Has Trump Overpromised on the US Economy?
Donald Trump has laid out ambitious plans for the US economy, vowing sweeping changes that promise to reinvigorate growth and renew belief in the American Dream.
From slashing taxes and regulations to curbing inflation and reducing the size of government, Trump has painted a vision of a booming economic future. “We’re standing at the doorstep of a magnificent golden age for American business,” he declared during a speech at Mar-a-Lago earlier this month.
However, as the former president prepares to act on these promises, experts warn that his lofty goals may collide with political and economic hurdles, making it difficult to deliver the results he envisions.
Romina Boccia, director of budget and entitlement policy at the Cato Institute, highlights the challenges. “His goals are inherently contradictory,” she noted. “There’s no clear path to achieve everything he’s promised.”
Here’s a closer look at the central promises and the challenges they face.
Tackling Inflation
What Trump Promised:
Trump repeatedly assured Americans that “prices will come down.” It’s a bold statement, considering that prices rarely drop unless triggered by a severe economic downturn. While inflation—defined as the rate of price increases—has already moderated, bringing it under control entirely remains a complex challenge.
Trump’s approach hinges on ramping up US oil and gas production to lower energy costs. But energy prices, along with broader inflationary trends, are largely influenced by factors beyond presidential control.
What Complicates It:
Experts caution that several of Trump’s proposals—such as tax cuts, tariffs, and stricter immigration policies—could exacerbate inflation rather than mitigate it.
John Cochrane, an economist at the Hoover Institution, points to tensions between pro-business Republicans and nationalists focused on trade and border policies. “Both camps can’t get what they want simultaneously,” he said. “That’s the core conflict, and it makes the outcome unpredictable.”
What Trump Voters Think:
Trump’s supporters view his promises as realistic, albeit long-term goals. Amanda Sue Mathis, a 34-year-old from Michigan, believes Trump is capable of delivering. “If anyone can make deals that lower costs for Americans, it’s Donald Trump,” she said, referencing his reputation as a dealmaker.
Tariffs and Trade
What Trump Promised:
One of Trump’s most unconventional proposals is a broad tariff policy, including a blanket 10% tax on all imported goods, with higher rates targeting countries like China. He’s also threatened tariffs against allies such as Canada and Mexico.
Some advisors see these tariffs as leverage for broader negotiations, suggesting a more strategic rollout rather than immediate sweeping action.
What Complicates It:
Economists warn that aggressive tariffs could hurt American consumers by driving up prices and provoke retaliation from trading partners, damaging US businesses.
Given the current stage of the economic cycle, with growth already slowing, even the threat of tariffs creates uncertainty. Oxford Economics estimates that this uncertainty alone could shave up to 0.6% off US growth by mid-2025.
Michael Cembalest, chairman of market strategy at JP Morgan, called the situation precarious. “The appetite for bold moves could lead to breaking something, though what that ‘something’ is remains unclear,” he said.
What Trump Voters Think:
For many Trump supporters, tariffs are seen more as a negotiating tactic than a long-term strategy. Ben Maurer, a 38-year-old from Pennsylvania, said he trusts Trump’s judgment. “I think he’ll be selective about what gets taxed and why. It’s about reviving US manufacturing, not blanket policies.”
Lower Taxes and Smaller Government
What Trump Promised:
Trump has proposed a growth strategy centered on tax cuts, reduced regulation, and smaller government, asserting that these measures will unleash the potential of American businesses.
What Complicates It:
While cutting red tape may spur growth, experts say these efforts take time. Trump is also expected to prioritize extending existing tax cuts over reining in spending. This could result in higher government borrowing, adding to inflationary pressures.
Romina Boccia of the Cato Institute warns that Trump’s plans could significantly increase the national debt, already at record levels. Extending tax cuts alone is projected to add $4.5 trillion to the deficit over the next decade.
Moreover, Trump’s pledge to protect major programs like Social Security limits his ability to reduce spending. Even the much-touted Department of Government Efficiency, led by Elon Musk and Vivek Ramaswamy, has tempered its ambitions.
“The market signals are loud and clear, but Washington seems tone-deaf,” Boccia said. “Politically, it’s easier to take the path of least resistance.”
What Trump Voters Think:
Shrinking government remains a priority for many Trump supporters. Ben Maurer sees cutting bureaucracy as essential. “Government spending is out of control,” he said.
The Verdict
Trump’s economic promises have energized his supporters, but the road ahead is fraught with complexities. From inflation to tariffs and government reform, delivering on his ambitious agenda will require navigating competing priorities and tough political realities.
While the former president is confident in his ability to reignite the economy, analysts caution that achieving such a transformation is easier said than done.
