By Lydia DePillis
During his first week in office, President Donald Trump issued a barrage of executive orders, signing sweeping directives on immigration; diversity, equity and inclusion; energy policy; trade; TikTok; and more. The blizzard of activity — some of which is bound to be challenged in court — was overwhelming. Here’s a summary.
Tariffs and the economy
Trump had long threatened to enact tariffs on Day 1 in office. Five days and dozens of executive orders later, there’s surprisingly little to show.
The good news: That’s delighted market watchers. The S&P 500 hit a fresh record this week, bolstered by a slew of solid corporate earnings, and a calm settled over the Treasurys market that suggests investors no longer see Trump tariffs as an immediate threat.
The less-good news: Although Trump himself has softened his tone on tariffs, analysts still think he’s likely to slap them at least on China (Goldman Sachs economists this week gave it 70% odds). Tariffs could lead to a wider trade war that saps global growth and potentially accelerates inflation.
What we’re watching: What will the Fed say next week about economic growth, and will inflation concerns force it to stand pat on interest rates? Will Trump ignore the warnings anyway? After all, he does see tariffs as a revenue-driver, and he’s already put Jay Powell, the Fed chair, on notice about interest rates. “If I disagree, I will let it be known,” he told reporters this week. — Bernhard Warner
Diversity, equity and inclusion
Trump made it clear his attacks on diversity, equity and inclusion programs won’t be restricted to the federal government. On his second day in office, he instructed agencies to identify targets for “civil compliance investigations” related to their DEI practices.
Companies were already rethinking their approach to DEI. Lawsuits, social media influencers and conservative politicians have led companies like Walmart, Meta and Ford to roll back their diversity commitments. Trump’s order adds to the pressure. On Friday, Target said it would halt its DEI programs.
In general, legal experts consider policies that provide opportunities or benefits to a specific group based on race or gender to be vulnerable.
What we’re watching: Executives are anxious to find out which agencies will conduct investigations and enforcement actions and what they may do to make examples out of target companies, said Jason Schwartz, the labor and employment co-chair at the law firm Gibson Dunn. But the biggest question in boardrooms is which companies will be the first targets. Schwartz said checking the list of “woke companies” on the website of America First Legal, a Trump-aligned group, might be “a good starting place for hints.” — Sarah Kessler
Always dealing
If there’s one organizing principle driving the Trump administration, it’s the man himself. His litany of threats and initiatives, from tariffs to corporate investment to the border, are all tied together. They’re targets for a deal, and he’s the deal-maker in chief.
Still going off script. In what was meant to be a promotional appearance by the president at the Davos economic forum, Brian Moynihan of Bank of America lobbed a softball question — but Trump, joining via satellite, lashed out at the executive, accusing him of debanking conservatives and other supporters. Moynihan seemed to ignore the comment (or didn’t hear it), but the debacle highlighted the pitfalls of trying to work with Trump. A House committee is now investigating the issue.
Asymmetric deal-making. Tariffs are more than just ploys to raise revenue. Trump uses them as an all-purpose cudgel, linking tariffs to immigration or the sale of TikTok. His threat of a 25% tariff on Mexico, for example, was aimed at tightening the U.S. border against immigrants and drugs, not unfair trade. Trump threatened a 100% levy on China if Beijing refused to sell TikTok to a U.S. company.
The Elon Musk factor. Both Trump and the richest man in the world crave the spotlight, and they might soon find the world stage too small to share. One of the first fissures came a day after Trump was sworn in, when Musk dismissed a $100 billion artificial intelligence initiative that was the president’s first major tech deal. Trump said he wasn’t bothered by it, but his staff was.
What we’re watching: Business leaders have been bullish over a Trump administration that plans to lower taxes, loosen regulations and allow for more deal-making. But at what point do Trump’s whims become a liability for business and the markets? — Edmund Lee
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