The 2024 US presidential elections in November are set to be a historic rematch: Trump vs Biden. Current opinion polls indicate the race will be a tight one – showing the candidates to be largely neck and neck. But with the intricacies of the US political map, trying to ascertain who might win at this point in time, is anyone’s guess.
To shed some light into what we might expect should Trump prevail, Christopher Hodge, Chief Economist for the US, talks through some insights into a potential second term for Trump.
Christopher Hodge
Chief Economist for the US
In many ways, a second administration of Donald Trump would be much like the first. At the top of his domestic priority list will be stemming the tide of immigration flows, trying to reduce the US trade deficit, and cementing his signature tax legislation. Internationally, he would conduct a transactional foreign policy that is dependent on his personal relationship with foreign leaders. What has changed from his first term will be his and his team’s ability to navigate the federal bureaucracy. Trump’s team and outside advisors have been preparing to retake the White House and effectively and efficiently implement his agenda for some time. He will be ready to do so in short order, should he be elected. This is in stark contrast to his first transition and term, where policy implementation was chaotic and often ran afoul of legal process guidelines that delayed or scuttled policy.
Trump’s team and outside advisors have been preparing to retake the White House and effectively and efficiently implement his agenda for some time.
We highlight some of the key areas of focus under another Trump presidency below:
- Tax Policy: One area where Trump would likely find common ground with Congress is on tax policy, specifically the Tax Cuts and Jobs Act (TCJA), the signature piece of legislation in his first term. Some provisions of the TCJA are set to expire in 2025, including personal income tax cuts. While Democrats and Republicans will disagree on some of the finer points, neither party will be keen to raise taxes on the majority of Americans, so an extension of most of the TCJA is likely.
- Immigration: On immigration, Trump has constantly criticized President Biden for his lack of enforcement on immigration flows, especially on the southern border. Trump has vowed to restore his “remain in Mexico” policy that would require asylum seekers to wait in Mexico until the resolution of their cases. He has also pledged to deport millions of illegal immigrants, using funds diverted from the military to fund the effort.
- Trade Policy: Trump’s trade policy in a second term would likely pick up right where his first left off. In fact, he is more likely to double down on his tariff policies than back away from them. He is considering applying a “universal baseline tariff” of 10% that would automatically apply to all imports regardless of the source and a 60% tariff on Chinese goods. Even if these extreme policies are not actually implemented, their contemplation are reason enough to believe that an antagonistic trade relationship, even with ostensible allies, will still be on offer in another Trump term.
- Climate Policy: Trump's prospective second-term policies on climate would mark a stark departure from current climate policies under the Biden Administration. Trump would likely emphasize deregulation and increased fossil fuel production over environmental protection and climate change mitigation efforts. That said, we don’t think a full-scale repeal of the Inflation Reduction Act is likely. Many of the investment incentives of the IRA have disproportionately impacted Republican regions, with eight of the 10 congressional districts set to receive the biggest clean-energy investments recent led by Republicans. If re-elected, Trump might direct the EPA to completely scrap existing tailpipe regulations and could hinder the development of a national EV charging network by delaying or withdrawing the $7.5 billion earmarked by the Bipartisan Infrastructure Law. Additionally, Trump may dismiss or not refill key positions required to manage and monitor programs across key federal agencies. He is also likely to withdraw the US from the Paris climate agreement once more.
- Foreign policy/Relationship with the Europe: During his first term, President Donald Trump's relationship with Europe was marked by a mix of tension and collaboration. He frequently criticized European nations over defense spending and trade imbalances, particularly targeting NATO allies for not meeting defense spending commitments, which strained transatlantic ties. These strains will likely again come to the fore should Trump assume the presidency once again. Trump has been noncommittal and ambivalent regarding the war in Ukraine, only stating clearly that he feels he could broker an abrupt resolution. His previous skeptical remarks regarding NATO are reasons for concern for US allies. While the Congress passed a law preventing the unilateral withdraw from the alliance, the level of support the US provides to an ally is up to the president’s discretion. So, while Trump cannot pull the US out of NATO, he can indeed withhold support, neutering US involvement in a potential conflict.
Despite these frictions, there were instances of cooperation on issues like counterterrorism in Trump’s first term. His direct and often unpredictable diplomatic style led to a more transactional relationship with the EU and European countries. Overall, his views on the Ukraine-Russia war reflect his broader foreign policy approach of direct, bilateral negotiation and personal diplomacy.
Neither Trump’s policy priorities nor his personal style has shifted in a meaningful way from his first term. The execution of his agenda is likely to differ from his first term in several key ways, reflecting a more streamlined approach to governance based on past experiences and a more carefully selected federal workforce. Trump's second term could see a more strategic placement of loyalists in key positions within the federal bureaucracy. This strategy might aim to avoid the internal resistance encountered during his first term.
Trump's second term could see a more strategic placement of loyalists in key positions within the federal bureaucracy. This strategy might aim to avoid the internal resistance encountered during his first term.
In short, the next Trump administration would focus on the same core set of issues, but his agenda could be implemented in a more potent manner. The lessons learned from his first term combined with larger-scale reshuffling of personnel to secure a more compliant administration will make a second Trump administration, for better or worse, a more efficient operation to implement his agenda.
