Trump’s Big First Day of Economic Policy 

On January 20th, shortly after taking his oath of office, President Donald Trump took his pen in his hand and put it to good use, initiating 46 executive actions before day’s end. These actions spanned a wide range of policy areas, with far-reaching repercussions for taxpayers and consumers. Many are excellent policy reforms; others will likely prove harmful.  

For those trying to make sense of the world, here is the Taxpayers Protection Alliance (TPA)’s breakdown of economically significant actions. 

The Campaign to Lower the Cost of Living 

Right off the bat, the Trump Administration recognizes that a lot of the economic woes that Americans endured in recent years are thew product of government overreach and regulation. From costly energy mandates to efficiency standards to painfully slow permitting regimes, regulations have added unnecessary friction that ultimately reduces the supply of goods that Americans need, such as houses, energy, and basic appliances.  

With this executive order (EO), Trump has directed a mandate to all executive departments and agencies to “deliver emergency price relief.” However, the order lacks much detail on what such relief would look like. The deregulatory spirit present throughout the order provides encouraging signs that it will aim to dismantle unnecessary red tape, but the language remains vague. Hopefully the new Administration will reverse the subsidy-heavy approach that characterized the past Administration and instead focus on unlocking America’s productive power by removing regulatory constraints. 

Cracking Down on Federal Censorship 

One salutary EO was titled, “Restoring Freedom of Speech and Ending Federal Censorship.” This order acknowledged the actions taken by the Biden administration to influence social-media platforms’ content-moderation practices, of which many violated the First Amendment. The order then declares it the policy of the United States to “ensure that no Federal Government officer, employee, or agent engages in or facilitates any conduct that would unconstitutionally abridge the free speech of any American citizen.” That such a declaration should be unnecessary doesn’t lessen the importance of the Trump administration issuing it. 

Social-media platforms have a First Amendment right to moderate their content as they see fit, without the government intervening with coercion or other impermissible influence. President Trump’s EO bars the government from those exact types of attempts to bully social media. In the Biden era, the government leaned hard on platforms, attempting to pressure them into blocking or disfavoring officially disfavored user speech (often with success). 

Preventing this sort of state manipulation leaves social media companies free to experiment and adjust to the preferences of their users. In the marketplace of ideas — as in other markets — individuals, not politicians or bureaucrats, should be the ones to choose winners and losers. A freer and more dynamic internet will both produce a better user and experience and be a more reliable source of information and analysis.  

Energy! Energy! Energy! 

President Trump outlined specific rules and policies to stimulate energy exploration and production. He underlined the encouragement of energy production on federal lands, rare earth mineral production, and the need to enhance competitiveness through consumer choice. Deregulating to stimulate production in the energy sector is crucial to ensuring American prosperity. He also emphasized an agency review of regulations on natural resources. These are positive developments that emphasis economic growth through energy production, without the limitation on various resources. The emphasis on expediting infrastructure projects, simplifying permitting processes, and terminating mandates on electric vehicles is an additional positive push for diversity in energy production. Additionally, another EO was included to allow Alaska to develop its natural-resource production on federal lands. 

While all these inclusions are positive in the push to expand energy production, President Trump chose to declare a “national energy emergency.” Although well-intended, the overuse of the term “emergency,” often used to unlock additional executive powers, poses a danger to America’s constitutional balance. Congress, not the Presidency, is the institution intended to drive policymaking. Moreover, even without declaring an emergency, President Trump has myriad options to rollback stultifying regulations imposed by Joe Biden and other former presidents. For example, President Trump’s orders signal that he is taking seriously the need to reform the federal government’s current dysfunctional permitting processes. He also can work with Congress to develop policy that falls outside the boundaries of his ordinary executive authority. 

President Trump also included an EO that withdraws wind energy leasing in the Offshore Continental Shelf (OCS) and prevents consideration for new or renewed wind-energy leasing within the OCS. This restrictive policy does not allow for the continued development of wind-energy production. Creating additional regulations for a specific energy resource is detrimental to innovation and supply chains. Maintaining a resource-neutral approach to energy production will benefit all American consumers.  

President Trump should prioritize developing effective policy by working with lawmakers instead of declaring national emergencies. He has made clear that his administration will work to unleash energy production, which will benefit businesses and expand consumer choice. Allowing markets to function freely and choose winners and losers while reducing regulatory burdens and fostering technological development can provide a more robust and diversified energy future for the U.S.  

New Trade Investigations 

President Trump directed his administration to investigate the U.S. trade deficit and its effects, the trade practices of trading partners, and other trade-related issues, particularly those involving China. The outcome of these investigations is all but assured — the administration will raise tariffs. Indeed, Trump campaigned on protectionism, and on Inauguration Day, he said he planned to lay 25-percent tariffs on Mexico and Canada on February 1.  

However, just as President Trump’s mind is made up in favor of tariffs, the economic evidence is arrayed against them. Tariffs, like any tax, raise the price of the affected goods. This means higher input costs for American businesses and higher retail prices for American consumers. Moreover, despite the fascination it holds for many, the trade deficit is not, per se, a bad thing for the American economy — and it is unlikely to be reversed solely by tariffs. In fact, the trade deficit was higher in 2023, after about five years of heightened tariffs, than in 2017, the last full year Trump began imposing them.  

“I am establishing a robust and reinvigorated trade policy that promotes investment and productivity, enhances our Nation’s industrial and technological advantages, defends our economic and national security, and — above all — benefits American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses,” Trump’s directive said.  

 The trouble is that the tariffs Trump imposed in his first term — most of which Joe Biden retained and built upon — did far more harm than good. In terms of their effect on the economy as a whole, they lowered GDP, capital stock, and employment. In terms of their specific effect on American manufacturing, it seems likely that the 45th president’s tariffs stifled productivity. Likewise, the high costs that followed his steel and aluminum tariffs appear to have destroyed 75,000 American manufacturing jobs while saving less than 2,500 in the protected industries. 

Tariffs do not, in fact, put America or Americans first. While the intent behind them (to strengthen the American economy) is noble, their effects are disastrous. TPA urges President Trump to reverse course on tariffs, which will impose economic costs, harm American businesses and consumers, and counteract the many economically beneficial parts of his agenda. 

Rescinding Biden-Era Executive Actions  

President Trump rescinded 78 executive actions taken by Joe Biden. Among these are: 

Artificial Intelligence: Repealing the Biden administration’s EO on artificial intelligence (AI) systems is a welcomed first step to unraveling the burdensome regulatory environment that characterized the past administration’s approach to AI. Biden’s EO was widely regarded as the overreach of the executive to micromanage the development of AI through an overgenerous interpretation of the Defense Production Act. The EO largely focused on creating new AI-specific bureaucracy at the federal level, directed various federal agencies to create and implement AI-related rules, and establish a reporting and disclosure requirements for AI developers. 

While an important first step, the real impact of the repeal could be fairly limited, while also raising additional questions. Various agencies have already published their own AI rulemakings, and they will stay in place unless they are formally withdrawn. This would have to be on a case-by-case basis under the discretion of each individual agency or department head. Additionally, there is a lack of clarity over the future of AI-specific federal bureaucracy, such as the AI Safety Institute and the National Artificial Intelligence Research Resource. While the mandate to create these offices is gone, they remain under the purview of other agencies such as the National Institute of Standards and Technology and the National Science Foundation, so additional actions would be necessary to wind them down.  

However, this rescission is a positive first sign to show that this administration is looking into a light-touch, pro-innovation approach to AI development.  

Regulatory Review: The Biden administration’s proclivity to disregard efficiency and cost-benefit analysis in its executive action was present at various instances, from antitrust enforcement to regulatory review. Notably, the administration introduced spurious “equity” considerations to the regulatory review process in an EO published in April 2023. The regulatory review process has been characterized as an important stopgap to ensure that the fiscal impact of any new regulations is properly assed. The Biden EO had unduly expanded the scope of the process, adding hard-to-measure, easily politicized considerations, while also slowing the process by requiring input from “underserved communities.” 

The decision to walk back these changes is the correct one. Removing the community input requirements and constraining the review process to factual cost-benefit factors is a welcomed change to streamline the review process while providing clear, comprehensible evaluations of proposed rules. The rescission would also lower the threshold that triggers the review process to its original $100 million, instead of $200 million. The increase enacted by the previous administration was an irresponsible attempt to limit oversight on potentially harmful regulations. 

Restrictions on Oil and Gas Leases on U.S. Coasts: The overt hostility of the Biden administration towards fossil fuels was evident throughout the former president’s entire tenure. This costly approach, which hamstrung America’s energy capacity and might have caused potential long-term damage to the American economy, was largely based in restricting oil and gas supply via mandates or overly stringent regulations. It should come as no surprise that the Administration continued to push its agenda even in its final days. Earlier this month, Biden signed a memorandum that withdrew various U.S. coasts from consideration for oil and gas leasing. 

As the Trump Administration seeks to set up an energy-abundant future, the rescission of the memorandum is a great step to unlock the country’s energy capacity. 

America Withdraws from the World Health Organization 

The United States is once again leaving the World Health Organization (WHO). In his EO triggering the withdrawal, President Trump cited the organization’s “mishandling of the COVID-19 pandemic…and other global health crises.” He also criticized the WHO for failing “to adopt urgently needed reforms” and its “inability to demonstrate independence from the inappropriate political influence of member states.” Perhaps most notably, Trump scrutinized the U.S.’s financial contributions to the WHO, stating that the organization “continues to demand unfairly onerous payments from the United States, far out of proportion with other countries’ assessed contributions.” Specifically, he highlighted that China “contributes nearly 90 percent less [than the U.S.] to the WHO.” 

The EO echoes Trump’s actions in 2020, when he initially pulled the U.S. out of the WHO, only for the decision to be reversed by then-President Joe Biden. Under the current withdrawal, the U.S. has one year to formally leave, with Trump directing Secretary of State Marco Rubio to oversee the American exit. 

The WHO has long benefited from U.S. participation and funding, despite its questionable track record. The organization faced significant criticism for its handling of the COVID-19 pandemic, including ignoring warnings from Taiwan in December 2019, falsely tweeting that there was “no clear evidence of human-to-human transmission” of the virus, and praising China, which downplayed the severity of the outbreak and suppressed its own doctors. 

TPA has long called for reforms to the WHO, particularly with respect to its tobacco control policies. While the U.S. is not a party to the Framework Convention on Tobacco Control (FCTC), the WHO’s disregard for science in international discussions about reducing smoking rates is concerning. The FCTC undermines the sovereignty of its member states and promotes draconian, prohibitionist policies that often cause more harm than good.  

With the U.S. leaving the WHO again, there is hope that other countries will reevaluate their investments in what many see as a flawed and corrupt public health organization. 

Conclusion 

One thing that seems certain is that the second Trump administration entered office primed and ready for action. It has a tremendous potential to reverse Joe Biden’s disastrous attempts at central planning and to restore economic freedoms that allow markets — i.e., individual Americans — to make their own opportunity and prosperity. President Trump and his team simply need in to lean into their impulse that the fundamental thing wrong with American government today is that it attempts to micromanage the choices of the American people, who are far more qualified for the task of running their own lives than any politician or bureaucrat. 

President Trump has many good ideas to boost the productivity and output of the American economy. TPA looks forward to four years working with Congress and members of the Trump administration to lighten the load of government that has been foisted on American taxpayers and consumers.