Has Trump promised too much on the US economy?

Donald Trump has promised a major overhaul of the world’s largest economy.

“An end to hyperinflation”, tariffs and massive tax cuts, regulations and government expansion are all on the agenda.

This combination, he says, will spark economic growth and revive a fading faith in the American dream.

“We’re at the beginning of a big, beautiful business,” he promised at a Mar-a-Lago event earlier this month.

But what is approaching the president-elect are warnings that many of his policies will do more harm to the economy than help them.

And as he prepares to implement his plans, experts say he is about to face political and economic events that will make it difficult to fulfill all his promises.

“There is no clear way at this point of how to achieve all these goals because they are contradictory,” said Romina Boccia, director of budget policy and freedom at the Cato Institute.

Let’s take a closer look at his most important promises.

What Trump promised:

“Prices will go down”, he said repeatedly.

It was a risky promise – prices rarely go down, unless there is a financial crisis.

Inflation, which doesn’t measure the level of prices but the rate at which prices fall, has already fallen, indicating that it is difficult to reverse.

Confounding factors:

Mr Trump backed up his claims by promising to expand existing US oil and gas production, reducing energy costs. But the forces that affect inflation, including energy prices, are often outside the president’s control.

As far as the White House’s policy changes, experts have warned that many of Trump’s proposals — including tax cuts, tariffs and immigration deportations — are making the problem worse.

Economist John Cochrane of the right-leaning Hoover Institution said the biggest question facing the economy was how Trump would handle the “contradictions” between the conservatives and the “patriots” who focus on issues. such as border control. and confrontation with China.

“Obviously both camps are not going to get what they want,” he said. “It’s going to be an important issue and because of that we don’t know what’s going to happen.”

What Trump voters want:

The promises of inflation were key to Trump’s victory but with many measures, such as growth and job creation, the overall economy was not in the dire straits he portrayed on the campaign trail.

Since his victory, he has tried to temper expectations, warning that it would be “very difficult” to lower prices.

Amanda Sue Mathis, 34, of Michigan, says she thinks Trump’s promises are possible but it may take time.

“If anyone can make better deals to make things more affordable for the American people, it’s Donald Trump,” he said. “He really wrote the book on marketing.”

What Trump promised:

Trump’s most controversial economic promise was his vow to impose tariffs – a border tax – of at least 10% on all goods coming into the US, which could rise to more than 60% on imports from China.

He has since increased his threats to other countries, including allies such as Canada, Mexico and Denmark.

Some of Trump’s advisers say the tariffs are negotiating tools on other issues, such as border security, and will eventually settle on a more direct, or gradual, path.

Confounding factors:

The debate has raised speculation about how aggressive Trump might choose to be, given the potential risks to the economy.

Analysts say the tariffs could lead to higher prices for Americans and pain for companies hit by foreign retaliation.

And unlike Trump’s first term, everything will come at a critical time, because the US economic growth seems to be at an end.

Even if higher prices are unlikely, the policy debate alone is creating uncertainty that could weaken investment and reduce growth in the US by 0.6% by mid-2025, according to Oxford Economics.

“They have very little margin for error,” Michael Cembalest, chairman of market and investment strategies at JP Morgan Asset Management said in a recent podcast. He warned that the desire for a major reform could “break something”, although what remains to be seen.

Trade lawyer Everett Eissenstat, who served as a White House economic adviser during Trump’s first term, said he expected the price to rise, but acknowledged the plan would compete with other targets.

“There are always conflicts. There is no perfection in the policy world. And obviously one of the reasons I think he was re-elected is to worry about inflation,” he said.

“We are in another country [than the first term] and we have to see how this goes,” he said.

What Trump voters want:

Lifetime Republican Ben Maurer said he wants Trump to focus on the larger goal of reviving US manufacturing, rather than tariffs per se.

“I see it as more of a communication strategy than a real strategy,” said the 38-year-old, who lives in Pennsylvania.

“Not to say they’re not going to tax anything – I think they will – but I think it’s going to be a lot better for what they’re putting that money in. I agree with that and I think his judgment is good enough to decide what to do. cost.”

What Trump promised:

He has put forward a pro-growth agenda – lower taxes, less regulation and smaller government, which he says will open up American business.

Confounding factors:

But experts say easing control may take longer than expected. And Trump is expected to prioritize long-term tax cuts over spending.

Ms Boccia of the Cato Institute said she expected a tightening of lending under Trump’s administration and an additional rise in inflationary pressures.

In financial markets, these concerns have already helped push up interest rates on government bonds in recent weeks, he said.

While Mr Trump has also faced criticism from those in his own party who are concerned about the US debt burden, Ms Boccia said the tax hike – which is said to add more than $4.5tn to the US debt over the next decade – looks certain.

In contrast, Trump ordered more spending off limits during the campaign when he promised to leave major programs, such as Social Security, unchanged.

The so-called Department of Government Efficiency (DOGE) led by Elon Musk and Vivek Ramaswamy has also publicly scaled back its ambitions.

“The signals that the market is sending now are being picked up by economists but not by Washington,” he said. “At the end of the day, politics is taking the path of least resistance.”

What Trump voters want:

Mr. Maurer said that weakening the authorities is critical to his leadership prospects.

“The money the government is spending is crazy,” he said.

Additional reports by Ana Faguy