US: Next week poses an important test for Trump administration - BBH
|Analysts at BBH suggest that in the US, Trump's populism-nationalism has been retracted in several areas of foreign economic policy, but next week poses an important test.
Key Quotes
“An important issue is the border adjustment (a tax on imports and no taxes on exports). Leave aside the fact that the WTO allows for border adjustments for taxes but not for trade and the legal challenges that most likely would ensue; it does not appear that in its present form it can be approved by a simple majority in the Senate. Treasury Secretary Mnuchin gave the noncommittal response yesterday about it and the strong dollar policy: There are good and less good consequences. However, late yesterday, Trump said he supports some kind of border adjustment, though he and Mnuchin noted the complexity of the current approach.”
“The largely inexperienced Trump team has their hands full. There is the confirmation process for a Supreme Court justice. There is the repealing and replacing of the national health care. The debt ceiling and spending authorization limits are being approached and will need to be addressed. Mnuchin indicated yesterday a desire to see the tax reform before Congress' August recess. That means that impact is more of a 2018 event and the same goes for the infrastructure initiative. Politically it may be more desirable to wait for next year and deliver the Democrats (and less sympathetic Republicans) a fait accompli during the off-year election period. Could they, would they deny Trump of success by blocking fiscal stimulus that creates jobs?”
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