Impacts of the Trump 2.0 agenda on tariffs, fiscal policy, climate, deportation and financial regulation

Abstract

The turbulent first eleven months of Donald Trump’s second presidency has been characterized by policy actions and statements that create large uncertainties and sideline multilateral cooperation. The Trump administration has fueled substantial trade policy uncertainty globally, as well as pushed protectionist policies that have induced negative supply shocks to the US economy. Monetary policy is frustrated by inflationary pressures from an elevated federal deficit. Green energy projects are proactively sidelined in favor of a return to fossil fuels. Stricter immigration policy and deportation of undocumented migrants threatens to reduce US economic output, adding to price pressures. The eventual push-back from the general public, courts and lawmakers has yet to materialize, so the Trump administration continues to move ahead on deregulation of financial markets, including the easing of capital and stress testing, as well as a modifying the laws and regulations affecting bank mergers and crypto currencies.