The newly elected U.S. President Donald Trump has proposed a series of policies that could have profound impacts on the economy. These include imposing high tariffs on imported goods and accelerating the deportation of illegal immigrants. While these policies have garnered support from some voters, they may also pose challenges to economic growth and inflation.
Current Economic Situation: Strong Growth Amid Low Confidence
The U.S. economy that Trump inherits shows robust indicators with a low unemployment rate and steady growth figures. However, the general public has not fully felt these benefits. Consumer confidence remains low, and although inflation has eased somewhat, price levels are still higher than in the past, impacting consumer sentiment.
Policy Focus: Coexistence of Tax Cuts and Debt Issues
One of the core components of Trump's economic policy is extending the tax cuts set to expire at the end of 2025. This policy aims to avoid fiscal tightening rather than injecting additional economic stimulus. However, continuing the tax cuts may present challenges to debt levels. U.S. debt is already approaching 100% of GDP and is expected to reach 120% of GDP in the next decade, exacerbating fiscal pressure.
Tariff Impact: Rising Prices and Increased Inflationary Pressure
During Trump's first term, he frequently used tariffs as a negotiation tool to force concessions from other countries. It is expected that a 10% universal tariff will be introduced, with higher tariffs on China. Experts believe this will lead to rising consumer goods prices and increase the inflation rate by about 1 percentage point. However, this change is a one-time effect rather than ongoing inflation.
Immigration Policy: Double-Sided Supply and Demand Impact
Trump plans to deport illegal immigrants on a large scale, a move that would not only affect the supply side of the economy but also reduce demand, as the consumption activities of illegal immigrants would disappear. Industries that rely on immigrant labor such as construction, agriculture, food processing, and catering could face the most significant impact, with potential increases in food and dining prices.
Economic Outlook: Slower Growth and Inflation Pressure
Overall, immigration policies and tariff measures are expected to reduce the U.S. economic growth rate by 0.5 percentage points while increasing inflation by 1%. Although challenging, the economic situation has not yet reached a catastrophic level.
Markets and consumers are highly concerned about this, and the intensity and direction of future policy implementations will determine their actual impact on the economy.
