Donald Trump is proposing significant changes to the economy, including imposing new tariffs on imports and deporting undocumented workers.
These proposals risk reigniting inflation, despite Trump’s criticism of President Biden for higher prices. If elected, Trump could implement these policies without Congress.
His economic advisors, who previously restrained his nationalist impulses, are now at odds with him, potentially empowering more fringe voices. (Trending: Fox News Star Accused Of Major Scandal)
Trump’s approach to the economy is seen as impulsive and chaotic, with some fearing it could further unsettle the economy.
His trade proposals could lead to higher prices for consumers and make it harder for domestic producers to sell in foreign markets.
Some estimates suggest his tariff plan could double the current pace of inflation.
“I worry there’s not going to be an effective policy check on him. The circle has narrowed so much that in the second term he may hear no dissent, even at the outset,” GOP analyst Doug Holtz-Eakin said. “And if he really does the trade and immigration proposals he’s discussing, it would be a very big deal – you hope that by then inflation would be under control and you wouldn’t get a wage-price spiral, but there’s no guarantee.”
“The problem is what he’s proposing is so far outside historic experience there’s not even a decent set of estimates about it,” economist Michael Strain said.
“I saw some clip where Trump was attacking Biden about inflation, and it’s like, ‘You’re going to massively restrict the supply of workers and do a 10 percent across the board tariff?’ On the economics, that’s completely insane.”
“The three biggest effects on inflation from the proposals on the table are from tax cuts, deregulation, and expanded energy production, followed closely by big reductions in government spending. Those four effects would dwarf the effects of any other policy proposals,” former economic adviser Kevin Hassett said.
“Every presidential candidate in my adult life has put forward a portfolio of policies, and the portfolio of policies won’t necessarily all have the same sign effect on any variable.”
“When companies come in and they dump their products in the United States, they should pay, automatically, let’s say a 10 percent tax,” Trump said. “I do like the 10 percent for everybody.”
“We will impose stiff penalties on China and all other nations as they abuse us.”
While some argue that tariffs are a useful tool, others caution about their potential impact on inflation and the economy.
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