Former President Donald Trump’s policies and economic proposals—including tariffs, mass deportations, and exerting influence over the Federal Reserve—could severely damage the U.S. economy, according to a new Peterson Institute for International Economics analysis.
The study found that these policies would lead to higher inflation, slower economic growth, and increased unemployment, lasting effects through 2040.
- Mass Deportations: Trump’s plan to deport millions of undocumented workers could cause a “Covid-like shock” to the U.S. labour market, particularly in sectors like agriculture where 16% of the workforce is undocumented.
- Tariff Increase: Proposed tariffs of 10-20% on all U.S. imports, and a 60% tariff on Chinese goods, would hurt U.S. manufacturing, causing economic harm instead of the “renaissance” Trump promises.
- Fed Interference: Trump’s suggestion to influence interest rate decisions could undermine Federal Reserve independence, leading to permanently higher inflation and harming the U.S. dollar.
The Peterson Institute report paints a stark picture of the potential economic fallout, suggesting that these policies would hurt U.S. employment, inflate prices, and hinder growth, making life harder for American consumers.
Response from Trump Campaign:
Trump’s campaign dismissed the warnings, stating that predictions of economic doom during his previous term were proven wrong. They argue that his policies will drive growth, reduce inflation, and benefit American workers.
However, the Peterson Institute warns that the consequences could be severe, with inflation reaching 6-9% by 2026 and U.S. GDP dropping significantly.
With voters prioritizing the economy in the upcoming election, the debate over Trump’s policies and their long-term effects is heating up.
