Investing.com — President Donald Trump’s first 100 days back in office for a second term have been marked by sweeping executive actions on trade, immigration, and government restructuring, moves he described as “medicine” necessary to address the nation’s challenges. As focus now shifts to the next 100 days, will Trump deliver a major fiscal package-including tax cuts-to sustain economic growth amid political gridlock and budgetary hurdles?
“Although the seemingly never-ending flow of news on tariffs has dominated the discourse over the past month, we suspect that fiscal policy will be the biggest domestic focus over the next 100 days,” Capital Economics said in a recent note.
Trump Leans on Executive Power to Bring Sweeping Changes Needed for ’Golden Age’
Trump’s second-term agenda has been nothing short of radical, with the president issuing more than 140 executive orders in his first 100 days– more than triple the number signed by his predecessor, Joe Biden.
“Trump was quick … to spend the political capital he had gained, issuing close to 100 executive orders on his first day in office, and that total is now up to more than 140,” Capital Economics notes, calling the reliance on executive power “unusual in modern history.”
While the president’s use of executive authority has allowed him enabled radical changes on trade and immigration, the next phase is expected to shift focus to fiscal policy.
“We expect the uncertainty to ease further, as it becomes evident that Trump will accept minor concessions from most countries, in order to leave reciprocal tariffs at the 10% minimum rate,” the report said.
Road to Major Fiscal Package Paved With Uncertainty
The political roadmap to a major fiscal package, however, is far from clear. While both houses of Congress have passed a broad budget outline, “the real hard work begins, however, with the Republican leadership trying to find agreement with deficit hawks, who want deep cuts to mandatory spending, and moderates, who don’t.”
A key sticking point is whether the GOP can unite behind extending the original Trump tax cuts and supplementing them with new tax breaks for blue-collar workers.
While the additional $400 billion in annual tariff revenue can’t be formally included in the budget reconciliation, the report suggests that it “should still be enough to persuade the hawks that the deficit won’t increase when the original Trump tax cuts are extended and are supplemented with additional tax cuts aimed at blue-collar workers.”
Failure to reach a deal could see markets grow nervous about the debt ceiling, which could reach a crisis point in late summer if it isn’t lifted by then.
On trade, meanwhile, the initial shock in markets from “liberation day” April 2 tariffs, which were harsher than expected, forced Trump into a partial U-turn as the president paused reciprocal tariffs for most countries. Further trade uncertainty, however, is expected to subside, Capital Economics said.
The “unsustainably high 100%+ effective tariff on imports from China,” however, remains a flashpoint, though Capital Economics expects “some form of deal soon to reduce the tariff rates down to more manageable levels.”
Immigration Reform to Speed Up After Hitting Legal Roadblocks
While Trump’s efforts to swiftly reduce illegal immigration have run into legal roadblocks, keeping a lid on the pace of deportations, the president is expected to gradually ramp up deportations in his second 100 days.
“We expect a gradual ramping up of deportations to be combined with new restrictions on legal immigration, including possibly limiting international student numbers,” Capital Economics said.
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