3 Things We Learned the First Week of the Trump Presidency
President Donald Trump signed more day-one executive orders than the last 10 presidents combined. While uncertainty is still elevated, below are three insights from the early days of his presidency:
1. A slew of executive orders
We believe some of these orders will have no economic impact, but others could affect markets:
• The labor market: Six orders focus on immigration, including stricter laws and enhanced visa vetting, with a national emergency declared at the southern border. Net immigration increased by 3.3 million on average in 2023–2024 – the largest in over 100 years. We think net immigration will cool to 500,000 in 2025 and 2026, potentially reducing the labor supply.
• Energy: The administration is promoting fossil fuels and discouraging renewables. Orders include boosting domestic energy production, halting offshore wind leasing and reversing drilling restrictions in Alaska, aiming to lower energy prices by increasing supply.
2. Tariff talk
President Trump threatened to impose tariffs on the U.S.’s top four trading partners: Mexico, Canada, China and the European Union. However, no immediate tariffs were enacted. As President Trump has previously indicated, tariffs can be used as a tool to raise revenues ahead of negotiations to extend Trump’s first-term tax cuts, which are expected to increase budget deficits.
Overall, the executive order lays the groundwork for potential future tariffs, with Trump using the threat of tariffs as leverage in international negotiations. While some threats may serve as leverage, significant tariff increases on China are anticipated.
3. “Star” lit pathway to deregulation
SoftBank, OpenAI and Oracle Corp. announced a joint venture called “Stargate” to build new infrastructure for OpenAI, including data centers and campuses. The initial investment is said to total $100 billion, with plans to expand to $500 billion over the next four years. We believe the infrastructure spending needed to support the scaling AI business is a theme with room to run. For data centers alone, electricity demand is projected to nearly triple by 2030.
The initiative was unveiled by President Donald Trump, but has been in the works since before his inauguration. The backing of the venture, which aims to boost U.S. leadership in AI, could be seen as a signal of the deregulation that the market has anticipated from this administration.
Rick Barragan is the Managing Director,
Los Angeles Market Manager, for J.P. Morgan Private Bank.
[email protected] | (310) 860-3658
privatebank.jpmorgan.com/los-angeles
Source: “The first days of the Trump Presidency,” by Alan Wynne, Global Investment Strategist, January 24, 2025
