CITIC SEC: How will the "100 Day New Policy" of Trump unfold?

CITIC SEC released a research report stating that on January 20, local time, Donald Trump was officially inaugurated as the 47th President of the United States, and after his inauguration speech, he outlined a "100-day new policy" framework titled "President Trump's American Priorities." Subsequently, Trump signed over 40 executive orders covering areas such as border security, social issues, energy, industry, and government reform. The main points of CITIC SEC are as follows: After taking the oath of office, Trump officially announced his "100-day new policy" priorities and signed a series of executive orders on the day of his inauguration, prioritizing domestic and economic issues over foreign issues. On January 20, local time, Trump was officially inaugurated as the 47th President of the United States and outlined a "100-day new policy" framework titled "President Trump's American Priorities" after his inauguration speech. Subsequently, Trump signed over 40 executive orders covering various aspects such as border security, social issues, energy, industry, and government reform. In one of the executive orders, Trump also revoked nearly 80 presidential executive orders and memoranda signed by former President Biden at once. It is worth noting that regarding the tariff issue, Trump has only signed a memorandum titled "America First Trade Policy" so far, without taking formal tariff actions externally. Overall, his short-term policy thinking prioritizes domestic and economic issues. In terms of social policies, Trump announced a series of policies under the theme of "Making America Safe Again" and "Reviving American Values" related to immigration and values issues. On immigration, Trump declared in the "100-day new policy" document and a series of executive orders that the southern border of the United States is in a state of national emergency; measures will be taken to stop, detain, and deport illegal immigrants; the termination of Biden's "catch-and-release" policy; the revival of the "Remain in Mexico" policy; the construction of a border wall; enhanced screening of foreigners entering the United States; the suspension of refugee resettlement and a restructuring of the U.S. refugee admission program; the deployment of armed forces to the border including the National Guard; authorization of the U.S. Northern Command to blockade the border; designation of Mexican cartel drug trafficking groups as foreign terrorist organizations and their removal under the Alien Enemies Act; the termination of birthright citizenship for children of illegal immigrants or temporary visa holders, among others. On issues of societal values, Trump proposed a revival of American values in the "100-day new policy" document and signed two executive orders declaring that the U.S. government will only recognize two genders - male and female; ending the "radical and wasteful" diversity, equity, and inclusion programs within federal agencies. In terms of domestic political reforms, Trump's policy focuses on optimizing the functions of the federal government, enhancing administrative efficiency, and strengthening accountability mechanisms. On his first day in office, Trump signed nine executive orders and five presidential memoranda to advance domestic political reforms. The executive orders include ending unconstitutional scrutiny of government speech; suspending the issuance of new regulations to ensure existing regulations align with national interests; implementing a freeze on federal hiring to optimize human resource allocation; strengthening accountability in policy positions to enhance the management efficiency of senior federal officials; reinstating the federal death penalty policy to strengthen deterrence against serious crimes; abolishing wasteful diversity, equity, and inclusion projects and reverting to a performance-based management mode; reforming the federal hiring process to shorten recruitment cycles and optimize evaluation criteria; restoring historic landmark names, such as renaming "Mount McKinley," to reshape national identity. The presidential memoranda include addressing the backlog of security clearances to ensure administrative efficiency, establishing the Department of Government Efficiency (DOGE) to optimize government operations through technological modernization, and encouraging public participation in the naming process of national landmarks to enhance transparency and representativeness. Additionally, Trump has instructed federal employees to end the telecommuting model and quickly return to on-site positions to improve government efficiency and restore face-to-face collaboration. Regarding energy, Trump declared a national energy emergency for the United States and signed a series of executive orders to unleash American energy potential, but policies involving legislative amendments, budget adjustments, or new subsidies still require congressional support. In the "100-day new policy" document, Trump proposed to end Biden's policy of "climate extremism," streamline energy approval processes, rescind regulations that burden energy production and use, declare a national energy emergency for the United States, utilize all necessary resources to build critical infrastructure to accelerate fossil fuel and critical mineral production, loosen energy efficiency standards for a range of consumer products to empower consumers with choice, terminate the leasing of large wind farms on federal lands, and withdraw from the Paris Agreement. Additionally, on his first day in office, Trump issued several executive orders related to the energy sector, including encouraging energy exploration and production on federal land and waters, unlocking the resource potential in Alaska, relaxing energy regulations, canceling the electric vehicle mandate, preventing "extreme environmentalism," temporarily halting offshore wind leasing on federal lands, conducting a review of federal leasing and permitting for wind projects, and ensuring compliance with the "America First" principle in international environmental agreements. Looking ahead, policies involving budget adjustments, traditional energy tax cuts, and subsidies still require congressional approval and are subject to certain controversies. For example, in the clean energy sector, investments driven by the IRA Act mainly focus on red states and swing states, may not be completely repealed under congressional resistance, but certain high-cost and unimplemented provisions may be adjusted. In terms of economic policies, Trump aims to reduce the cost of living for Americans and break free from the constraints of the OECD on U.S. tax policies to create room for domestic tax reduction policies. However, tax reduction legislation still requires cooperation from Congress, and while Republicans in Congress generally support it, there are differences in the specific legislative procedures, making it difficult for the House's "omnibus" rapid legislation to be implemented in the short term. In the "100-day new policy" document, Trump proposed that "all agencies will take emergency measures to reduce the cost of living," that "the United States will no longer be bound by foreign organizations on our national tax policy," and that "the United States' tax policy is punishing American businesses," aiming to reduce inflation and promote tax reduction policies.Therefore, Trump signed two memorandums on the same day, requiring all heads of executive departments and agencies to provide emergency price reductions to the American people in accordance with applicable laws, and the US will notify the OECD's Global Tax Agreement that it is not effective within the US. Looking ahead, Trump's proposed tax reduction policy still needs cooperation from Congress. Speaker of the House Mike Johnson hopes to complete a comprehensive "package deal" on energy, borders, and taxes by February 2025, pass it in the House in early April, and submit it to the President before the end of April. However, Senate Republicans are mainly concerned that if all the content is included in one bill, some provisions may be affected by others, leading to greater resistance. Considering that the tax bill involves more complex tax and spending plans, and is more vulnerable to attacks from Democrats, CITIC SEC predicts that rapid, comprehensive legislation may be difficult to implement in the short term.In terms of foreign policy, Trump has established a "America First" policy tone, and has issued executive orders on specific matters such as withdrawing from the WHO, exiting the Paris Agreement, adjusting foreign aid, renaming the Gulf of Mexico, and postponing the TikTok ban. In the "First 100 Days" document, Trump directed the State Department to implement an "America First" foreign policy to set the tone for U.S. foreign policy for the next four years. At the specific level of foreign affairs, Trump issued a series of executive orders, including announcing the U.S. withdrawal from the World Health Organization (WHO); exiting the Paris Agreement under the United Nations Framework Convention on Climate Change; renaming the Gulf of Mexico as the American Gulf; suspending U.S. foreign development aid for 90 days, during which aid programs will be reassessed and reviewed; and postponing the implementation of the TikTok ban for 75 days to "seek a solution that can both protect national security and save the platform used by 170 million Americans." In terms of trade policy, Trump signed a memorandum on "America First Trade Policy," which may focus more on deeper "economic balance," and may take measures such as establishing a "Foreign Taxation Bureau" to achieve this. Trump signed a memo titled "America First Trade Policy," the first part of which shows that the core goals of Trump's new term trade policy are to promote U.S. investment and productivity, enhance U.S. industrial and technological advantages, and defend U.S. economic and national security. The fourth part of the memo mentions that Trump has instructed the Commerce Department and the Department of Homeland Security to assess illegal immigration and fentanyl flows from regions such as Canada, Mexico, and China, and to recommend appropriate trade and national security measures to address these issues. The second part of the memo mentions Trump's approach to addressing "unfair and imbalanced trade issues," instructing federal agencies to conduct in-depth research on trade policy and conduct comprehensive evaluations of U.S. trade relations with other countries, but will not immediately impose new tariffs on the first day in office, showing a relatively cautious policy implementation compared to previous extreme expectations. According to the memo, the specific ways to address "unfair and imbalanced trade issues" include establishing a "Foreign Taxation Bureau" (ERS) specifically responsible for imposing tariffs and other related taxes on imported goods, initiating a public consultation process for the U.S.-Mexico-Canada Agreement (USMCA), reviewing and evaluating the exchange rate policies of key U.S. trading partners, and evaluating the current implementation of the "duty-free and inspection-free" measure for packages under $800. Based on this, CITIC SEC believes that Trump's new term tariff policy in the economic field may focus more on so-called industrial policies and "structural reforms," while in non-economic fields, it may focus more on global geopolitical hotspots and cooperation on drug control, different from the previous term's emphasis on bulk purchases. Risk factors: U.S. economic conditions deteriorate beyond expectations; escalations in U.S.-China competition beyond expectations; global geopolitical situations deteriorate beyond expectations; heightened risks of trade tariffs.