Trump Is Inheriting a Strong Economy. Will He Wreck It?
The Republican president-elect sent one message to voters, but the economic team he's building sends another.
In his second presidency, Donald Trump aims to break many things: the federal bureaucracy, the rule of law, America’s international security alliances. But is he planning to break the US economy, too?
It’s not a flippant question. Campaign demagoguery notwithstanding, outgoing President Joe Biden will leave his successor an unusually strong economic hand, with solid growth, rising wages, and falling inflation that has made the US the envy of the world. Trump’s stated economic plans would put all of that at risk – if he actually follows through.
What Trump told voters sends one message about his intentions. His choices for key positions in the administration send another.
The most incendiary of Trump’s picks have drawn the most attention. For attorney general, a Florida congressman so odious that Republican senators nixed him within days; for the Pentagon, a Fox News host with many skeletons and no experience; for health secretary, a conspiracy-minded vaccine skeptic. Senators haven’t even wrestled yet with the zealot Trump wants to run the FBI.
But Trump has taken a calmer approach in building his economic team. Kevin Hassett, a conservative veteran of the first Trump White House with previous stints advising George W. Bush, John McCain, and Mitt Romney, will run the National Economic Council. Jamieson Greer, chief of staff for trade representative Robert Lighthizer in Trump’s first term, will move up to his former boss’s job. And for treasury secretary, Trump tapped wealthy hedge fund ace Scott Bessent.
With a resume that includes work with billionaire investor and conservative bête noire George Soros, Bessent has won bipartisan praise as a mainstream choice. He hasn’t hidden his unease with Trump’s plan for massive tariffs, labeling them a tactic for negotiating with other countries.
That’s significant because the tariffs the president-elect has signaled – 20% across the board and 60% on Chinese goods – would wreak havoc. They would raise the cost of goods here and invite retaliation that would harm US exporters, leaving American consumers and businesses to suffer the consequences of a trade war.
Trump’s plan to round up and deport millions of residents living here without legal permission would prove similarly damaging. In addition to the horrendous human toll, it would deprive the economy of badly needed workers and taxpayers, constraining growth, fueling inflation, and exacerbating the challenge of financing retirement benefits for our swelling elderly population.
Promises vs Ego
What’s impossible to gauge in advance is Trump’s determination to withstand public and political resistance to both his objectives. His carnival barker’s bluster has long since grown familiar.