Five predictions for Trump’s first 100 days

There’s a new president in town. While I’m steering clear of today’s inauguration ceremony, the fact that I was able to get a decently priced, last minute hotel room in Washington’s Dupont Circle for some meetings tomorrow makes me think that the attendance numbers will be less than whatever the Trump team reports.

This year will be unpredictable to say the very least. But I’m going to go out on a limb in this first note of the new administration and test my luck with a few predictions.

1. Trump will struggle to keep the trust of his Maga base

We’ve already seen fractures between Trump’s base and the billionaires in his circle on topics like the H-1B debate. We may also see the two groups split on things like industrial policy, as well as national security, China, foreign affairs, workers’ rights, free speech and the primary process. These factions will make Trump’s first few months in office rockier than they might already have been.

2. The markets will stay high

We may see some ups and downs, even sharp ones, depending on the political rhetoric (or any real action) around things like tariffs, trade, Taiwan or — god help us — Greenland. But I expect that markets will be higher at the end of the first 100 days than they are today. Three reasons for this: first, deregulation and tax cuts will keep growth up for the short term. The latest IMF forecasts just raised 2025 estimates for the US from 2.2 to 2.7. Second, the tech story will continue to push US stocks higher. And finally, the fact that China and Europe still have no bullish investment story means that even with Trump in charge, the US markets will feel like a place of relative safety amid political storms. I’m not saying this will be the case in two years, but I think it’s the story for 2025.

3. The US will fall behind on all things clean energy

Trump’s “drill, baby drill” approach and affinity for energy companies mean that the new administration will try to dismantle Biden’s signature Inflation Reduction Act as quickly as possible. I also think that America will give up any pretence of still being in the electric vehicle race. China’s BYD can already make EVs much more cheaply than Tesla, and if the current sales trends hold China will sell more EVs than cars with internal combustion engines for the first time ever in 2025. Will this mean that Elon Musk gives up on Tesla and focuses more effort on SpaceX and his social media platform X? I think yes.

4. But Trump won’t gut everything that Biden did

While Republicans might not like subsidies, I think they will continue to encourage access to cheap government investment capital. Money through vehicles like, for example, the Department of Energy’s Loan Programs Office is very cheap for both borrowers and government. Companies used this during the Biden administration to get access to expansion and development projects. Republicans will probably encourage this approach. I think they’ll also hesitate to cut spending on infrastructure, since they love to show up to ribbon cuttings, and so much of that Biden stimulus went into their own red states. Finally, I think that industrial policies like the Chips Act will survive, because they are working well and are crucial for national security.

5. America will look more and more like an emerging market politically

Biden was quite right in his parting speech to warn about the emergence of a new oligarchic power class in the US. It’s disappointing, but not surprising, that so many CEOs have already rolled over for the new president. It’s also incredible that we are now in a situation where the president admits that his threats to put Mark Zuckerberg in jail probably resulted in the end of fact checking at Meta. This is what autocrats do. Will the US be subject to other sorts of emerging market phenomena, like coups or hyperinflation or financial crises? Stay tuned.

Peter, it’s early days, but I challenge you to venture a few predictions for 2025. And to our readers — send in your own predictions and the questions you’d like to see us answer as a new administration begins.

Recommended reading

• I was moved by this New Yorker piece on how TikTok videos by Andean migrants, which show them living a fun life in New York City, encourage friends and family to migrate as well. The reality, as you might imagine, turns out to not be what it seems on social media.

• Good Wall Street Journal “Heard on the Street” analysis of why American home prices are 10-35 per cent above where they should be.

• Economists see their influence waning, according to the NYT. Maybe it’s because they are so often wrong, and yet won’t adjust their world view and leave the ivory tower.

• Peggy Noonan did the best piece I’ve seen on the attitude we should take towards Trump 2.

• And so many good things in the FT this last week, from my colleague Janan Ganesh’s piece on why the UK has some hard choices to make around growth, to the crisis of isolation shown in charts done by John Burn-Murdoch to a fascinating Big Read on why Broadway is lagging so far behind the West End.

  -

Peter Spiegel responds

Rana, having lived through the first Trump administration as an FT editor, the one thing I learned is that making forecasts about what he will do as president is a fool’s errand. He’s just too unpredictable, and what he says one day can become a policy that goes in the polar opposite direction the next.

He threatens Kim Jong Un with nuclear war, and then he embraces him at a summit meeting. He encourages cops to rough up criminal suspects, and then signs legislation to reduce sentences for non-violent offenders. He promises “infrastructure week”, then never delivers a legislative proposal. His politics defy prediction.

The one overarching, contrarian prediction I will make, however, is that Trump will suffer from his lame duck status far sooner than many people anticipate.

Second presidential terms are notoriously messy affairs. Even the most successful of two-term modern presidencies — think Ronald Reagan, Bill Clinton and Barack Obama — were significantly diminished the second time around either because of scandal or the natural congressional inertia that comes with a closing political window. There was Reagan and Iran-Contra, Clinton and Monica Lewinsky, and none of Obama’s legislative achievements came in his second term.

Trump has some advantages that Reagan, Clinton and Obama didn’t have. He has majorities in both houses of Congress, though they are very narrow. He also has a preternatural ability to control the Republican caucus — he was even able to influence party positions while out of office, a remarkable achievement for someone defeated for re-election — and many now in Congress owe their jobs to his long 2024 coattails.

But Trump will never appear on a presidential ballot ever again. The political laws of gravity eventually do their work on even the most popular of presidents, especially as both parties begin to think about 2028. And that is already happening.

Vivek Ramaswamy, the onetime Republican presidential candidate turned Trump loyalist, is already eyeing a run for governor in Ohio — even before his job as Trump-appointed efficiency officer had started. Nikki Haley, who outlasted the rest of the Republican field against Trump, has set up shop as a Trump interpreter for the consultancy Edelman, where she can rub shoulders with the kinds of corporate elites that she’d need to fund a 2028 run. Even Donald Trump Jr has gotten into the act, publicly advocating for his friend JD Vance as a 2028 candidate.

No president looks more powerful than he does on inauguration day. But for second-term presidents, each following day is one day closer to political irrelevance. I’m betting that will catch up with Trump sooner rather than later.

Your feedback

And now a word from our Swampians . . .

In response to “ What Los Angeles’s burning means for the nation”:
“Although it is only a small part of the US-wide and global problem, Los Angeles — with its absurd multi lane, postwar freeways — led the way in boosting greenhouse gases and climate change, and now the climate is taking its revenge. I’m sure Peter Spiegel is right that these fires and other disasters will not have much impact on Americans’ location decisions; but I wonder if there might possibly be some impact on the appetite for SUVs and pick-up trucks?” —Sam Dunkley