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Trump’s First Actions: Which Could Impact the Economy?
Trump kept some of his “day one” promises in a bevy of executive orders.
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Updated · 13 min read
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Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She cohosts and produces Money News segments of NerdWallet's Smart Money podcast. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has been syndicated in news outlets nationwide including The Associated Press, The New York Times, The Washington Post and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York.
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On March 20, Trump issued an executive order to shutter the Department of Education (ED). The order shifts many responsibilities of the department onto states and other federal agencies.
Trump has long vowed to get rid of the ED but cannot fully do so without an act of Congress.
Certain functions of the ED are guaranteed under the law including, as the release mentions, formula funding; federal student loans and Pell grants; funding for special needs students; as well as competitive grantmaking. The order says all statutory functions will continue to be carried out by the federal government.
On Friday, Trump said from the Oval Office that the ED’s $1.6 trillion student loan portfolio would be transferred to the Small Business Administration. He added that oversight of special education services and nutrition programs would be transferred to the Health and Human Services Department.
Secretary of Education Linda McMahon said in a press release, “We’re going to follow the law and eliminate the bureaucracy responsibly by working through Congress to ensure a lawful and orderly transition.”
McMahon also said, “Teachers will be unshackled from burdensome regulations and paperwork, empowering them to get back to teaching basic subjects. Taxpayers will no longer be burdened with tens of billions of dollars of waste on progressive social experiments and obsolete programs. K-12 and college students will be relieved of the drudgery caused by administrative burdens—and positioned to achieve success in a future career they love.”
It’s unclear how the ED will continue to deliver its remaining services with a diminished staff. On March 11, the ED announced it would be reducing its workforce by 50% as of March 21. The ED began the year with 4,133 workers. Since Trump entered office, a total of 1,950 have left from a combination of Tuesday’s firings (1,315); probationary worker layoffs in February (63); and staff who left voluntarily with severance (572). The workers laid off this week will continue to receive pay and benefits until June 9, as well as severance pay.
Trump pauses tariffs on some Mexican and Canadian goods
On Thursday, Trump paused tariffs on all Mexican and Canadian imports under the 2020 free trade deal, known as the United States-Mexico-Canada Agreement. The pause will be in effect until April 2.
Trump's 25% tariffs on goods not included in the trade deal remain in effect. On Tuesday, an additional 10% tariff was also levied on Chinese goods, bringing the total added tariff to 20%.
Trump wants to change how economic growth is measured
The Trump administration is eyeing a change in how gross domestic product (GDP) is measured in the wake of federal spending cuts.
On Sunday, Commerce Secretary Howard Lutnik told Fox News that the Trump administration may split government spending from GDP. He said, “You know that governments historically have messed with GDP. They count government spending as part of GDP. So I’m going to separate those two and make it transparent.”
Similar remarks were made by Elon Musk, billionaire and leader of the so-called Department of Government Efficiency (DOGE) on Feb. 28. DOGE has recently taken action to lower government spending, which includes firing thousands of federal employees, freezing federal funding and eliminating government contracts.
It’s unclear why the administration has put the target on GDP data transparency since the Bureau of Economic Analysis (BEA) already breaks down government spending at the federal, state and local levels for each quarter. Those results are published by the BEA on a quarterly basis.
Economic data has shown some disappointing figures that include stubborn inflation levels; fewer hires; and lower consumer spending. Consumer confidence in the economy is down, as well. The latter is largely due to Trump’s recent tariff announcements, according to the Conference Board’s recent survey results.
GDP could be the next concern: On March 3, a forecasting tool published by the Atlanta Federal Reserve showed that GDP could contract by a rate of -2.8% in the first quarter of 2025. If GDP does indeed decline, it would be the first time since the first and second quarters of 2022.
Federal Judge says Trump disobeyed order to pause federal spending freeze
On Monday, a federal judge ruled that Trump’s team has continued freezing federal spending and grants. On Jan. 27, the Office of Management and Budget ordered a temporary pause on all federal funding, with some exceptions. Rhode Island District Court Judge John J. McConnell said that Trump’s team has not complied with a court-ordered pause to the spending freeze.
In his decision, McConnell said that the broad, sweeping funding freeze is “likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country.” Federal spending is approved each year by Congress.
The Trump camp told the court that it is “just trying to root out fraud.” The judge ordered Trump to resume the funding of all spending programs that were previously funded and must continue funding other agencies, specifically including the National Institute for Health (NIH). On Sunday, the NIH announced it was capping funding for indirect funding costs at 15%.
It’s unclear if the Trump administration will comply with the judge’s order. Later in the day, the administration filed an appeal.
See below for a play-by-play of the funding freeze drama.
Trump announces new steel and aluminum tariffs
On Feb. 10, President Trump announced 25% tariffs on all steel and aluminum imports. The tariffs go into effect on March 12.
The top importers of steel to the U.S. include Canada, Mexico, Brazil, South Korea, Japan, Germany, China, Taiwan, Vietnam and Algeria, according to the International Trade Administration. Trump said that no trade partners would be exempt from the tariffs.
During Trump’s first presidency, he imposed a 25% tariff on aluminum and a 10% tariff on steel from Canada, Mexico and the European Union. The tariffs continued under Biden. An analysis of those previous tariffs by the Tax Foundation found foreign exporters largely passed the cost of the tariffs to U.S. companies. The industries that were most impacted by the aluminum and steel tariffs included transportation, construction and packaging industries, according to the analysis.
Trump lays out tax priorities
On Feb. 6, during a closed-door meeting with GOP House leaders, Trump reportedly laid out his tax priorities, which include:
Extending the expiring 2017 Tax Cuts and Jobs Act.
Enacting tax breaks for products that are made in America.
Enacting his “no tax on tips” plan.
Cutting taxes on overtime pay.
Cutting taxes on Social Security benefits.
Nixing tax breaks for owners of sports teams.
Eliminating the carried interest tax deduction
The Committee for a Responsible Federal Budget (CRFB), analyzed Trump’s tax priorities and estimates it would be costly, resulting in a revenue reduction by anywhere from $5 trillion to $11.2 trillion over 10 years; and a 1.3% to 3% reduction in Gross Domestic Product (GDP). The CRFB projected that the tax priorities as proposed would boost debt to anywhere from 132% to 149% of GDP over 10 years, from an estimated 100% at the beginning of 2026, unless the costs of the priorities are otherwise offset.
The tax priority with the greatest economic impact would be extending his 2017 Tax Cuts and Jobs Act, which the CRFP estimates could cost anywhere from $3.9 to $4.8 trillion over a 10-year period.
Federal judge blocks Trump’s federal spending pause
Confusion over the details of a federal funding interruption continued throughout the week with seemingly no clear answer as to whether or not the pause was still in place.
But on Jan. 31, a federal judge in Rhode Island granted a temporary restraining order that blocks the pause. U.S. District Judge Jack McConnell approved the request after hearing arguments in a lawsuit filed by 22 Democratic-led states and the District of Columbia. In the decision, the judge wrote that the White House’s actions likely “violate the Constitution and statutes of the United States.” The restraining order is set to last until the court rules on the state’s motion for a preliminary injunction.
It all started with a memo issued on Jan. 27 by the Office of Management and Budget (OMB), which called for the pause of all federal spending, grants and other financial assistance programs. The OMB said the programs would be reviewed to ensure they align with President Trump’s various executive orders.
Assistance programs and activities that the memo named during the review included, “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
But there was little clarity on which specific programs the memo was referring to. Various reports speculated that the pause would have included Medicaid; transportation funding; small business loans; disaster relief aid; FHA mortgage insurance; as well as other funding for state, local and tribal governments. Assistance programs for individuals — Medicare, Social Security, food assistance through the SNAP program and student loans — were expected to continue without interruption.
Late on Jan. 28, after a day of uncertainty and conflicting reports on the scope of Trump's order, a federal judge in Washington D.C. granted a "brief administrative stay" to block the spending freeze pending further examination by the courts. Judge Loren AliKhan's order expired on Feb. 3, at 5 p.m. EST.
The following afternoon, the White House issued a memo rescinding Monday’s OMB order, but a later post on X from the White House Press Secretary Karoline Leavitt claimed a funding freeze was still in place. Leavitt said the purpose of the memo was “To end any confusion created by the court's injunction.”
Intention aside, Leavitt’s comments launched even more chatter about the reality of the pause.
However, Sen Chris Murphy (D-CT) confirmed on X that the funding shutdown was still in place.
Sen. Tim Kaine (D-VA) said in a video he posted on X “This thing ain’t over, we’re going to have to keep battling.”
The initial memo set a Feb. 10 deadline for agencies to submit detailed information on programs, projects or activities included in the pause. There may also be possible exceptions on a case-by-case basis, the memo notes.
The pause faces further potential legal wrinkles. The Spending Clause in the U.S. The Constitution gives Congress the power to fund all kinds of programs. Each year, Congress approves funding for grants, loans and financial assistance programs — that makes those programs legal obligations.
The Impoundment Control Act of 1974 requires the executive branch to spend funds that Congress approves of. In January 2020, the U.S. The Government Accountability Office said the OMB’s withholding of obligation funds for the Department of Defense for assistance to Ukraine violated the ICA. In the memo, the GAO wrote, “Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law.”
Trump floats tariffs on steel, semiconductors and pharmaceuticals
On Jan. 27, Trump said he plans to enact tariffs on steel, aluminum, copper, pharmaceuticals, computer chips and semiconductors, in the hopes of bringing manufacturing back to the U.S.
Trump said tariffs on computer chips and semiconductors from Taiwan could be anywhere from 25% to 50% or even up to 100%. Tariffs on chips and semiconductors could lead to higher prices for computer products including smartphones.
In response, the Taiwanese government said the current business model with the U.S. is a win-win, while the Taiwan economy ministry called the two nations’ semiconductor businesses “highly complementary to each other.”
The Taiwan Semiconductor Manufacturing Co. (TSMC) — the largest producer of semiconductors in the world — is investing $65 billion in Arizona for new chip manufacturing plants, as part of the Biden administrations’ CHIPS and Science Act. The Act also gave funding to U.S. companies for the creation and expansion of chip manufacturing plants.
President Donald Trump made hundreds of “day one” pledges while campaigning, but they didn’t all materialize. That said, Trump’s presidency is young and he has a long list of plans he wants to enact in his first 100 days in office and beyond.
On Trump’s first day as president, he made 26 executive orders, in total — a few of which have already been met with legal actions. In one order he pulled back nearly 80 executive orders made by former President Joe Biden, including a recent effort to lower Medicare and Medicaid drug costs.
Trump’s first set of orders run the gamut, but several could impact the economy and your personal finances. Here’s a few that made the cut.
Agencies must take action to lower prices
Trump ordered the heads of executive departments and agencies to deliver price relief to Americans. The order listed a number of actions, albeit vague ones, that departments should take to lower costs. That could include:
Lowering the cost of housing and expanding supply.
Getting rid of red tape and “rent-seeking practices” that lead to higher health care costs.
Nixing “counterproductive” requirements that increase home appliance costs.
Creating more job opportunities, including those that bring back “discouraged workers.”
Eliminating “harmful, coercive” climate polices in order to lower the costs of food and fuel.
The order requires department and agency heads to report back within 30 days with updates and then every 30 days thereafter.
‘Unleash’ U.S. energy production
Trump signed a number of executive orders aimed at expanding U.S. energy dominance and lowering prices for consumers. Most notably, Trump declared a national energy emergency, which allows his administration to use “emergency authorities” to cut through red tape and expand domestic energy production and transportation.
It’s worth noting that presidents can’t control gas prices. Their policies might have some influence but it often takes years to materialize as domestic companies act on the changes and take into account global market dynamics.
Another of Trump’s executive orders signed Jan. 20 takes steps to open opportunities to extract more of Alaska’s natural resources by:
Maximizing natural resource development and production on federal and state lands.
Expediting permitting for energy and natural resource projects.
Prioritizing the growth of the state’s liquified natural gas industry.
Another order outlines broad energy policy meant to encourage production and limit regulations. It seeks to:
Expand off-shore exploration and drilling.
Grow production of non-fuel minerals, including rare earth minerals.
Eliminate motor vehicle regulations that promote the adoption of electric vehicles over gas-powered cars and trucks.
Remove rules that limit the kinds of consumer goods and appliances available, including light bulbs, dishwashers, washing machines, gas stoves, water heaters, toilets and shower heads, among others.
In other energy-related moves, Trump issued a memo that temporarily stops the federal government from granting new or renewed leases for off-shore wind energy projects. He also pulled the U.S. out of the Paris Climate Agreement.
Pulls the U.S. out of global tax deal
Trump declared that the Organization for Economic Cooperation and Development (OECD) Global Tax Deal, which went into effect early in 2024, “has no force or effect,” in the U.S. The deal, which Biden arranged with nearly 140 countries in 2021, applied a minimum tax on corporate income in every country where a company operates.
Trump’s action effectively means the U.S. is no longer part of the deal. He also instructed the U.S. Treasury to prepare “protective measures” against countries that plan to or have already instituted tax rules that would impact companies in the U.S.
No mass deportations yet, but added border restrictions
Trump didn’t yet order mass deportations as he pledged to do on day one, but he did take several executive actions that could impact citizenship, southern border security, as well as the future for undocumented immigrants in the United States. Economists say undocumented immigrants play a critical role in the U.S. labor force. The orders include:
Declaring a national emergency at the southern border and securing the border with physical barriers and additional personnel. He also made an order empowering the military to take action at U.S. borders.
Barring asylum for new arrivals at the southern border and halting the Refugee Admissions Program.
Ending birthright citizenship for future children born in the U.S. to parents who are undocumented immigrants. This order contradicts the 14th Amendment of the Constitution, which states that “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” The president does not have the power to overrule or change a constitutional amendment and 18 states have already sued to stop the action.
No tariffs, but a close look at trade deals
Trump did not impose new tariffs on U.S. trade partners, but he laid the groundwork for future actions.
In a memo, he directed his cabinet to investigate trade deficits, as well as review trade policies and agreements. Trump also called on the departments of Commerce and Homeland Security to look into the feasibility of establishing an External Revenue Service whose primary purpose would be to collect trade-related revenue.
Separately, Trump told reporters he could enact 25% tariffs on Canada and Mexico as soon as Feb. 1. He also said he “may” impose across-the-board tariffs, as he promised during his campaign, “but we’re not ready for that just yet.”
(Photo by Anna Moneymaker/Getty Images News via Getty Images)
