Economic reality check: Donald Trump’s first 100 days

After 100 days of steering the world’s biggest economy, there is some evidence to suggest that US President Donald Trump is having to adapt to economic reality.

Trump stated in a tweet that the 100 days milestone is a ridiculous standard. But analysts and journalists look at the first 100 days because this is usually the best time for a president to push through new legislation.

So what has actually happened over the past three months?

On the eve of the 100 day deadline, Trump announced what he described as the biggest tax cuts in US history. But he didn’t say how he would pay for them. His administration says the plan will simplify the US tax system by reducing the number of tax brackets and cutting the corporate tax rate by more than half. Diane Eastabrook reports from Washington, DC. 

What about the other big campaign promises?

What we've seen is an administration on a steep learning curve in terms of trade policy and what they actually can do.

by Fredrik Erixon, director, ECIPE

Trump vowed to get rid of bad trade deals, as evidenced by his pulling out of the Trans-Pacific Partnership (TPP) agreement. But since then his tone has softened.

At the president’s summit with China’s Xi Jinping, the two leaders seemed eager to avoid a trade war and Trump decided not to formally label China as a currency manipulator.

He’s also decided not to pull out of the North American Free Trade Agreement (NAFTA) but instead, he wants to negotiate with Mexico and Canada.

So what about building a wall and getting Mexico to pay for it? Democrats say they won’t authorise funding for it. So Trump didn’t force a government shutdown over it.

Commenting on where Trump stands on global free trade, Fredrik Erixon, director of the European Centre for International Political Economy (ECIPE), says “what we’ve seen is an administration on a steep learning curve in terms of trade policy and what they actually can do.”

“My expectation is we’re probably going to see a Reagan-type trade policy that we had in the 1980s that combined some positive gradual liberalisation with use of a lot of defensive policy instruments like anti-dumping tariffs, etc, that he’s planning to put on Canadian lumber now.”

Trump’s campaign rhetoric differs from the current economic reality.

“I have no idea what happens inside the head of President Trump, but he, like everyone else will be confronted with a political and economic reality which is that if he wants to behave in a protectionist manner against others – they will do the same against him and that’s going to hurt US economy quite substantially, and I think that’s what they’ve learned over the past 100 days,” explains Erixon.

Also on this episode of Counting the Cost:

China’s shadow banking: A big crackdown on what’s known as the shadow banking system has been causing turbulence in the Chinese stock markets. Shadow banking is high-risk lending that has grown over the years. It has been described as a ticking time bomb with the potential to rock the Chinese economy. These financial products are being sold with little regulation and oversight, but the government wants to change that. Catherine Yeung, the Investment Director for Hong Kong-based Fidelity International, explains what’s at stake.

China-Pakistan Silk Road: China is investing billions of dollars on road and rail networks in Pakistan. The aim is to open up new trade opportunities across Asia and into Europe in a modern version of the old Silk Road. But it’s not an easy task, as construction workers face attacks from separatist fighters in the country’s largest province. Kamal Hyder reports from Gwadar, Balochistan.

Wikipedia’s WikiTribune venture: One of the founders of the online encyclopaedia Wikipedia, Jimmy Wales, is turning his hand to the news business. Wales has announced WikiTribune, an online publication that will pair professional journalists with volunteer contributors as a response to the explosion of fake news. Technology editor Tarek Bazley reports.

India’s alcohol ban: It’s now illegal to sell alcohol within 500 metres of India‘s state and national highways, a move that’s driving some bar owners to extreme measures. Andrew Chappelle reports.