Trump expectations

In an interview with the Associated Press on 21 April, US president Donald Trump downplayed the significance of his ‘first 100 days’ in office: “I've done more than any other president in the first 100 days and I think the first 100 days is an artificial barrier.”

While his first claim has FDR rolling in his grave, he’s right in saying the first 100 days is an artificial barrier. It’s not linked to any particular legislative calendar (although the second 100 days will end with the Congressional summer recess, when everyone escapes sweltering DC for a month). Nonetheless, for past presidents, it has been a ‘honeymoon’ sprint to flex their electoral mandate on policy, before getting bogged down in politics.

For Trump, who pledged a bold first 100-days policy agenda during the campaign, it has been more of an endurance test. While the shadow of Russia’s alleged election interference continues to hang over the White House, surpassing the 100-day mark - when many observers were doubtful it would last that long - shows that the administration is resilient. Despite setbacks, it may eventually find its feet on policy.

Establishment Republicans, opposition Democrats, the so-called ‘resistance’, and the business community must recognise that Trump is not going anywhere anytime soon. The markets already have: UK betting agents in February offered 5:2 odds that Trump wouldn’t make it a year in office due to resignation or impeachment. Now it’s even money that he will be re-elected in 2020. (Trump himself is coy: he told the AP that his ‘amazing relationships’ with foreign leaders would serve him well for “four or eight years, whatever period of time I'm here.”)

On one hand, this probably removes a higher-level political risk – abrupt government change – from the US outlook. But, by the same turn, it also preserves the potential for disruption that Trump has brought to trade, US foreign policy, and the post-Cold War world order.

What lessons can we draw from the first 100 days, in terms of what the next 1,361 (at least) might look like? Here are a few:

• Never underestimate Trump: Trump’s approval rating is plumbing historic lows, he’s casually abandoned key campaign pledges, his policy record consists largely of modest executive orders promising future action, and parts of his agenda – on healthcare and discretionary spending cuts – directly threaten his core constituencies. But polling at the 100-day mark shows that over ninety per cent of Trump’s voters still support him. His base may not be growing, but it’s not shrinking, either. By all accounts, Trump’s voters believe he deserves more time and opportunity to prove himself, cushioning him from political setbacks. But Trump cannot continue to rest on the laurels of his Electoral College margin: his supporters expect results, especially when it comes to jobs and livelihoods, and will not long accept excuses about the ‘fake news’ or Obama’s legacy if Trump’s policies start hitting their pocketbooks.
  
  
• Never underestimate the establishment: Trump may embrace a populist strategy of ‘deconstructing the administrative state’ through budget cuts, deregulation, and a lack of appointments, he is also starting to realise just how complicated the machinery of federal government actually is. Pen strokes and photo ops in the Oval Office do not automatically accelerate rulemaking processes, appropriate funding, or hasten litigation. Congressional Republicans are factionalised, while opposition Democrats are relatively unified. Surprise, surprise: making progress in Washington is easier said than done, and Trump will continue to be forced back from more radical positions by the sheer inertia of the political system. The interesting thing is, the more mainstream Trump’s advisors and policies have gotten, the more successful he has been (both in terms of execution and media coverage).
  
  
• Checks and balances are working: The US system is based on three co-equal branches of government with constitutionally-delegated powers. Of these, and as intended, the federal judiciary has acted as a main check on executive action by halting several orders relating to immigration. It will also play a major role in looming battles on environmental and energy regulation. The Republican-controlled Congress has been more amenable to Trump’s actions – notably on his appointment to the Supreme Court – but only to a point: a coalition of moderate and conservative Republicans stymied the administration’s initial healthcare overhaul, foreign policy hawks blunted overtures to Russia, key Senators declared Trump’s proposed budget dead on arrival, and few in Congress support building an actual wall along the Mexican border. Trump’s rhetoric gives the impression of a free hand, but the reality is that US institutions are relatively strong, deliberate, and self-interested.
  
  
• Beware of foreign policy wagging the dog: With the surprise Syria strikes, the MOAB strike on IS in Afghanistan, and North Korea sabre-rattling, Trump continues to prove that he is a deft manipulator of mainstream and social media. Trump undoubtedly also appreciates his latitude in foreign affairs, particularly given his affection for military power, and is crafting a foreign policy around projecting strength abroad. But these cases also show that the stakes of grabbing the headlines have increased, in some cases dangerously. When Trump comes under pressure or needs a win, look for him in the Situation Room or at the presidential podium during prime time. But it’s only a matter of time before Making America Tough Again starts to have blowback, whether directly or through the increased risk of accident or miscalculation.
  
  
• Populism still has room to run: As he closes out 100 days, Trump’s pragmatic economic and national security advisors appear ascendant over the populist forces that got him elected. Trump admits that labelling China a currency manipulator would make it hard to cooperate on North Korea. A strong dollar turns out to be inimical to boosting exports and cutting the trade deficit. Given threats from transnational terrorism to Russian aggression, NATO turns out not to be obsolete after all. Business should appreciate this tack towards economic and foreign policy reality, but remain wary of the populist forces Trump represents. 
  
  
• Globalisation is pretty durable: Trump’s rhetorical assaults on free trade remain a concern, and have yet to be tested in key forums such as the World Trade Organization (WTO), where the US just lost a long-running case on Mexican tuna. But in backing off from a threat to immediately withdraw from NAFTA, ducking a trade war with China, and focusing on revising rather than rejecting trade relations with Japan and South Korea, the administration has recognised the economic and political limits of an ‘America First’ trade policy at a time of global economic integration. Trump’s directives on trade to date stop far short of the extreme interpretations of his executive authority, focusing chiefly on tighter enforcement of existing trade remedies. This does not preclude further symbolic and sectoral trade actions, similar to the countervailing duties imposed on Canadian lumber this month, but such actions are par for the course in Washington and do not represent a threat to the global trading system.