Has Trump promised too much about the US economy?

Donald Trump has promised major changes for the world’s largest economy.

“An end to the devastating inflationary crisis,” deep cuts in tariffs and taxes, regulation and the size of government are on the agenda.

This combination, he says, will spark an economic boom and revive a withered faith in the American dream.

“We are at the beginning of a great and beautiful golden age of business,” he said from the podium at Mar-a-Lago earlier this month.

But there are warnings over the president-elect that many of his policies could hurt the economy rather than help it.

And as he prepares to put his plans into action, analysts say he is about to encounter political and economic realities that will make it difficult to deliver on all his promises.

“There is currently no clear path to how to meet all of these goals because they are inherently contradictory,” said Romina Boccia, director of budget and rights policy at the Cato Institute.

Here is a closer look at its key promises.

What Trump promised:

“Prices will go down,” he said repeatedly.

It was a risky undertaking: prices rarely fall, unless there is an economic crisis.

Inflation, which measures not price levels but the rate of price increases, has already fallen significantly, although it is difficult to completely eliminate it.

What makes it difficult:

Trump launched his campaign to increase US oil and gas production to an already record high, while reducing energy costs. But the forces affecting inflation and energy prices are largely beyond presidential control.

As much as White House policies make a difference, analysts warn that many of Trump’s ideas — including tax cuts, tariffs and migrant deportations — risk exacerbating the problem.

John Cochrane, an economist at the right-leaning Hoover Institution, said the big question facing the economy is how Trump will balance the “tension” between traditional pro-business parts of his coalition and “nationalists” who focus on issues like border control. and competition with China.

“It’s clear that both camps can’t get what they want,” he said. “That will be the basic story and that’s why we don’t know what will happen.”

What Trump voters want:

Inflation promises were key to Trump’s victory, but by many measures, such as growth and job creation, the overall economy was not in the dire condition he painted on the campaign trail.

Since his victory, he has tried to reduce expectations, warning that it will be “very difficult” to lower prices.

Amanda Sue Mathis, 34, of Michigan, says Trump’s promises are feasible but she thinks it would take time.

“Anyone who can make better deals to make things cheaper for Americans is Donald Trump,” he said. “He literally wrote the book on the art of making deals.”

What Trump promised:

Trump’s most unorthodox economic promise was his vow to impose tariffs — a border tax — of at least 10 percent on all goods coming into the U.S., which would rise to more than 60 percent for products from China.

It has since stepped up its threats against specific countries, including allies such as Canada, Mexico and Denmark.

Some of Trump’s advisers have suggested that the tariffs are negotiating tools for other issues, such as border security, and that he will ultimately settle for a more specific or gradual approach.

What makes it difficult:

The debate has fueled speculation about how aggressive Trump will decide to be, given the potential economic risks.

Analysts say the tariffs are likely to mean higher prices for Americans and pain for companies hit by foreign retaliation.

And unlike Trump’s first term, any measure will come at a delicate time, as the US economic expansion appears to be in its final stages.

Even if the harshest tariffs never materialize, the political debate alone is creating uncertainty that could reduce investment and reduce US growth by 0.6% by mid-2025, according to Oxford Economics.

“They have a very limited margin for error,” Michael Cembalest, president of markets and investment strategy at JP Morgan Asset Management, said in a recent podcast. He warns that the desire for a major innovation has “broken something”, although it remains to be seen.

Trade attorney Everett Eissenstat, who served as a White House economic adviser during Trump’s first term, said he expected a full tariff but acknowledged the plan would compete with other goals.

“There are always tensions. There is never perfection in the world of politics. And of course one of the reasons I think he was re-elected is the concern about inflation,” he said.

“We are in a different world (than in the first term) and we will have to see how that plays out,” he said.

What Trump voters want:

Republican Ben Maurer said Trump wanted to focus on the broader goal of reviving manufacturing in the U.S. rather than tariffs per se.

“I think it’s more of a negotiating tactic than a real policy,” said the 38-year-old, who lives in Pennsylvania.

“Don’t say anything that he’s going to put tariffs on – I think he will – but I think he’s going to be more strategic who sets the tariffs. I accept that and I think his judgment is good enough to decide what to do. tariff.”

What Trump promised:

He has unveiled a plan for growth: lower taxes, less regulation and smaller government, which he says will free up American businesses.

What makes it difficult:

But analysts say cutting regulation could take longer than expected. And Trump is expected to prioritize expiring tax cuts over spending cuts.

Ms. Boccia of the Cato Institute said she expected borrowing to rise under the Trump administration and add to inflationary pressures.

In the financial markets, these concerns have already helped raise interest rates on government debt, he said.

While Trump will also face resistance from those in his own party worried about the high US debt, Ms Boccia said extending the tax cuts – projected to add more than $4.5 trillion to the US debt over the next decade – looked certain.

In contrast, Trump left much of the budget off-limits when he promised to leave major programs such as Social Security unchanged during his campaign.

The so-called Department of Government Efficiency (DOGE), headed by Elon Musk and Vivek Ramaswamy, has also publicly scaled back its ambitions.

“The signals that the market is sending right now are being picked up by economists, but not by Washington,” he said. “Finally, politically, he is taking the path of least resistance.”

What Trump voters want:

Maurer said cutting red tape was key to the administration’s hopes.

“Government spending is absolute madness,” he said.

Additional reporting by Ana Faguy