BURSTEconomic policy during President Trump’s first hundred days in office has been anything but business as usual.
Trump’s tariffs have reset global trade relations and put businesses and investors in thrall to the administration’s every move.
Trump has blitzed regulatory agencies and ordered wide-ranging government layoffs, taking the “move fast and break things” mantra espoused by his supporters in the tech world to new extremes. The whirlwind cadence of orders and reversals has left U.S. economic allies and adversaries alike trying to figure out where Trump’s policies are going to land.
Even U.S. financial assets — traditional safe havens in times of economic distress from recessions to wars — have shown signs of weakness.
Here’s a look at the effect Trump’s policies have had on the economy during his first hundred days.
Century-high tariff rates
The overall U.S. tariff rate stands above 25 percent, the highest level in more than a century, according to an analysis by the International Monetary Fund (IMF).
Major components of the overall tariff rate include a 145 percent tariff on China, a 10 percent general tariff, and targeted tariffs on lumber, automobiles, metals and other goods.
Monetary authorities have painted a stagflationary picture of the import taxes, with groups from the IMF to the Federal Reserve saying they expect higher prices and lower economic growth as a result.
“[The tariff level] on its own is a major negative shock to growth,” IMF economists wrote in an April economic outlook.
Trump has delivered his tariffs in fits and starts, issuing orders followed by quick reversals on multiple occasions.
Cancellations include 25 percent tariffs on Canada and Mexico, the end of the de minimis exemption on shipments from China worth less than $800, and the pause of country-specific tariffs of various rates on dozens of U.S. trading partners. The Commerce Department on Tuesday also scaled back its tariff on auto parts scheduled for May 3.
“This is intended to keep [trading partners] off-balance,” Bill Reinsch, chair of international business at the Center for Strategic and International Studies, told The Hill. “It allows the U.S. to take a maximalist position and then to fall back from that, which is Trump’s normal style.”
Wall Street investors have blasted the tariffs. Billionaire hedge fund manager Bill Ackman said Trump’s country-specific tariffs were based on “bad math” and that it was “taking the global economy down" before praising his eventual loosening of tariffs.
The Dow Jones Industrial Average of major U.S. stocks has lost about 8.4 percent of its value since Trump has taken office, and the S&P 500 has lost about 8.7 percent. The tech-heavy Nasdaq Composite has lost more than 12 percent of its value.
Resetting trade, shaking up international relations
Trump’s tariffs have taken aim at U.S. economic rivals and allies alike, deepening tensions with adversarial countries like China and creating new ones with longstanding partners like Canada, Mexico and the European Union.
China has vowed to fight the trade war “to the end” and is saying it’s up to the U.S. to make the first move.
“This tariff war is launched by the U.S. If a negotiated solution is truly what the U.S. wants, it should stop threatening and exerting pressure, and seek dialogue with China,” Chinese Foreign Ministry spokesperson Guo Jiakun said Tuesday.
Experts say that delegations meeting with Trump don’t understand what he’s actually seeking from the trade war.
“I had some conversations with foreign parties this morning and last week,” Reinsch told The Hill. “They’re saying, ‘he didn’t bring up X, he didn’t bring up Y, which we’d expected him to bring up — so what’s going on?’”
Production and supply chain experts say they’re seeing new foundations for a multipolar global trading system being laid, as distinct from the monistic trade arrangement embodied by the World Trade Organization (WTO) that was the culmination of post-war U.S. trade policy.
“Most people I talk to think we’re heading toward a bipolar trade system,” Tom Derry, CEO of the Institute for Supply Management, told The Hill in an interview. “It’s not a WTO-centered, single, consensus-driven set of rules around trade, but rather a Western-centered, maybe U.S.-led trade bloc and an Eastern-centered, China-led trade bloc.”
A flight from U.S. financial assets
Perhaps the surest sign that Trump is making big changes to the global economy has been the simultaneous drop in the value of the U.S. dollar relative to other currencies and the sell-off in the market for Treasuries.
Usually, investors run to U.S. assets in times of economic uncertainty, a tendency that has withstood shocks from the Sept. 11, 2001, terror attacks to the Great Recession.
But the benchmark U.S. dollar index has fallen consistently since Trump took office and has experienced notable drops immediately following tariff announcements on April 2 and April 9.
Bonds also sold off immediately after Trump’s April 2 “Liberation Day” tariff announcement, spurring the administration to declare a 90-day pause on the country-specific tariffs on the same day they went into effect.
The gap in yields between U.S. Treasuries and German Bunds increased as the euro rose against the dollar — an unusual pattern that economists immediately picked up on.
“The euro rose sharply against the dollar even as the yield spread between the two-year Treasury note and two-year German bund rose above 200 basis points, indicating a break in usual market dynamics and suggesting a capital flight away from the U.S. and towards Europe,” University of Tampa economist Vivekanand Jayakumar wrote in an opinion piece this week.
Migration patterns and the labor market
Trump has also worked to stop migration flows with amped enforcement along the southern U.S. border, which the United Nations describes as the world’s “deadliest migration land route.”
There were 1.3 million border encounters at this point in fiscal 2024, according to U.S. Customs and Border Protection, along with 1.2 million in 2023. This year, there have been 381,000.
Migrants have been a significant factor in U.S. labor force dynamics in recent years, affecting growth forecasts and even price levels, as well.
Fed Chair Jerome Powell noted last year that differences in immigration measurements may have been the reason that the 2024 economy significantly outperformed expectations when many were expecting a recession.
“That actually explains what we’ve been asking ourselves, which is how can the economy have grown over 3 percent in a year when almost every outside economist was forecasting a recession?” Powell said last April, referring to migration.
Less migration could mean a more restricted labor force in the long term and along with dampened growth — costs that conservatives say are worth paying in the interest of American workers.
“If you give companies the ability to hire illegal workers, which is to say, workers that they can break labor laws on and not have to pay full tax burdens on, then it’s effectively a government subsidy to hire those illegal workers,” Richard Stern, director of the Heritage Foundation’s budget center, told The Hill.
Asked about administration initiatives that were spelled out in the programmatic Project 2025 document that the Heritage Foundation had a significant role in writing, Stern said things were “on track.”
“When you look at the first 100 days, looking at the parts of the project that are easily doable by the administration, we’re definitely on track with a lot of the major parts of that,” he said.
Gutting the IRS ahead of tax cuts
Trump and the Department of Government Efficiency (DOGE) — the cost-cutting panel led by Elon Musk — have made cuts to federal agencies, including the U.S. Agency for International Development, the Consumer Financial Protection Bureau and the Department of Education.
Some conservatives have dismissed the DOGE efforts as political theater. Jessica Riedl, a senior fellow at the fiscally conservative Manhattan Institute, told Reuters that “DOGE is not a serious exercise” while predicting it will end up costing more than it saves.
But DOGE staffing cuts at the IRS, which number more than 12,000 and could eventually take away between a quarter and 40 percent of the agency’s workforce, could have a real effect on government revenues and where exactly they come from.
This is especially in light of the massive operational refurbishment that the IRS had started under the Biden administration and that the Trump administration has entirely reversed.
“They’ve fired thousands of people and thousands more have quit. The damage it’s going to do to the income tax system is incalculable — literally, because we don’t know what they’re doing,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, told The Hill.
The IRS has had five commissioners since Trump took office again in January, a rate of turnover Gleckman described as “remarkable.”
The hollowing out of the IRS comes as Republicans in Congress work to extend their 2017 tax cuts and add new and untested cuts to the mix, which Trump promised on the campaign trail.
The final package could add trillions to the deficit — with an additional $4.6 trillion deficit expansion that looks set to be ignored in the official accounting.