Which Donald Trump will govern the second time around?
Investors are hoping for Businessman Trump, who favors deregulation, tax cuts, low interest rates, abundant energy, and steady markets.
But they might get Populist Trump, who wants to deport migrant workers, tax imports to the hilt, and enact other protectionist policies that could depress growth, raise costs and stoke inflation.
Then there’s Madman Trump, the bomb-thrower who threatens to invade Greenland, annex Canada, reclaim the Panama Canal, and sow chaos. Can all these personae exist within one president?
It’s Donald Trump — so of course they can. Making the main challenge for investors and business operators during his second term sussing out which of Trump’s competing impulses will most influence the economy.
To help clear some of the fog, we’ve assembled a guide to touch on every issue investors care about, with insights and handicapping on the most likely outcomes.
Trump will start out with one crucial thing going for him: He’s inheriting a solid economy with strong job growth and inflation far below its 9% peak in 2022.
Many economists think Trump will harm the economy with an aggressive protectionist agenda that reignites inflation. But it’s also well known by now that Trump makes a lot of threats he doesn’t fully act upon. So there’s a good chance his tariff and deportation plans won’t be as draconian as some fear.
Trump will also face challenges he didn’t face when his first term started back in 2017.
Inflation has dropped, but it’s still a nagging concern. The gigantic national debt might finally be rattling markets, which could constrain Trump’s ability to pass new tax cuts and other legislation that adds to the debt. Russia’s war in Ukraine, fresh violence in the Middle East, and China’s military buildup mark a more dangerous world than Trump faced eight years ago.
Trump also plans to modify or reverse some Biden policies on energy, cryptocurrency, healthcare, immigration, consumer protection, and elements of technology. In some cases, Trump will make an immediate difference; in others, he’ll run into resistance from Congress and legal challenges. This weekend’s TikTok back-and-forth, for instance, sets up an early, high-profile standoff between Trump and his colleagues on the Hill.
How markets react to Trump’s policies will also impact his agenda in ways both predictable and surprising. And the influence of Trump’s new close confidant, Tesla CEO Elon Musk, is sure to bring plenty of the latter.
The world’s richest man clearly has Trump’s ear, and will wield some of this influence by running a new efficiency commission meant to remake the federal government, which is already doing field work. Yet Musk is certain to meet dogged opposition from a bureaucracy that has proven to be all but immovable. That battle will be a colorful sideshow in 2025 and may be the main event once its full set of recommendations arrives in 2026.
To dig deeper into the outlook for Trump’s second term, we’ve published 18 stories on these issues and more from across our newsroom. Bookmark this page. Reference it as events develop. And as always, we welcome feedback from our readers in the comments below, on our X and Bluesky accounts, and wherever else users make their voices heard across the internet.
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