Quantifying the hit to industry from a second Trump presidency

Using our Global Industry Model, we have modelled the sectoral impacts of two scenarios in which former President Donald Trump returns to the White House and Republicans gain full control of congress. US industrial performance would take a hit, with engineering & metal goods, motor vehicles & parts, and basic metals the most affected.

What you will learn:

• Under a “limited Trump” scenario, US industrial value-added output would fall 0.8% below our baseline forecast by 2029. However, under a “full-blown Trump” scenario, in which the Trump agenda is enacted in full, US industrial output would fall 2.4% below baseline.
• A Trump presidency would hamper industrial activity through two direct channels: a full or partial repeal of the Inflation Reduction Act (IRA), and heavy tariffs on imported goods. These measures would reduce investment in certain industries and raise input costs for import-intensive sectors.
• However, the more wide-ranging effects for US industry will be felt through weaker economy-wide demand as the inflationary impact of reduced immigration and additional tariffs results in higher interest rates, lower consumer spending, and weaker business investment. This will be compounded by weaker external demand as trading partners impose retaliatory tariffs.