By: Paul Gallant, Chris Krueger, John Miller, Roman Schweizer, Jaret Seiberg, Rick Weissenstein
Feb. 12, 2025 - 2 minutes 30 seconds
Overview:
- Trump is comfortable pushing competing policies. This "Chaos premium" setting increases his leverage and keeps him at the center of the global policy zeitgeist.
- The debt ceiling and US$5 trillion+ tax cliff at year-end formulates the legislative agenda. Tariffs are the main policy lever, but rule changes take time.
- There's opportunity for geopolitical reset, but DOGE could remain a risk for U.S. defense in the long term.
- Trump may seek to dismantle the regulatory state constructed by the Biden administration while energy dominance and efforts to lead in Artificial Intelligence will animate the administration's approach.
The TD Cowen Insight
We suspect Trump is perfectly comfortable being a policy paradox pushing competing policies and people. The "Chaos premium" environment only increases his leverage in negotiations keeping him at the molten center of the global policy zeitgeist. Tariffs are the main policy lever, but rule changes take time.
Macro
We see seven policy priorities for the Trump administration:
- Deglobalization ("America First")
- Drill (energy dominance)
- Deregulation
- Deportation
- Deals (or tariffs)
- Debt... to finance tax extensions
- Department of Government Efficiency (DOGE)
How all these policies intersect and are sequenced largely determines the outcome. Reconciliation sequencing is critical for immigration, energy, tax and DOGE.
Geopolitics and Defense
Mideast, Ukraine, China and defense spending are crucial "first 100 day" topics. There is significant opportunity to reset geopolitics and clarify concerns about defense spending. The long-term issues are anxious allies, Taiwan uncertainty, Greenland, the Panama Canal and rebooting the Department of Defense (DoD). DOGE will remain the major risk for defense and U.S. government services companies until proven otherwise.
Financials and Housing
The first 100 days are about freezing financial rulemakings, especially those at the Consumer Financial Protection Bureau (CFPB) and the selection and confirmation of regulators. Housing focus will be on using the tax bill as a vehicle for tax credits to encourage entry-level home construction. The crypto sector should expect less enforcement from the U.S. Securities and Exchange Commission (SEC) as the agency awaits congressional action on the crypto market structure as soon as mid-2025.
Health Care
Republicans will not have much time to get settled as there are a myriad of issues left over from last year that need to be addressed early in the Trump administration. This includes extending the rare pediatric disease Priority Review Voucher (PRV) program, reauthorizing the Pandemic and All-Hazards Preparedness Act and the SUPPORT Act.
Energy Transition
We anticipate President Trump may seek to dismantle the regulatory state constructed by the Biden administration, announce a trade emergency alongside rates and timelines for tariffs on targeted imports and achieve progress toward a reconciliation bill in Congress. Dual themes of energy dominance (framed around producing more energy) and winning the Artificial Intelligence (AI) war will animate the Trump administration's approach.
Technology, Media and Telecommunications
We expect Trump's tech regulators to start making waves through initial moves and congressional testimony. Thematically, his picks for top jobs are already complicating our bull thesis for technology, media and telecommunications policy from 2025-2029.
Full report originally published January 16, 2025
Subscribing clients can read the full report, All Gas, No Brakes: Trump First 100 Days & Key 2025 Themes - Ahead of the Curve, on the TD One Portal