Trump is Back! What Will His Inaugural Address Cover?

The United States is set to complete its presidential transition, with President Trump poised to deliver his inaugural speech. True to his style, Trump may sign a significant number of executive orders on his first day in office—possibly exceeding 100, far surpassing the 12 he issued in his first month back in 2016. The Ainvest team offers a forward-looking analysis of Trump's potential first-day actions:

America First Principles and Key Policy Themes

In his victory speech last November, Trump emphasized a continued focus on the America First agenda. It is anticipated that his inaugural address will reaffirm priorities such as tax cuts, deregulation, immigration restrictions, increased tariffs, and reduced foreign aid. Additionally, Trump may address strategies to curb inflation and mend social divisions.

Immigration Policy

During his campaign, Trump pledged to carry out the largest deportation of undocumented immigrants in U.S. history. Potential executive actions could include reversing Biden's deferred deportation measures, employing the military to expel immigrants with criminal records or deportation orders, accelerating backlogged immigration cases, and restarting construction of the U.S.-Mexico border wall. Other possibilities include reinstating travel bans on certain countries or even challenging birthright citizenship—though constitutional protections make the latter unlikely.

Market Impact: Restrictive immigration policies could slow U.S. population growth by 2025, exacerbating labor shortages. Companies may be forced to significantly raise wages to retain talent, potentially fueling a wage-inflation spiral.

Energy Policy

Trump and the Republican Party have long supported traditional energy industries, favoring oil, natural gas, and coal production. On his first day, Trump may rescind Biden-era restrictions on oil and gas drilling, open more federal lands and waters for exploration, restore critical fossil fuel infrastructure, and reinstate suspended LNG export initiatives. Policies could include lowering oil and gas royalty fees, eliminating methane emission penalties, and providing subsidies to reduce costs for fossil fuel companies. However, coal's lack of price competitiveness may limit its production growth despite potential regional subsidies.

Trump may also target the Inflation Reduction Act (IRA), aiming to retract unused clean energy subsidies. While executive orders cannot repeal laws passed by Congress, Trump could tighten IRA implementation through administrative action.

Market Impact: These measures would undoubtedly benefit traditional energy sectors while negatively affecting clean energy. However, oil price movements would still depend on market dynamics. Notably, the GOP is not entirely opposed to clean energy initiatives.

Tariff Policy

Trump has proposed creating an External Revenue Service to manage tariffs, import duties, and other foreign revenue—a promise he could fulfill on his first day. Ainvest anticipates that Trump's long-term tariff goals include reshoring manufacturing, leveraging tariffs in trade negotiations, and supplementing federal revenue to facilitate tax cuts. While Trump's previous administration saw a trade war with China, the current high inflation and Federal Reserve's tight monetary stance make large-scale tariff increases less likely in the short term.

Financial Regulation

Trump may reduce the authority of U.S. financial regulatory agencies on his first day, rolling back stringent oversight in areas such as cryptocurrency, mergers, antitrust enforcement, and AI development. This could expand cryptocurrency adoption and eliminate barriers to AI innovation. Trump may also lower subsidies under ObamaCare, reduce vaccine distribution, and restrict artificial food additives.

Market Impact: Bitcoin recently hit a new high, reflecting optimism about deregulation. However, much of the positive sentiment may already be priced in, raising the risk of a buy the rumor, sell the news scenario.