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The Trump effect continued to impact the economy and the financial markets in the first quarter, but then dissipated somewhat. The U.S. stock market did not perform as well in June, and some recent indicators came in below expectations, suggesting that U.S. gross domestic product (GDP) could be slowing again, as was the case in the first three months of 2017.

Most analysts blame the new U.S. president for this situation, specifically the fact that he has not met the market’s expectations. To date, after 161 days in office, the Trump administration has a rather mixed record, and the lack of cabinet consensus, as well as the controversial decisions being made, is generating confusion, uncertainty and volatility.

Here are some of the stumbling blocks faced by Donald Trump in the first half that are weakening his position, while raising doubts about his ability to implement his economic program.

  • Inability to put in place the pro-growth measures that helped get him elected and that sparked business and investor optimism (tax cuts, massive infrastructure spending and other).
  • Difficulties getting healthcare reforms passed.
  • Suspension of two versions of the immigration order barring entry into the country of nationals from six Muslim countries, and acceptance of a partial version.
  • Accusations of attempts to obstruct justice in the investigation of his former National Security Advisor and confusion about the events that led to the firing of the FBI Director.
  • Approval of various controversial pipeline projects.
  • Increase in defence spending and cuts to spending on medical research and the environment.

Is the United States headed towards isolationism?
While the United States has always been known as a global leader that many countries could rely on, both politically and in terms of trade, it seems clear that President Trump wants to call into question America’s role on the world stage. Using slogans like “Make America Great Again!” and “America First!” he has taken numerous actions:

  • decisions based first and foremost on the well-being of American workers and their families
  • withdrawal from the Trans-Pacific Partnership and the Paris Accord on climate change
  • renegotiation of NAFTA
  • eventual introduction of a border tax to encourage businesses to move their manufacturing activities back to the United States
  • imposition of countervailing duties as high as 30% on Canadian softwood lumber
  • eventual construction of a wall between the United States and Mexico

The next decisions of the U.S. leader bear close watching to see if his intention to put the interests of the American people first will harm the relations that the U.S. has established with countries which, over the years, have become key partners.

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