Trump, Tariffs and Taxes: How He’ll Turn Campaign Promises Into Policy
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Hey, What's News listeners. It's Sunday, November 10th. I'm Luke Vargas for The Wall Street Journal, and this is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news by reaching out to our colleagues across the newsroom to help explain what's happening in our world.

Donald Trump was elected this past week on a promise to turn around what he called a weakened U.S. economy by rebalancing trade through tariffs, cutting taxes, and cutting regulation. I will pass gigantic tax cuts for workers and keep their jobs here in the United States. There will be no tax on Social Security. We're going to stop it.

We're going to have 10 to 20 percent tariffs on foreign countries that have been ripping us off for years. Some might say it's economic nationalism. I call it common sense. But what does the path from campaign promise to implementation look like? And what tools or political support will Trump need to deliver on that agenda? Let's get into it.

Two Wall Street Journal reporters whose jobs are about to get a lot busier as President-elect Donald Trump prepares to staff up Washington and set his economic platform in motion are Brian Schwartz, who covers economic policy for us, and Richard Rubin, the journal's tax policy reporter.

Brian, let me start with you. Let's go to tariffs, a huge part of Trump's economic agenda. He's calling for a universal baseline tariff, 10, maybe even 20 percent meant to, in his words, reward domestic production. Trump leaned very heavily on tariffs in his first term and it appears Republicans will likely have control of both chambers of Congress this time around. So I imagine Trump will have pretty broad authority to impose tariffs at will. Is that right?

Yeah, that's right. I mean, as we get into 2025, right, he is going to have broad authority. He can basically just do it. I mean, he could just make the call as an executive order effectively to move ahead with these tariffs. It can be on goods coming from our allies, imports coming from our allies or those imports coming from China. This was a pillar of his campaign. It was tariffs and kind of leaning into that populism that helped him win the election.

Brian, Trump, right, did impose tariffs in his first term using existing statutes that were designed to punish unfair trade practices and protect national security. You're saying the president-elect can maybe even claim these tariffs as a mandate from the electorate. But there are likely to be objections from some companies, retailers among them. How does he overcome those objections?

He did that easily in his first go around as president. There was pushback from a variety of industries. There was lobbying against it. I remember covering that, but he still went ahead and pressed forward anyway. So now that he has the feel of Washington right now, that Donald Trump really understands how Washington works.

My sense on it in the early days here is he's kind of shrugging off any private pushback he's getting from corporate leaders on much of what he's suggesting, including the tariffs. It feels like from someone I spoke to recently that he's just been emboldened by the business leaders that are around him right now, including Elon Musk.

He's kind of looking at this from a perspective of, well, I've got some of these people in my corner. Why do I have to really engage too much with some other CEOs on this front who have issues with the tariffs? And Rich, what could Congress have to say about all this? A lot of members of Congress don't like tariffs. They're worried about the effects on industries in their districts. They're worried about retaliation against farmers in their districts because the U.S. is a large exporter of agricultural products.

But I think there's basically not enough clout within Congress to pull back the tariff authorities that Congress has already years ago granted to the president. And there's also probably not enough clout within Congress or enough votes to actually enact the tariffs that Trump wants. So they're kind of in this stasis where they're going to have trouble giving him authority and trouble taking it away.

Let's transition, if we could, from global trade policy to something a bit more of a kitchen table issue. Taxes. Rich, this is your field of expertise. Run us through very quickly, if you could, what Trump has put on the agenda there. We ended up getting quite a lot of tax proposal specifics, didn't we, during the campaign?

Well, we got ideas, if not specifics. But look, the one big thing that's driving this train on taxes is the expiration at the end of 2025 of many of the tax cuts that he signed into law in 2017. So lower rates, higher standard deduction, higher child tax credit, all of that's set to expire. And Republicans, if they have full control, are pretty unified on trying to extend the bulk of that. What's happened, though, is there's not a lot of political bang for the buck in the

extending tax cuts that are keeping things the way they are, right? So you've seen Trump during the campaign come on top of that and say, okay, no tax on tips, no tax on overtime, no tax on social security benefits, restore the state and local tax deduction, all of these things that are really expensive promises.

And that have to get folded into this debate somehow. Part of what I'm watching in the coming weeks and months is as Republicans try to advance their tax agenda and fit everything into their bill, how do they incorporate bits and pieces of what Trump ran on during the campaign that's beyond just a mere extension?

Is it the case that with all the tax ideas Trump's put out there that they would need to pass through Congress? And if you could talk about how some of the measures that he's floated are likely to play among lawmakers.

Look, there's definitely some things that the Treasury Department can do on its own, can relax some regulations and change some of its enforcement priorities. That's all certainly possible. But the big changes do require Congress. And it's hard to know right now how likely things are. Some of those are really expensive. The TIPS one, I think, is less expensive, probably a couple hundred billion over 10 years at most. It was a pretty clear promise he made and one that they'll have to massage the language of it to make it work.

but it's doable. Overtime and Social Security benefits are expensive. And the SALT cap, the $10,000 cap on state and local tax deductions, is sort of a cornerstone of the law that Trump signed into place in 2017. He sort of flipped on that. But there's two groups of Republicans in Congress. There's the bulk of them who like that cap and want to keep it because it pays for tax cuts. And then there's the handful of Republicans

Republicans from high tax states who see this as an existential issue for them and are going to demand that that cap be repealed or increased significantly.

We have got to take a very short break, but when we come back, we're going to look at whether Trump's tax plans could meet pushback over deficit concerns. And we'll consider another potential wild card on Trump's agenda, cutting regulations, potentially with the help of Elon Musk. Stick around. Your business deploys AI pilots everywhere. But are they going anywhere? Or are they stuck in silos, exhausting resources, unable to scale? Maybe you don't need hundreds of AI pilots. You need a holistic strategy.

IBM has 65,000 consultants with Gen AI expertise who can help you design, integrate, and optimize AI solutions. So you're not just deploying AI, you're scaling it across your business. Learn more at ibm.com slash consulting. IBM, let's create. All right, before we leave taxes behind, I wanted to play this comment from Trump's victory speech early on Wednesday morning.

We're going to be paying down debt. We're going to be reducing taxes. We can do things that nobody else can do. Nobody else is going to be able to do it.

Rich tax cuts and paying down the debt. Are we likely to see that? And if instead we see further expansion of the federal deficit as some of these tax cuts are enacted, might we see some Republicans starting to break rank on any parts of this economic agenda? That's a hugely important question that we'll start to get some clues on very soon. To pass a tax bill through the House and Senate on party line votes, they have to agree in advance how

how much additional deficit expansion they're willing to tolerate. And so you're going to see some tension between Republicans who prioritize tax cuts and Republicans who prioritize deficit reduction. There aren't that many of the latter group. What we've seen over the years is that Republicans, when push comes to shove, have favored lower taxes and have been unable to agree on large spending cuts.

But there are still definitely lawmakers out there who care a lot about the deficit. And so we're going to see how that plays out. Paying down debt, it seems not in the cards. The U.S. spent $1.8 trillion more than it collected in fiscal 2024. To start paying down debt, that would need to go the other direction. It's really about, can you take those annual deficits and start making them smaller somehow?

Right. The question sort of remains how to cut spending as well as go ahead with a lot of these policies. Yeah, I think you'll see plenty of debate about exactly how much revenue you're likely to get out of any policy. But, you know, going back to spending, there are a lot of Republicans who would favor significant spending cuts. You know, people talking about let's get rid of the Department of Education. But it's also true that, you

with the slim majorities they have in Congress, any three or four House members, any four or five senators can say, no, it's actually really important that we expand the Navy or we don't cut the federal funding for agriculture subsidies or the kinds of federal spending that Republicans like. Or, you know, if they start talking about Medicare, Medicaid, those kinds of things, they're

There are also plenty of Republicans who are going to be wary of cutting programs that benefit their constituents. Fascinating. It'll be interesting to see whether or not some of the infighting we saw within the Republican caucus, specifically in the House during the Biden presidency, had to do with just not wanting to be seen as cooperating with a Democrat in the White House or as actually representative of

fissures that will manifest here in a second Trump term. We have to move along, though, to the final pillar of Trump's economic agenda, which concerns cutting regulation.

Brian, I know there aren't too many specifics we know about what Trump is planning, but that his likely moves would involve regulations around the climate, potentially around tech, for instance, around artificial intelligence, and of course, on finance from regulations on banks or to the crypto industry. Am I hitting the big ones there? You got it. And look, you know, the phrase personnel is policy. And I feel like on the deregulation front, that's exactly what we're going to get here. If

If Elon Musk even has some form of an outside role, I'm not talking about anything that's going to need to be confirmed on. You are going to see some sort of effort in moving to deregulate certain industries, maybe a push to cut back in certain departments within the federal government. That's really going to be critical. I mean, if he surrounds himself with people who believe in this deregulation force, particularly

think of one other agency, which is the SEC and crypto, that is going to be an agency to watch and see how they handle the cryptocurrency space in the coming months and years ahead. Just to be clear, can the president just do away with regulations with the stroke of a pen, regardless of whether you've got a Elon Musk-led Department of Government Efficiency in the mix? I don't even know how that would interplay with what the current landscape is, but what can the president just do?

Congress has some role in that. But also, when you look at the agencies themselves, they do have some broad authority when it comes to regulations because the Republicans control the Senate. Effectively, if there's ever a vote on issues surrounding the SEC, that basically moves ahead. On regulations, you do have to go through some process right there. It's not an instantaneous tear everything down. So it can take a little bit of time.

for that to happen, which is what we saw when Biden came in. They took a lot of the deregulation that Trump did and tried to reverse it. Some of it they left alone. They have to go through some of these formal processes to do it. But deregulation will happen for sure. And then we'll be in a 26-28 environment where perhaps the next president will come in and re-regulate. So when we have these partisan changes in administration over a short period, you end up with a bit of a seesaw effect.

And can I just ask both of you on this point to wrap things up, because this is such a grab bag issue. It sounds like so many potential deregulation efforts could be at play here. Is there one or two things that each of you are watching potentially for day one executive orders? Where might we start to see Trump and his team going after regulations first? Rich, I'll start with you. I would look at the IRA regulations, the Inflation Reduction Act. Treasury Department has been implementing those rules extensively.

on all the tax credits that the Democrats passed in 2022. And some of those regulations are not particularly industry friendly, you know, especially if there's going to be resistance among some Republicans for repealing all of those tax credits. You may see the administration at least try to change how those

credits operate. And Brian, your crystal ball? Yeah, look, I don't know necessarily about an executive order, right? But what I'm going to be watching for is how the crypto space is treated on day one and the weeks ahead. They were major backers of Donald Trump's run for president. And so now you have to ask yourself, is there going to be a return on that, right, from the incoming Trump administration? What is that going to look like? How does he's

speak to the cryptocurrency industry and with a new SEC, how is that going to look under Donald Trump? I've been speaking to Wall Street Journal economic policy reporter Brian Schwartz and Journal tax policy reporter Richard Rubin. Brian, Rich, thank you both so much. Thank you. Thank you.

And that's it for What's News Sunday for November 10th. Today's show was produced by Charlotte Gartenberg with Deputy Editor Scott Salloway, and we had help from Pierre Bien-Aimé. I'm Luke Vargas, and we'll be back tomorrow morning with a brand new show. And until then, thanks for listening.

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