With the promise of sustaining a better economy, Donald Trump may have made his way to the White House but the road ahead in terms of forming a more unified and inclusive economy, especially given his team, will be a challenge.
With her 100-day campaign, Vice President Harris had been championing President Biden and the current Administration’s Inflation Reduction Act, which had helped create over two million jobs for everyday Americans and increase energy manufacturing investments in the US, to reduce dependency in competitive markets for energy. The economy also thrived under new credit laws and increased oversight and regulation in American Markets. The stock exchange not the optimal economic indicator- also gained back its losses from the Pandemic and progressed further to enhance the prospect of increased trading hours. The overall resilience of the American economy was noted.
Now, after his victory, Donald Trump is proposing policies and handpicking candidates that will not only do his bidding but also crash the economy to a certain point of no return. Now, it’s worth mentioning all of his plans would require congressional approval, but with the House, the Senate and the White House already in the hands of the GOP, it’s almost certain that all these policies will take effect in the first 100 days of the next administration.
Donald Trump is proposing policies and handpicking candidates that will not only do his bidding but also crash the economy to a certain point of no return.
The President-elect has announced that he will impose a tariff of either 10 percent or 20 percent on every import coming into the US, as well as a tariff of over 60 percent on all Chinese imports. A tariff is a tax on imported goods. While yes, that does decrease the competitiveness of Chinese goods in US markets and leaves the door open for more jobs and prosperity in the short-term economy, long-run prospects could have these protectionism policies, upend much of the progress that’s been made in trade liberation in the past few years.
Many of the goods consumed in the US come from international markets. From F&B goods, all the way to consumer electronics, this policy could cause the buying power of Americans to fall by a large part. Furthermore, the introduction of certain embargoes could lead to a near-future trade war. This could cause more harm than good for American consumers and potentially lead to inflationary conditions for the economy. This, of course, would set off a chain reaction of a failing jobs market, and higher interest rates-something more than half the global population disagrees with at this point.
Tariffs are also known to shrink the size of the economy, reducing investment and overall productivity. The Wharton School suggests that the Trump Campaign tax and spending proposals would increase primary deficits by $5.8 trillion over the next 10 years, something conventional Republicans were trying to run against in this last cycle.
Also, among the less discussed economic plans, the deportation of millions of migrants is imminent, and that will have the same effect as Trump’s proposed tax cuts, decreasing overall government expenditure on strict economic welfare, and instead targeting national security and individualism in the United States. This new transition is likely to also-in this regard-reduce spending on NATO and protect US interests abroad. Essentially, it could seclude American interests and go on to deter overall modern society in the US, with rules like the Paris Climate Agreement going out of effect (in the next Administration), and the overall discourse of a greener and healthier economy, in question.
Beyond the economic outlook, there’s also an implication for the European Union and other allies of the US, hoping to somehow make it through the next 4 volatile years. The EU relies heavily on the US to import its goods and services. Additionally, China is its second-largest trading partner for goods after the US and trade between the EU and China reached Euro 739 billion in 2023. Tariffs on China could lead to lower productivity and potential economic disasters there, which at the beginning seems limited to the PRC. However, in the long run, if Chinese production becomes inefficient, Europe’s effort to sustain a global medicine, automobile, and energy market will surely come to an end, as an indirect effect of Trump’s policies.
There’s also a broad image problem for the economy. While yes, investors saw the confidence and overwhelming support for President Trump in 2024, they won’t be assured for long. Many know that the days of high-yielding US investments are coming to an unfortunate end. Protectionist policies, tariffs, and unsustainable tax cuts are the perfect recipe to deter investors from believing something profitable is on the horizon. Consumer confidence is also full of worries, with the overall belief in economic success, now on the line.
The writer is a columnist and a linguistic activist.