Did Trump promise too much on the American economy?

Donald Trump has promised big changes for the world’s largest economy.

“An end to the devastating inflationary crisis,” tariffs and deep tax cuts, regulation and the size of government are all on the agenda.

This combination, he says, will spark an economic boom and revive withering faith in the American dream.

“We are at the beginning of a great, beautiful golden age of business,” he promised from the podium at Mar-a-Lago earlier this month.

But the president-elect faces warnings that many of his policies are more likely to harm the economy than help it.

And as he prepares to put his plans into action, analysts say he is about to run into political and economic realities that will make it difficult to keep all of his promises.

“There is no clear path at this time to achieve all of these goals, because they are inherently contradictory,” said Romina Boccia, director of budget and rights policy at the Cato Institute.

Here’s a closer look at its key promises.

What Trump promised:

“Prices will go down,” he said several times.

It was a risky undertaking: prices rarely fall, except in times of economic crisis.

Inflation, which measures not the level of prices but the rate of price increases, has already fallen significantly, although it is proving difficult to eradicate completely.

What complicates things:

Trump backed his claim with promises to increase already record U.S. oil and gas production, thereby reducing energy costs. But the forces that affect inflation and energy prices are mostly beyond presidential control.

To the extent that White House policies make a difference, analysts have warned that many of Trump’s ideas — including tax cuts, tariffs and migrant expulsions — risk making the problem worse.

Economist John Cochrane of the right-wing Hoover Institution said the big question facing the economy is how Trump will juggle “tensions” between the more traditional business-friendly parts of his coalition and “nationalists” who focus on issues such as border control. and rivalry with China.

“Obviously both sides can’t get what they want,” he said. “That’s going to be the fundamental story and that’s why we don’t know what’s going to happen.”

What Trump voters want:

Inflation promises were key to Trump’s victory, but in many ways, like growth and job creation, the economy as a whole was not in the dire straits he had described during the electoral campaign.

Since his victory, he has tried to lower expectations, warning that it would be “very difficult” to bring prices down.

Amanda Sue Mathis, 34, of Michigan, says Trump’s promises are achievable but could take time.

“If anyone can make better deals to make things more affordable for Americans, it’s Donald Trump,” she said. “He literally wrote the book on the art of closing deals.”

What Trump promised:

Trump’s most unorthodox economic promise was to impose tariffs – a border tax – of at least 10% on all goods entering the United States, rising to more than 60% for products from China.

It has since stepped up its threats against specific countries, including allies like Canada, Mexico and Denmark.

Some Trump advisers have suggested that tariffs are negotiating tools for other issues, like border security, and that he would ultimately settle for a more targeted or gradual approach.

What complicates things:

The debate sparked speculation about how aggressive Trump would be, given the potential economic risks.

Analysts say the tariffs will likely lead to higher prices for Americans and pain for businesses hit by foreign retaliation.

And unlike Trump’s first term, any measures will come at a delicate time, when America’s long economic expansion appears to be in its final stages.

Even if the toughest tariffs never materialize, the political debate alone generates uncertainty that could depress investment and reduce U.S. growth by as much as 0.6% by mid-2025 , according to Oxford Economics.

“They have a very limited margin for error,” Michael Cembalest, president of market and investment strategy at JP Morgan Asset Management, said in a recent podcast. He warned that the desire for a major overhaul risks “breaking something”, although that remains to be seen.

Trade lawyer Everett Eissenstat, who served as a White House economic adviser during Trump’s first term, said he expected a broad-based tariff but acknowledged the plan would compete with other other objectives.

“There’s always tension. There’s never perfection in politics. And obviously one of the reasons I think he was re-elected is concern about inflation,” he said. he declared.

What Trump voters want:

Longtime Republican Ben Maurer said he wanted Trump to focus on the broader goal of reviving U.S. manufacturing, rather than tariffs per se.

“I feel like this is more of a negotiating tactic than a real political path,” said the 38-year-old who lives in Pennsylvania.

“I’m not saying he won’t put tariffs on anything – I think he will – but I think it will be more strategic about what he puts tariffs on. I support that and feel like his judgment is pretty good in deciding what to do.”

What Trump promised:

He laid out a plan for growth — lower taxes, less regulation and smaller government, which he says will free up American business.

What complicates things:

But analysts say reducing regulation could take longer than expected. And Trump is widely expected to prioritize extending expiring tax cuts over cutting spending.

Ms. Boccia, of the Cato Institute, said she expected borrowing to increase under the Trump administration and that the increase would add to inflationary pressures.

In financial markets, these concerns have already helped drive up interest rates on public debt in recent weeks, she noted.

Although Trump will also face some resistance from those within his party who are concerned about the already high level of US debt, Boccia said extending the tax cuts – which are expected to add more of $4.5 trillion to the U.S. debt over the next decade – seemed almost certain.

In contrast, Trump banned much of the budget during his campaign when he promised to leave major programs, such as Social Security, unchanged.

The so-called Department of Government Effectiveness (DOGE), led by Elon Musk and Vivek Ramaswamy, has also publicly scaled back its ambitions.

What Trump voters want:

Mr. Maurer said cutting bureaucracy was key to his hopes for the administration.

“Government spending is absolute madness,” he said.

Additional reporting by Ana Faguy