Economics of Trump 2.0
We have been closely monitoring the potential impact of President-Elect Trump’s proposed new mandates on fiscal, tariff and immigration policy on the US and global economy.
Get in touch with our economists and advisors for our trusted outlook on the incoming Trump 2.0 Administration.
Since the election our research has concentrated on quantifying the impact of different tariff regimes on the US and global economy – something we are uniquely placed to do with industry leading global macro model with fully integrated explicit tariffs rates. In the coming weeks we will analyse the impact on the US at a subnational level of a new approach to immigration.
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Policy in Focus
Provisions from the 2017 Tax Cuts and Jobs Act (TCJA), known as the Trump tax cuts, were set to expire at the end of 2025. A Trump victory with a Republican majority forecasts a likely return to a previous or similar tax policy. To inform your decisions-making due to changes in tax policy,
We expect Republicans to support the president-elect’s spending policies. Yet expectations for the legislative agenda could still change in the coming weeks. Our experts and services support actionable insights to inform the impact of tax policy changes to our clients.
A Trump Administration indicate a potential increase in protectionist measures, which we expected under either US election outlook. Digital transformation and supply-chain disruption has allowed global access to strategic sectors.
Republicans administration would likely turn to imposing more tariffs on the rest of the world.
Our analysis suggests that tariffs have been effective at reducing US-China bilateral trade in some sectors, such as electronics, but it also resulted in significant trade diversion to other Asian economies; there is relatively little evidence that the tariff’s imposed by the Trump administration narrowed the US’ trade balance.
Tariffs generally do not make economic sense because they prevent a country from reaping the benefits of specialization, disrupt the movement of goods and services, and lead to a misallocation of resources. The cost of tariffs is often borne by consumers and producers, not paid by the country, or countries that a tariff is levied against.
We expect Democrats to tax cuts from expiring at the end of the year. Our experts and services support actionable insights to inform the impact of tax policy changes of our clients.
We expect Republicans to rush to prevent Trump-era tax cuts from expiring at the end of the year. Our experts and services support actionable insights to inform the impact of tax policy changes of our clients.
The contentious debate over border security unfolded against the backdrop of immigration’s pivotal role in shaping the US economy. Immigration has become the key driver of population and labor force growth. Our forecast for immigration will account for close to 100% of population growth by 2050.
We modeled scenarios for immigration under a second Trump presidency. Contemplating a higher pace of immigration in a new political climate, while a surge of immigrants strains government resources in many areas may hresult in new US policy.
The economic consequences of the demographic shift in the US—characterised by lower births rates, slower net migration and higher death rates—are significant and will require the new administration and policymakers to eventually adopt a balanced and forward-thinking approach to immigration policy. rce: Oxford Economics
President-Elect, President Donald Trump, and the current administration have very different views on climate change and environmental policies. A Trump withdrawal of the US from the Paris Agreement in 2017, an international treaty on climate change, was reversed by the current administration.
The impact of climate change on the economy cannot be overlooked. Besides damages brought by changing weather patterns and more frequent natural disasters, there are significant opportunities in fostering a green economy. This includes the development of renewable energy sources and electric vehicles.
Oxford Economics is poised to release a report assessing the implications of climate change on the US economy. To receive this report directly in your inbox upon its release, you may subscribe to our US election newsletter.
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