The economic issue is one of the key factors that helped Mr. Trump win this year's election - partly because voters are not satisfied with the current situation, while the specific commitments of the President-elect have "hit the bull's eye".
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| Americans are again expecting Mr. Trump's commitments to make "America great again!" (Source: Getty Images) |
The media believes that American voters are still nostalgic for the period of low inflation and relatively good economic growth during Mr. Trump's first term, before the Covid-19 pandemic. At that time, in the early years of his first term (2017-2021), Mr. Trump was assessed to have brought better economic results than expected when he was elected. This time, Americans are again expecting Mr. Trump's commitments - to make "America great again!".
Restart old policy
This year, investors often talk about the possibility of a “soft landing” when analyzing factors in the world’s largest economy. However, the re-election of Donald Trump as US President for the 2025-2029 term makes everything much more unpredictable.
Nobel Prize-winning economist and Columbia University professor Joseph Stiglitz believes that the US economy is in a “soft landing” phase, but this phase could end on January 20, 2025 - when Mr. Trump officially returns to the White House.
Mr. Trump and his allies have laid out a comprehensive and ambitious conservative agenda for his first 100 days. Observers say the top priorities are likely to be the most talked-about campaign pledges on immigration and a series of economic reforms. The next “arrows” will target some of the current administration’s policies, while continuing to restart old policies from where he left off after his first term.
The bureaucracy and negotiations could delay the president-elect’s plans somewhat. But as the Wall Street Journal reports, Mr. Trump’s first chance to make his economic mark in office will be on tariffs — an area where he can act without congressional approval.
Section 301 of the US Trade Act of 1974 allows him to do just that, to stop what he considers unfair trade practices or practices that are harmful to the national interest.
The economic tools most frequently mentioned during the campaign were comprehensive tariffs on imports and a plan to reduce domestic taxes. As he had said before the election, he threatened to impose tariffs of 10% or more on all imports and up to 60% on Chinese goods.
Some fear that if Trump follows through on his campaign promises, the U.S. economy could face a surge in inflation, as his proposed policies, such as higher tariffs on imports, domestic tax cuts and immigration restrictions, are likely to cause higher inflation.
In fact, the above policies may stimulate growth, but they also put great pressure on the already high federal budget deficit and force the US Federal Reserve (Fed) to reconsider its interest rate path.
From another perspective, Minneapolis Fed President Neel Kashkari noted the possibility of other countries retaliating in a trade war, in which case inflation could remain high in the long run.
More optimistically, Scott Paul, President of the Alliance for American Manufacturing, said that the President-elect's economic agenda is not only to stimulate economic growth and revive American manufacturing, but also to restore good jobs and reduce dependence on China.
“There are definitely losses. But in many cases, I think they're worth it,” said Scott Paul.
Another reason is that the economy that Trump has taken over is looking pretty good. GDP continues to grow steadily despite interest rate hikes, retail sales have beaten forecasts, unemployment is hovering around 4%, and inflation has fallen from its peak to near its 2% target. Moreover, the Fed has entered a monetary easing cycle, which should keep the risk of a recession to a minimum.
Golden age of AI?
Another high-profile pledge from Mr. Trump is to cut climate subsidies, repeal some environmental policies from the current President’s Deflationary Act and further expand oil exploration and production, including tax breaks for oil, gas and coal producers.
“We will unleash American energy and I will cut energy prices in half within a year starting January 20,” Mr. Trump declared at a campaign rally at Madison Square Garden, New York last month.
However, Mr. Trump's second term will not only make America an "energy nation" as the slogan "Drill, Baby, Drill!" suggests.
Artificial intelligence (AI) will also be part of “a new golden age for America,” Trump said at the Republican National Convention in July. “He said, AI is scary, but we have to win, or China will win,” said two prominent innovators, Marc Andreessen and Ben Horowitz, referring to another Trump statement.
Silicon Valley is now showing goodwill to the President-elect because he has promised to strongly support AI development, in competition with the world's second most powerful economy - China.
“I wish Donald Trump every success in leading and uniting the America we all love,” Amazon CEO Jeff Bezos was not the only big tech leader to send goodwill to Mr. Trump. A series of big names in the technology industry such as Google, Apple, Microsoft Satya Nadella and OpenAI announced their “desire to collaborate” to strengthen the US leadership role.
This time, big tech’s enthusiasm is a far cry from their own lukewarm response to Mr Trump’s victory in 2016 — when they didn’t even entertain an invitation from the White House.
Mr. Trump is expected to become an ally of American technology corporations in the fight with the European Union (EU). In addition, antitrust and competition policies may also be relaxed for big tech because the President-elect needs them in the trade war with Beijing.
As Mr. Trump prepares to return to the White House, Republicans say they will act aggressively to push back against the agenda set by the President-elect.
And as House Speaker Mike Johnson told reporters, in the spirit of “fixing almost everything,” they’ll start by securing the border — something the American people demand and deserve. Then they’ll go straight into the economy.”
Source: https://baoquocte.vn/danh-doi-xung-dang-cua-ong-trump-294536.html
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