Trump Won the Election: 3 Changes That Could Be Coming to the Economy in the Next 4 Years
Written by
T. Woods
Edited by
Angela Corry
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President-elect Donald Trump’s surprising and historic return to the White House in January 2025 will bring questions as to how the real estate mogul’s second administration will reshape the American economy for the next four years.
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To make such predictions, one can look to his first presidency, as well as promises and assertions he’s made on the campaign trail, from tariffs to deportations to massive deregulation.
Tax Cuts
As NPR has reported, an extremely business-friendly administration can be expected from “Trump 2.0.” The former and future president has made clear his goal to implement corporate tax cuts to drive business.
He has also made clear his desire to extend the tax cuts he implemented in 2017, which are scheduled to expire in 2025. Additionally, he has suggested preventing the federal government from taxing Social Security and tipped income. Given that Republicans now hold a congressional majority, it is very likely that a good deal of Trump’s tax cuts will be passed, especially his 2017 tax cut extension.
Tariffs
A rather contentious and controversial part of Trump’s economic strategy is his reliance upon tariffs — that is, taxes imposed on goods imported into America from foreign countries. When Trump implemented tariffs in his previous administration, the result was higher prices here at home — importers raised their prices to make up for the tariffs, a result of which were higher prices for American consumers. Such a decision by the Trump administration could slow or even halt any economic growth spurred by Trump’s tax cuts.
Interest Rates
Due to a softening of inflation, the Federal Reserve has begun cutting interest rates. However, NPR reported that the Fed may become hesitant to continue cutting rates “if Trump’s policies put more upward pressure on prices,” and that fewer rate cuts are expected in 2025 “as a result of Trump’s election.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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