What Trump’s Policies Mean for the US Economy

The reversal of investment climate on Wall Street at the end of last week strengthened hopes that the US economy would avoid the worst outcomes threatened by Donald Trump’s policies. However, the prospects generated by Trump’s announcements, which led the US economy into turbulence in the past (with rising borrowing costs, stock market volatility, etc.), are still present. It’s simply a matter of time before the climate shifts again, especially since many of Trump’s announced tariffs have yet to be implemented. Despite warnings from several analysts about increased recession risks in the world’s largest economy, Trump insists that his tariff policy will make the US ‘rich’ again. Analysts, however, disagree. According to Fortune magazine, several indicators suggest that the tariff policy will fail and worsen the situation for the American economy: tariffs will burden American consumers, hinder production and employment growth, fail to reduce the trade deficit, and contribute minimally or not at all to shrinking the fiscal deficit. Is a Recession Looming? While Trump claims the US is merely going through a transitional phase, economists and analysts disagree. The Atlanta Fed stated last week that the US economy is on a sharp contraction trajectory in the first quarter of the year. Meanwhile, Goldman Sachs lowered its growth forecast for this year from 2.4% to 1.7% following Trump’s tariff barrage. Even Republican lawmakers and Tesla, led by Trump ally Elon Musk, have raised alarms about the economic cost of Trump’s plans. Senator Susan Collins warned this week that tariffs on Canadian products would have a ‘harmful’ impact on Maine’s economy, while Tesla cautioned that American manufacturers could be ‘unjustly burdened’ by these tariffs. As the Telegraph reports, if the US is indeed heading toward a recession, it will be one largely attributable to the Oval Office as tariffs and extensive federal job cuts take their toll.