Opinion: Trump’s threat to America’s economic future

By Steve Corbin

Professor Emeritus of Marketing, University of Northern Iowa

The conservative-oriented Wall Street Journal conducted a survey (July 5-9) of 68 professional economists, business forecasters and Wall Street gurus seeking their insight on America’s economic future. The results do not bode well should Donald Trump become our 47th president.

The survey’s results infer a four-fold effect if Trump returns to the White House: 1) inflation will increase a lot higher than under Biden’s administration (~2-3 percent), 2) due to increased inflation, the Federal Reserve will set higher interest rates, which further limits borrowing power, 3) families will see a dramatic increase in their cost of purchasing products, goods and services and 4) America’s federal budget deficit will be considerably larger; it grew more than $8.4 trillion during Trump’s presidency (2017-2021).

Of significant concern to financial experts is “Trump’s policy preferences, in particular on trade and immigration” (Wall Street Journal, July 13-14). Trump’s proposed 10 percent across-the-board tariff on imports and a 60 percent tariff on China imported goods will cost middle-class households approximately $1,700 a year in additional costs (CBS News, June 20). This price tag should be of no surprise as Trump’s imposed tariffs during his first attempt at being President cost American households $625 a year for four consecutive years (The Week, July 19).

The non-partisan Peterson Institute for International Economics notes Trump’s claim that foreigners bear the impact of tariffs is false. Data has proven -- beyond a shadow of doubt -- a tariff is paid by Americans who purchase imported goods (May, 2024).

Regarding Trump’s proposed 60 percent tariff on goods from China, a 2019 White House report acknowledged “these tariffs didn’t elicit any beneficial changes in China’s policies. Instead, Beijing retaliated by inflicting its own tariffs - their target being American farmers - by whom the U.S. government subsequently had to compensate at taxpayers’ expense” (Wall Street Journal, July 18). FYI: Direct financial farm aid by Trump to farmers jumped from $11.5 billion in 2017 to more than $32 billion in his final year as president (Politico, July 14, 2020).

One last comment on tariffs before moving onto two other economic issues proposed by Trump: The Tax Foundation says Trump’s proposed 10 percent tariff on all imports “would shrink the economy by 1.1 percent and threaten more than 825,000 U.S. jobs” (Wall Street Journal, July 17).

Trump has also promised the largest deportation of unauthorized immigrants in history, which will reduce the supply of labor workers in many industries. According to New American Economy, a bipartisan research organization, there are an estimated 11 million individuals living in the US without legal status (3.2% of population). Research reveals undocumented immigrants are not displacing U.S.-born workers; they are filling jobs Americans aren’t interested in pursuing. Undocumented immigrants account for about 50 percent of all hired agriculture, livestock production, food processing, vegetable, fruit and nut producers, and field crop workers, making them essential to the survival of American farms and our dietary preferences.

Should Trump follow through on his promise to have mass deportation of illegal immigrants and/or place these individuals into isolated detention camps, the cost of food to put on the table or dine at a restaurant will grow exponentially. Immigration reform is long overdue, but Trump’s solution only exacerbates the situation.

Trump wants to extend the 2017 tax law that disproportionately cut taxes for wealthy individuals and large corporations. The 2017 tax law expires at the end of 2025. On May 8 the Congressional Budget Office reported GOP’s proposed tax law extension would cost $400 billion for each of the next 10 years (total = $4,000,000,000,000).

Should the 2017 tax law get extended, the majority of economists surveyed by The Wall Street Journal “anticipate larger federal budget deficits under a Trump presidency” (July 13-14). America’s debt ratio would increase by 36 percent of America’s gross domestic product, pushing it to about 200 percent of GDP (Center for American Progress).

Let’s not forget, since 1933, America’s economy has grown at an annual average rate of 4.6 percent under Democratic presidents and only 2.4 percent under Republicans (Economic Policy Institute, April 2).

The Wall Street Journal editorial board made a bold statement in their July 18 op-ed that should be of concern to voters come Nov. 5: “The [Republican] party’s economic platform is a contradictory mix of tax cutting and tariff raising.”

Corporations, small business owners, investors and 342 million Americans do not like unpredictable and uncertain times. The economic impact of Trump and GOP’s proposed 2025-2029 policies on tariffs, immigration and 2017 tax law extension are predictable as we witnessed and documented the horrific effects once before (2017-2021). Electing Trump will be dangerous to America’s short- and long-term economic future.

Contact Steve Corbin at Steven.B.Corbin@gmail.com