The first 100 days in focus: Same game, new rules?

There are so many possible scenarios and questions 100 days into a new presidential administration. Tariffs, taxes, treaties and trust have been factors in the first 100 days of President Trump’s second term. On the merits of the fourth-quarter results, an observer could conclude that 2025 was setting up for more of the same of what we saw in 2024. The early indications from the first-quarter results reaffirm that perspective.

The price-cost spread should drive operating leverage. Structural volume growth should be positive, but overall volume could range from slightly negative to slightly positive as the purposeful shedding of low-margin, capital-intensive sales continues. Mergers and acquisitions could add 1-5 percent in top-line growth, and the probability of a big deal is improbable.

Overall, the fundamentals of the operating model are little changed 100 days into the new administration. However, will the administration’s actions alter capital spending choices? Is a recession possible—or even intentional? Has political capital been squandered such that a tax bill does not get passed, or one that does pass is less favorable?

What is nearly certain is that without a tax bill, a recession is inevitable. If small business is the progenitor of growth, the consumer is the engine of the U.S. economy. Overall wage growth has struggled to keep pace with inflation. A seven-year cumulative $3.5 trillion reduction in spending cannot be absorbed by the consumer without a follow-on recession.

Overall, the fundamentals of the operating model are little changed 100 days into the new administration.

In terms of capital spending, normal course spending is likely to go on as planned, with tweaks around the edges as the ebbs and flows of the domestic economy play out. Special waste has been in a slump and is not likely to see much of a recovery. New business formation probably narrows if not stalls outright. The combination could lead to a push/pull for spending on trucks and containers or incremental landfill cell development.

Fleet spending could continue as planned as Nox27/ Phase 3 emissions controls for heavy-duty vehicles, introduced by the Environmental Protection Agency in 2023, come into effect by 2027. Buyers could front-load pre-Phase 3 chassis to avoid a possible repeat of 2007. A Phase 3 target of 35 grams is going to be hard to do without a negative impact on operating and maintenance costs. It also begs the question of whether the chassis should come with two engines. When the first overhaul is planned, the first engine can be swapped for the second one.

Long-term and strategic capital choices are other matters. Making generational capital spending decisions is something that is returns-based. Tariffs are a tax coupled with uncertainty about overall tax policy, which could lead to delays in generational capital investments.

Treaties and trust speak to the overall world order, which ultimately impacts capital allocation choices. Where to put capital to work across a global economy reflects certainty about the rule of law, consistent tax policy and access to productive labor.