Experts are alarmed Is Donald Trump driving the US economy to the wall?
Donald Trump inherited a stable economy from Joe Biden. Experts are now warning against many of Trump's measures: They could at least slow down growth - or worse.
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- Economic experts fear that Donald Trump's policies could jeopardize the growth of the US economy.
- Measures such as the trade war with important trading partners such as China, Canada and Mexico, the strict anti-migration policy and the layoffs of federal employees are to blame.
- The fact that Donald Trump is not always reliable in the implementation of his plans is as much a cause for hope as it is for fear.
When Joe Biden left office, the American economy was doing relatively well: wages and profits were rising and the inflation rate was falling. Now experts are sounding the alarm: Donald Trump's foray against trading partners such as China and Canada and his anti-migration measures could have devastating consequences.
This was reported by the New York Times, citing various economic commentators. According to the paper, which is close to the Democrats, most of them believe that Trump's policies will slow down current growth. A few even believe it could herald a recession: The US economy would then start to contract again.
Higher prices, less purchasing power
However, conservatives such as Michael R. Strain are also among the experts projecting negative economic development in the USA under Trump. "What President Trump is planning," says Strain, "will take money out of people's pockets. It will lead to more unemployment. It will make American companies less competitive." Already last February, the first full month under Trump, the unemployment rate rose.
The chaos surrounding the declaration and withdrawal of several punitive tariffs on goods from China, Canada and Mexico - the USA's three largest trading partners - has caused a great deal of uncertainty. The confrontation with these countries also has a double negative effect: goods are becoming more expensive, while at the same time many Americans are losing their jobs - especially federal employees, whose jobs are being slashed by Elon Musk on Trump's orders.
It can therefore be assumed that the population will have less money available to stimulate the economy again - with rising prices. However, lowering interest rates, which could actually counteract such a development, is not an option because it could lead to renewed inflation in the face of rising prices.
Trump's unreliability could be a curse or a blessing
Trump's anti-migration measures, which provide for millions of deportations, could also lead to a shortage of workers in the construction and healthcare sectors. What gives hope, however, is that Trump rarely pushes through his plans in full - or is tripped up by the judiciary.
So far, far fewer immigrants have been deported than the president had promised. He has often reversed his punitive tariffs within days. And Musk's downsizing is being made more difficult by the courts. Most recently, even Trump himself called on the billionaire to exercise restraint.
Ultimately, there are many uncertain variables that make forecasting difficult - but this uncertainty is itself a disruptive factor. So is the US economy now on the decline? "It's not that the economy is in for a car crash," says Michael Madowitz, an expert at the progressive Roosevelt Institute. "It's more like they've started smoking a pack of cigarettes a day."
