“I will build a great, great wall on our southern border. And I will make Mexico pay for that wall. Mark my words,” Donald Trump said during his campaign.
Apparently, Trump meant what he said.
Since his inauguration last month, Trump has appeared on TV several times, and almost each time, he was signing some sort of executive order.
An executive order is a written order issued by the president to the federal government which does not require congressional approval. That fits his management style as big boss.
Apart from the great wall on the Mexico border, Trump has so far used executive orders to the pull the US out of the Trans-Pacific Partnership and pave the way for the controversial Keystone XL and Dakota Access oil pipelines.
He has also signed orders recently to suspend the refugee program for 120 days, and immigrants from seven predominantly Muslim countries are banned from entering the US for the next three months.
Trump claimed the move is aimed at reviewing the national security policy.
However, the policy has turned out to be a mess. The travel ban has stoked protests all over the country. Many Americans born in the seven Muslim nations but obtained US green cards need to go through lengthy inspections when returning to the US.
Also, those with a US visa have faced lengthy inspections or even detention at airports.
Trump fired acting attorney general Sally Yates Monday night, saying she “betrayed” the Department of Justice.
Yates wrote in a letter, saying “At present, I am not convinced that the defense of the executive order [on refugees] is consistent with [my] responsibilities nor am I convinced that the executive order is lawful.”
US stocks and the US dollar have both maintained a strong uptrend over the past few months as the market has held high hopes for Trump’s planned tax cuts and fiscal stimulus measures.
But recently, the dollar index has fallen below 100, and the Dow Jones Industrial Average has failed to stay above 20,000 points.
Gold prices have also risen above US$1,200 per ounce. That shows market optimism is fading.
Is the honeymoon for Trump over?
No matter what, investors are advised to step up their risk management measures.
Trump is widely considered as a businessman. Although he may be a good deal maker, running a business is different from running a country.
As an entrepreneur, Trump only has to think narrowly about maximizing his own profit but the same approach could backfire when applied to politics and social issues.
A company could overhaul the organizational structure or introduce new investors, or even declare bankruptcy when things are not working well, but there won’t be such options if you are managing a country with 300 million people.
It seems Trump is going to bring a lot of uncertainties.
While investors are counting on Trump to “make America great again”, they should not neglect the risks associated with his drastic moves.
This article appeared in the Hong Kong Economic Journal on Feb. 2
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]