100 days of Trump

US President Donald Trump has shown great energy in his first 100 days in office, leaving few US institutions untouched whilst grabbing the world headlines. Many of his critics have been appalled by his rough diplomacy and high tariffs, whilst plenty of his supporters have been delighted that he has done many of the things he promised to do.

As markets have been mainly reacting to his words and deeds, we offer this resume of what has happened so far and what its impact has been.

Migration

One of Mr Trump’s key campaign promises was to close the US borders to illegal migrants and to return foreign criminals. Whilst we await full figures, reports suggest he has made a large impact by reducing the numbers and promoting more return flights.

The March one-month numbers show a decline in the number of illegals coming across the southern border of at least 95% compared to March 2022, 2023 and 2024. This has pleased his followers. However, it means a tighter US labour market going forward as part of a policy to raise real wages for the lower paid. Employers will need to find more US- based new employees. It is therefore mildly inflationary as a policy.

International alliances

As expected, the president has criticised European Nato members for not spending enough on defence and has been tough in his rhetoric over their need to make a larger contribution. He has made clear his wish to reduce the US commitment to Europe, strengthening home defences and making more available for the Asia region. He wishes to create a grand coalition against China, his main rival.

He does not think countries have best friends. Much of his diplomacy is transactional, seeking a good deal for the US with friend and former foe alike. Much of his diplomacy is personal, based on exchanges with other world leaders. The European Union (EU) can no longer expect special allied treatment. Canada has lost her status as close ally, friend and neighbour.

President Trump’s suggestion that Canada becomes a state of the US has upset Canadians, despite its lack of reality. His wish to do a deal with Greenland over minerals and defence has also been made more difficult by his language towards the islanders and Denmark.

In the Middle East, he is seeking to recreate his old alliance of Egypt, Saudi Arabia, the United Arab Emirates and Israel against the Iran-led grouping. This is difficult, given he allowed Israel to take tough action against Gaza, offending friends of the Palestinians. Mr Trump is seeking talks with Iran to try to get a wider-ranging deal over Iran’s conventional as well as nuclear weapons – and over reducing Iran’s support for terrorist groupings in the region.

In the Pacific region, President Trump seeks to solidify allies against China. The Philippines, Malaysia, Borneo, South Korea all have reasons to join the US against Chinese maritime expansions and island hopping. Japan and Australia are traditional close allies.

Peace

Peace was a crucial theme of his election campaign. So far, both in the Middle East and in Ukraine, he has failed to make breakthroughs with the leading players. He urged predecessor Joe Biden to secure the peace in the Middle East before the November 2024 election and tried his own solutions after winning. He then gave up on getting an agreement between Hamas and Israel, despairing of Hamas with its refusal to return all the hostages as a precondition of a ceasefire.

President Trump promised to settle the Russia/Ukraine conflict in a day. This task still looks very difficult 100 days into his term in office. He tried to tempt Russian President Vladimir Putin to the peace table by making Ukraine offer concessions, giving up territory Russia had captured and accepting they will not join Nato. When Putin failed to shift his position, President Trump hardened his rhetoric and is now talking about walking away from the whole idea of a ceasefire.

Russia has moved back from claiming the whole of Ukraine and seems to be willing to accept the current border. President Putin wishes to be given full title to Crimea, which Ukraine does not want to offer. Ukraine is in a difficult position if the US removes future financial and military support and has not been able to make any inroads into recapturing Crimea over the last three years of war.

Western allies think the US has given too much to Russia, but there is no alternative peace plan to the one Russia and the US are discussing. The EU and UK do not wish to get involved in the war and have found it difficult to agree the nature and purpose of any force to guarantee or keep the peace should there be a ceasefire.

Remodelling the state

Helped by Elon Musk, the chief executive of Tesla and SpaceX, Mr Trump wishes to slim the state and cut public spending. Mr Musk currently leads the new Department of Government Efficiency (Doge). The two men have in mind several ways of doing this:

• Raising productivity by better staff management and the introduction of more artificial intelligence (AI). They have offered a voluntary severance deal to staff.
• Identifying overlap of bodies and functions, and removing various quangos and parts of government bodies, as with Department of Education, and the amalgamation of financial departments.
• Removing regulations that require expensive supervision and enforcement. The biggest single area is to see the removal of much of the net-zero regulation.
• Making large cuts in money spent abroad, with reductions to overseas aid and a planned ending of special Ukraine financing.

Mr Musk’s optimistic claim to be able to cut $2 trillion from government budgets made prior to the election never seemed likely. He halved the target when he helped set up the Doge. Its website says that, to date, it has reduced future spending by $160bn by cancelling contracts, eliminating waste, cancelling leases and reducing staff. Most commentators think this is a considerable overestimate and have found various errors in the items identified. The work will continue – and will increasingly pass to Congress as it puts together spending plans and a budget.

The best way of curbing costs will prove to be staff freezes, which allow a gradual run-off in a total of 2.25 million employees. The proposed large cuts in overseas aid are subject to legal dispute. In some cases, Congress will have powers and a say on remodelling departments or abolishing individual independent bodies. Doge points out that these bodies have been passing 18 times as many regulations as Congress passes laws and sees this as excessive. It looks as if the initiative will produce some helpful savings to finesse the budget arithmetic, but no game-changing large reduction in state spending.

Going for cheap energy, not net zero

President Trump believes that domestically produced coal, oil and gas offers cheaper energy, a relative cost advantage for the US over the EU and other areas which rely on more expensive, imported energy. It is also a source of tax revenue and export income. He is granting more licences, freeing the industry to go for growth and advocating more fossil-fuel exploitation.

President Trump is not against wind and solar power but is removing some of the subsidies and advantages they were given under the Biden administration. He sees abundant energy as crucial to restoring more domestic industry and to growing and powering the data centres that process the digital revolution. The International Energy Agency (IEA) expects US growth in oil and gas output over the next two years.

Covid, lockdowns and vaccinations

Appointing anti-vaccine activist Robert F Kennedy Jr as Health Secretary was bound to mean big change. In office, he has accepted the value of various traditional vaccines but has rewritten the website over the pandemic. He and the president saw the lockdowns as excessive, consider it likely the virus came out of a laboratory in China and are sceptical about some of the vaccines.

The US has ended its membership of the World Health Organisation (Who), exempting itself from the wish of that body to take more powers. The administration thinks the Who got some of its analysis and policy advice wrong. Its support for long Covid lockdowns was thought to be damaging to the public and the economy in general, which led to President Trump’s disagreement.

Independence of the Federal Reserve

Mr Trump talked the Federal Reserve into a rate cut during his first period in office, breaking the convention that a president does not seek to influence the central bank on interest rates. This time, he is using stronger language against the Chairman of the Federal Reserve, Jerome Powell, claiming inflation is now well under control and interest rates need to come down to boost output. Treasury Secretary Scott Bessent had to reassure markets that the president was not about to sack the head of the central bank.

Tariffs and world trade

President Trump and his advisers like tariffs. They have two possible uses in mind.

One side of their approach is to place high tariffs on trading partners with a view to forcing a negotiation over a mutual reduction. They expect the other party to cut more, based on their own analysis that many countries protect more than the US.

The other approach is to use higher tariffs – with, for example, a 10% irreducible base tariff on everything – to raise more revenue to allow reductions in the deficit and to accommodate tax cuts. Tariffs are seen as good as they should make imports less competitive and persuade more businesses supplying the US market to do so from US-based production.

The tariff policy has hit financial markets badly but has been accompanied by a string of announcements of investment by manufacturers into the US. Some of this was based on plans already in place but some is additional.

Onshoring and rebuilding industry

The White House produces long lists of announced investments by companies. These are led by the digital industries, for example the Stargate $500bn investment into AI, Nvidia’s $500bn into microchips, and Apple’s $500bn into US operations. These are general figures usually stretching over four years. They represent a large commitment, which has in some cases been augmented by the Trump policies.

Taiwan Semiconductor has promised more than $100bn. The leading pharmaceutical companies have also rallied to the idea of more US production, with Roche announcing $50bn, Eli Lilly $27bn and Novartis $23bn.In the car industry, Stellantis has said it will reopen its Belvidere works and Hyundai has proposed a new steel plant.

Diversity, equality and inclusion (DEI)

Mr Trump has attacked the DEI movement, seeking to remove employees in public service managing this agenda. He has set out that there are only two sexes, with people being defined by their biological sex. This has also enthused his base and troubled the opposition. He expects to get some modest savings in public spending from this decision.

Conclusion

A president who, in his first term, thought movement of indices on Wall Street was a daily report on his success has lived with big market falls as his tariff policy alarmed many. A president who got through many changes of advisers and cabinet members in his first term has, so far, defended team members including ones who have embarrassed the administration. He seems to value their loyalty and is prepared to take some hit for them.

Mr Trump is still mainly motivated by wanting to promote US jobs and prosperity and may be pressed by markets and economic events to do some deals to lower some tariffs and barriers to trade. He did suspend his high tariffs for 90 days when markets plunged.

He will continue with his drive against a large state, against net-zero policies and against large-scale migration. These approaches are popular with the half of the US that voted for him. Slowing growth too much or pushing up prices would not be popular and must be some kind of constraint on how far he pushes his radical trade and economic agenda.

To date, President Trump can claim success in controlling the border, with Democrats alarmed by his methods. He has yet to make much impact on total spending and staff numbers. He will promote the fossil-fuel industries and has had some success in attracting additional investment from companies that often already had plans to spend capital in the US.

The tariff strategy is changing from day to day whilst creating instability in markets. The president could get that under control if he demonstrates the ‘art of the deal’ by closing some better trade agreements with leading partners. If he opts for a high tariff policy for everyone that will damage growth, lower confidence and create stresses in the world economy.