Trump looks to be storming through the Republican GOP and is by far the favorite to take on Biden in the Presidential race. But what could Trump’s revenge promises and unpredictable personality to do the economy? Here’s what we know.
A Return of Trump Looms
Donald Trump secured a significant victory in Iowa’s caucuses, and a second term in the Oval Office seems more likely by the minute.
Corporate executives, once relieved by his departure in 2021, are now starting to imagine what a second term could mean for the U.S. economy.
The Chaos Trade Dilemma
Some leaders of large organizations expressed deep concern over the prospect of “Trump 2.0,” others welcome what they term the “chaos trade.”
An Uneasy Relationship
The relationship between corporate executives and President Trump during his initial tenure was uneasy.
Some CEOs distanced themselves from his most controversial statements, and some CEOs found solace in his conventional policies.
Biden’s Policies
Corporate leaders harbor grievances about Joe Biden’s policies, particularly concerning figures like Lina Khan of the Federal Trade Commission and Gary Gensler of the Securities and Exchange Commission.
“Endgame” Concern
The administration is pushing for higher corporate taxes, disgruntling the mentioned corporate names, and adherence to Basel III “Endgame” regulations have made it harder for larger businesses to profit.
Trump’s Economic Management
“Trumponomics” and “Bidenomics” undoubtedly clash, with the latter looking to raise taxes on corporations, while the other looked to cut taxes.
Trumponomics Revealed
In Trump’s case, his economic plan raises further alarms, due to his chaotic approach and unpredictable nature, potentially putting companies at risk.
Trump’s Surprisingly Successful Term
In Trump’s first term, the economy performed better than expected, benefiting from a more moderate Trumponomics than initially promised. But would this work today? That’s the question on critics’ lips.
Changing Economic Conditions
Present economic conditions reveal a tighter labor market than when Trump came to power in 2017, with unemployment rates lower.
The Federal Reserve’s efforts to combat inflation could result in the economy being stretched to its limits.
Worsening Budget Conditions
Forecasts for the 2024 budget indicate a 5.8% deficit and 100% debt as a percentage of GDP, so pursuing tax cuts under these conditions could force the Federal Reserve to increase interest rates.
The Central Bank Dilemma
The potential for Latin American-style pressure on the Federal Reserve to keep rates low looms, as seen in Trump’s previous term.
The risk of inflation is only made worse by tariffs, which could affect economic growth and stability.
Tariffs and Trade Restrictions
While businesses may not welcome further trade restrictions, the possibility of a 60% tariff on imports from China is very real. The administration’s stance on renewable energy are supported, but Trump calls it a “scam.”
The Immigration Crisis
Trump’s promise to hold large-scale deportations could have a detrimental effect on the already suffering labor market, as immigrants are needed to take care of a huge number of jobs in the country.
Trump’s Unpredictability
The unpredictable nature of Donald Trump makes a second term a cause for concern regardless of these other factors. He has a management style that shows a lack of fixed beliefs, and potential for sudden policy reversals.
The Revenge Presidency
Trump’s promises of revenge and retribution against those who he believes wronged him in the past, are another cause for concern, as this could cause the potential President to act rashly without any fears of the economic consequences.
Trump’s Iowa Promise
In a recent rally in Iowa, Trump promised his followers that there’s no way he’ll find the time to act on his retribution promises, as he’ll be too busy with important business. Still, his recent email to fans says otherwise.
Trump’s Retribution Email
Trump’s team sent out an email just hours before his rally cry, with the subject line that read “I am your retribution!” showing Trump’s tendency to say whatever he deems is right for that time and place.
A Repeat of a Dark Day
If Trump’s Presidency is as largely focused on revenge as he promised, it could lead to more uprisings. Some even say it could lead to repeats of the January 6th riots.
All Directions Possible
A Trump 2.0 could have damaging effects on the economy due to Trump’s unpredictable nature, even more damaging than the first.
However, this unpredictability comes with some hope since his last tenure wasn’t nearly as devastating as he promised in the campaigns.
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Oscar Davies, an expert in US and UK politics and sports, is renowned for his sharp and engaging writing style, appealing to a broad spectrum of readers.