
– Establishing detention centers for immigrants.
– Hiring more Border Patrol agents and limiting the entry of asylum seekers.
– Resuming the construction of the border wall.
– Rolling back humanitarian initiatives that promote legal migration and work permits.
In terms of tax policy:
– Prolonging or permanently maintaining the tax cuts from his 2017 Tax Cuts and Jobs Act, which are scheduled to expire soon. This includes cuts in the estate and personal income taxes.
– Slightly reducing the corporate tax rate to 20%.
– Advocating for his “no tax on tips” policy, as per his Truth Social announcement.
– Introducing research and development tax credits to allow businesses to fully deduct expenses in the first year.
Regarding energy:
– Boosting oil production, although presidents can influence this area, they can’t guarantee outcomes. Trump aims to accelerate approvals for drilling and fracking initiatives.
– Reversing Biden-era policies on electric vehicle and charging station production.
– Scaling back emissions regulations for gas-powered vehicles.
– Instituting tariffs on imports related to the EV supply chain.
– Ending what he refers to as the “EV mandate,” which seeks to ensure that half of all new cars sold in the U.S. are electric.
The Republicans may try to pass either one or two comprehensive bills using budget reconciliation, a method that only needs a simple majority. House Speaker Mike Johnson, speaking to Fox News on January 5th, expressed optimism about passing the bill within Trump’s initial 100 days.
Tariffs are a key feature of Trump’s campaign, focusing on imposing new duties on trade partners. Initially, during his campaign, Trump spoke of levying a 10% to 20% tariff on all foreign imports, an additional 60% on Chinese imports, and a 100% to 200% tax on automobiles from Mexico. By December, he revised this to a 25% blanket tariff on imports from Canada and Mexico.
In a Mar-a-Lago press conference on January 7th, Trump mentioned imposing “very serious tariffs” on Mexico and Canada and hinted at potential high tariffs against Denmark. On January 6th, The Washington Post reported that Trump might apply tariffs globally but only on select imports, although it was unclear which ones. Trump later disputed this story on Truth Social the same day.
Economists speculate that Trump might use the International Emergency Economic Powers Act to justify his tariffs under a national economic emergency, though many predict this would increase prices domestically.
Regarding the debt ceiling, which dictates how much the U.S. government can borrow to meet existing legal obligations, was lifted on January 1st, with the nation approaching its limit soon. During shutdown discussions on December 19th, Trump told NBC he supported lifting or even abolishing the debt ceiling. He suggested Congress should tackle this in their resolution to keep the government funded through mid-March, though the final bill passed had no provisions for the debt ceiling.
To prevent a default, Congress must either suspend or raise the debt ceiling—a default could trigger severe economic fallout. On January 7th, Johnson indicated in a press conference that the expansive GOP-endorsed bill would address raising the debt limit.
Trump issued numerous executive orders in his first term and has set out several “day one” plans, including but not limited to:
– Commencing large-scale deportations.
– Implementing trade partner tariffs.
– Dismantling Biden’s humanitarian aid programs and ending birthright citizenship.
– Banning federal government’s diversity, equity, and inclusion (DEI) programs.
– Prohibiting trans women from participating in women’s sports.
– Pardoning individuals convicted for their roles in the January 6th, 2021, Capitol breach.
– Speeding up permitting for drilling and fracking.
– Executing climate strategies, including the end of the EV mandate.
– Instructing cabinet members and agencies to tackle inflation.
– Ending the conflict in Ukraine, though his strategy remains unclear.
(Photo by Kevin Dietsch/Getty Images News via Getty Images)
