Donald Trump’s election as President of the United States of America has been termed as the most “climate-changing” global economic event since the turbulent 1980s. Here are ten economic implications of Trump’s landmark victory.
- Tax Reforms
The reasonable reforms on tax structures will finally be converted into law. Special tax rebates will be extended to organizations that concentrate on national resources and do not depend solely on foreign profits. These tax reforms will create budget deficits, which in turn will drive economic growth.
2. Geopolitical Stability
Trump is supposed to deal with political issues on a transactional basis, rather than the previous policy of liberal interventions everywhere. This ought to stabilize USA’s relations with China and Russia and create influence zones all over the world.
3. Spending on Infrastructure
One of the major policies during Trump’s presidential campaign was his promise of substantially increasing spending on public infrastructures. While boosting growth and employment, it may also cause inflation and higher interest rates.
4. Fiscal Stimulus
Trump’s plan to substantially increase domestic spending and lower tax rates is bound to create a fiscal stimulus in the US economy. The President’ proposed plans are going to increase the US national debt by $5.3 trillion, according to the committee for the National Budget.
5. Immigration Control
Another highlight of Trump’s election campaign: he proposed to build a wall along the US-Mexico border to stop illegal immigration. This action is symbolic of the general direction of his immigration policies. The tightening of immigration rules and illegal workers being sent back to their native countries will trigger labor shortage in US economy.
6. Defense Budget Increase
Trump has quantitatively called to add 90,000 soldiers to the armed forces. He wants a navy consisting of 350 ships, plans to add 100 more fighter planes to his arsenal, and intends to strengthen missile and nuclear defenses. An increase in the defense budget will increase the value to a whopping $1 trillion, affecting all the related industries and economy.
7. Effect of Personality
The effect of Trump’s overbearing and authoritative personality is likely to rub-off on the economy. Moreover, with his proposed control and curbing policies over media and press, assuming overall responsibility for the FBI and CIA, the business community may feel a little uneasy.
8. Driving Growth
With the tax cuts and heavy investments in infrastructure and defense, The US economy is bound to accelerate over the current 2.2%. His willingness to raise the debt ceiling and increase public spending is bound to increase the economy’s growth.
9. Over-Strengthening of the Dollar
The focus on strengthening the national economy and rising of long-term interest rates, there is the risk of excessive overvaluation of the dollar. This situation is the combined effect of near-zero interest rates leading to excessive borrowing of the dollar and debt accumulation.
10. Effect on Developing Economies
Trump’s focus on domestic development and usage of local workforce will deeply impact the economies of many developing nations. Those dependent on free trade and foreign financing will be badly hit.