The setbacks policies of Donald Trump threaten its ability to carry out economic reforms promised and the large infrastructure projects despite economic situation was rather favourable, believe several experts.
The morale of the households in the United States was reached in August its highest level since January. Entries weekly jobless claims are the lowest in the last six months, according to the latest indicators.
However, “because of everything that has happened recently, especially last week, there was some concern about the ability, probably less, of the administration to keep its legislative agenda,” says Frank Nothaft, senior policy analyst of the National association for business economics (NABE).
The past week has been marked by its share of controversies, resignations and abandonment of the project of creation of a council which was to attend Donald Trump in its policy of renovation of the infrastructure of the country.
Two cenacles, bringing together business leaders around the u.s. president have also been dissolved following statements disputed the liability of the far-right and white supremacist in riots in Charlottesville (Virginia), which have been resented by many CEOS.
The week ended with the departure of his adviser Steve Bannon, champion of right, american alternative, presented as a rival to the White House’s chief economic adviser Gary Cohn.
Rumors of the departure of Gary Cohn they themselves had rocked the financial markets on Thursday.
This former number two at Goldman Sachs is perceived on Wall Street as a measure of stability within an administration weakened, and a president increasingly isolated.
“Any change in this equation holds, finally, the attention of the markets”, analyse the economists from Nomura Global Economics. “In the short term, the risks on the debt ceiling and the adoption of the budget in 2018 will increase to the extent that the president Trump loses influence in Congress”, they add.
Without support, the White House will be difficult to adopt in September its budget for 2018 (the fiscal year begins on the 1st of October) and, most of all, its ambitious tax reform.
Gary Cohn is, precisely, the architect of this reform. The tax code american, very complex and full of deductions a variety, has not been fundamentally changed since 1986. And its recast is at the heart of the project of the administration Trump to accelerate growth to 3%.
“The hopes of a policy of fiscal stimulus, aggressive by the administration (…) is dwindling every controversy, every scandal in the White House,” said Omer Esiner, analyst at Commonwealth Foreign Exchange.
The american president had yet received, after his election to the confidence in economic circles and business because of its promises of lower taxes, spending massive infrastructure and re-negotiate the trade agreements to the benefit of the United States.
The renegotiation of the free trade agreement north american (Nafta) has certainly started last week at the request of Washington. But Mexico and Canada do not intend to impose a treaty that would be favorable to Washington and the companies exporting american fear to be penalized.
As for the negotiations on the debt ceiling, they will start at the back and are heavy risk for the us administration. This is to increase the maximum amount that the us government can borrow to fund themselves.
Although the White House and the majority in Congress are on the same side republican, the green light on the debt limit is far from being achieved. Many conservatives, haughty balanced budget to term, want to tie cuts to spending to any increase of the borrowing capacity.
In 2011, an impasse on the issue had rocked the financial markets and, for the first time in contemporary history, the credit rating of Usa was lowered by the rating agency Standard and Poor s.
In the fall of 2013, a lack of agreement between the democratic administration and republicans in Congress, the departments of the government had been forced to close for two weeks.