As former President Donald Trump eyes a potential return to the White House in 2024, economic policies are expected to take center stage once again, echoing his 2020 campaign focus. With inflation and high-interest rates causing concerns, here are three key economic measures that could feature prominently in a Trump reelection bid:
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Tariffs and US-China Trade: Trump has consistently advocated for tariffs on imported goods, proposing a potential automatic 10 percent tax on products entering the United States. While details are unclear, experts anticipate a continuation of the "trade war" with China. Marcus Noland of the Peterson Institute for International Economics (PIIE) expresses concerns about the impact on the international trade system and potential damage to the rules-based trade order. Higher tariffs could also contribute to rising prices of imported goods, particularly affecting consumers already grappling with inflation.
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Tax Cuts: A hallmark of Trump's first term was a substantial tax cut package implemented in 2017, affecting both households and large companies. With these reforms set to expire in 2025, there's an expectation that Trump would aim to extend them if reelected. However, higher interest rates might prompt a push for tax reform with reduced on-paper deficits. Richard Stern of the Heritage Foundation suggests that despite the desire to extend tax cuts, there could be pressure to address fiscal concerns and debt implications.
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Green Industries Under Attack: Trump's return to the presidency could spell challenges for green industries, including electric vehicles and solar panels. The Inflation Reduction Act (IRA), a significant clean energy initiative passed in 2022, may face overhaul under Trump's administration, with a focus on maximizing fossil fuel production. Ben Ritz of the Progressive Policy Institute (PPI) warns that such a move could undermine the growth of green technologies stimulated by the IRA, potentially isolating the U.S. internationally and impacting consumer costs.
As the potential for a Trump reelection unfolds, these economic policies—tariffs, tax cuts, and shifts in green industry focus—are anticipated to shape the economic landscape and influence the direction of the nation's financial strategies.