High profile attacks on Mexicans, Muslims, China and the disabled – and sheer disbelief that he could actually become President – have obscured Donald Trump’s economic policy programme.
As he stokes up the prospect of more hostility and continues to criticise immigrants, observers could be forgiven for thinking he doesn’t even have one. But his unashamedly reactionary campaign trail has also seen Trump turn on several aspects of US capitalism, including verbal assaults on big corporations and large mergers and acquisitions.
The US economy is in a fragile state, with the Federal Reserve earlier this month lowering its economic growth outlook for the year to 2.2 per cent, compared with 2.4 per cent previously, while many remain nervous about the global economy.
Against this backdrop, the Economist Intelligence Unit ranked Trump sixth on its list of the world’s biggest risks due to his “exceptionally hostile attitude towards free trade” and alienation of Mexico and China in particular which “could escalate rapidly into a trade war”.
Some of Trump’s policies include increasing tariffs on Chinese goods with the supposed aim of boosting domestic manufacturing and creating more American jobs.
He’s even decided to boycott Oreos, because its parent company was closing a factory in Chicago and moving to Mexico. This policy, like other Trump ideas, has been slammed by academics, with Nobel Prize-winning Paul Krugman arguing that “his economics is all wrong”.
His most virulent attacks have been on immigrants. Trump says a wall with Mexico and mass deportation (11m undocumented migrants) will result in more jobs for US citizens – a claim that perpetuates what economists call the lump of labour fallacy.
The billionaire also wants everyone earning $25,000 (£17,000) a year or less to pay no income tax, the top rate to come down from 39.6 per cent to 25 per cent and corporation tax set at 15 per cent. The Tax Policy Centre estimates his polices will cut almost $9.5 trillion from federal revenues over the next 10 years.
“The plan would improve incentives to work, save, and invest. However, unless it is accompanied by very large spending cuts, it could increase the national debt by nearly 80 per cent of gross domestic product by 2036, offsetting some or all of the incentive effects of the tax cuts,” it says.
Mitt Romney, the former presidential candidate, is one of many Republicans to have slated Trump’s policies.
Tom Donohue, head of the US Chambers of Commerce, said his immigration and trade polices are particularly harmful to the economy.
It might be fortunate, then, that he’d be unlikely to implement many of the changes should he be elected, as Congress would block him at every turn.
Astonishingly, a poll of some deal-makers in the US has shown that many are not worried about the prospect of President Trump. Indeed, 22 per cent of respondents named Trump when asked: “Which candidate would represent the best outcome for deal-making and corporate interests?” That put him top, narrowly above Hillary Clinton on 21 per cent, while John Kasich polled 19 per cent.
Whether or not he would harm Wall Street, Trump’s economic actions in office are as uncertain as what he would do in other policy areas. The world of business watches on, with mounting concern.