Trumps Economic Policy
Economy is the fuel of every sector of the state. The recent surveys by Gallup, Ipsos Polls, ABC News, Bloomberg and Morning Consult show that the economy is the top priority of US voters, so the presidential elections will be largely driven by economic policy. Tax cuts, tariffs, and restrictions on immigrants drive Trumps economic policy. These measures had limited effects in the past as uptrend was overshadowed by the pandemic. He will continue with the same measures if re-elected, which will help the US economy to grow; however, any miscalculations may affect it the other way.
Economy is at the forefront in the recent election campaign. Trump has stronger claims to revive the economy. In a rally, Trump declared, “We had the greatest economy in the history with the lowest mortgage rates”. Trump’s economic policy aims to boost economic growth by increasing job opportunities for Native Americans and lowering inflation. In a presidential debate, he asserted “Inflation is killing our country”, “Our economy is going to hell” and “We are going to bring jobs back from China to Michigan“. In an interview with NPR News with Scott Horsley, Trump summarised his economic policy as “Our agenda is pro-worker, pro-family, pro-growth and, pro-American.” To achieve these goals, he will introduce tax cuts, fair trade policies, enforcing tariffs, restrictions on immigrants and will slash job-killing laws.
If Trump policies translate into actions, it will helpthe US economy grow. The Trump tariffs at least 10% on every imported goods will generate $ 3 trillion annual commerce, writes Rachel Siegel in The Washington Post. Trump proposed tariffs on Chinese goods may rise to 60% which will generate an additional $2trillions in revenue, according to the Committee for a Responsible Federal Budget. Tariffs will add a whopping amount to the US federal reserves, which will help the US to introduce tax cuts, pay off debts and to revive industries. In a conversation on CNBC with a host of Squawk Box, Trump said that China is destroying our steel industry and tariffs will help to rescue our steel industries. Trump told Fox News that revenue generated from tariffs would be used to pay off debts. This may relieve the debt burden on the US.
Rachel Siegel wrote in The Washington Post that Trump plans to exempt tipped workers from taxes and to lower corporate tax from its current level. The revenue that is lowered due to tax cuts will be replaced with tariffs. When taxes are lower, the businesses can invest more, which enhances productivity and helps the economy to grow faster, as noted by Greg Mankiw in “Principles of Economics” he said that tax cuts increase aggregate demand and supply, which stimulate investments and eventually help the economy to grow. Trump also promised to impose strict immigration restrictions to create a space in the job market for native Americans. Epoch Times noted that illegal migrants cost an additional $20 billion to US taxpayers annually. Restrictions on immigrants will relieve US taxpayers of additional burden.
The Trumps economic policy is to put the US economy on an uptrend; however, any missteps could have the opposite effects. As Emily Stewart wrote to the Vox that Trumponomics is a bit of blackbox as it is not entirely clear. Marcus Noland, vice president of the Peterson Institute for International Economics (PIIE), told AFP that Trump tariffs may intensify the “Trade War” and may lead to counter-tariffs which may damage the international trade system. Patrick Horan, research fellow at the Mercatus Center at George Mason University says that retaliatory tariffs may increase inflation and will affect both consumers and producers. So, the tariffs although have positive impacts; however, not without risks.
Michael Clemens, a nonresident senior fellow at the Peterson Institute for International Economics says that immigrants are the lifeblood of the US economy; the deportations will prompt US businesses to shift their investments.
US News calls Trump’s economic policies “Trump 2.0” and asserts that he will inherit very large fiscal deficits from Biden. So, he should play safe and not get too ambitious.
Trump’s economic policy revolves around immigrants, tax-cuts, and tariffs. Researchers note that if his policy is successfully implemented it will help US economy to grow; however, any mismanagement may exacerbate current challenges. The balanced approach will be crucial to maximize positive outcomes and mitigate potential risks.
The writer studies at the Department of English and Applied Linguistics University of Peshawar.