Former President Donald Trump is using the issue of high inflation as one of his anchor issues to seek a return to the presidency of the United States in the next elections.
Trump is betting on the decline in President Joe Biden’s approval rating, which has been affected by the weight of inflation, as voters consider it to be the main issue in the 2024 elections.
Biden has tried to bring inflation back to pre-pandemic levels, and although the index has retreated, he has failed to prevent Americans from continuing to pay high prices.
Trump has used the issue to attack Biden, because he knows he can build a decisive lead in polls on the economy. However, a report by Zachary Basu of Axios emphasizes that at least four of the fundamental principles of Trump’s economic philosophy carry significant inflationary risks:
1. Universal tariffs
Trump proposes tariffs of 10% on all imports, 100% on cars manufactured outside the US and a minimum tariff of 60% on Chinese products, which would probably trigger a global trade war if it materialized. massive, with consequences that would amount to an annual tax increase of approximately $1,500 for a typical household.
2. Lower interest rates
As President, Trump criticized the Federal Reserve (FED) for not drastically reducing interest rates to compete with other countries, but raising interest rates is the FED’s main tool to combat inflation.
Trump is said to have plans to undermine the independence of the FED and allow the president to have more influence on the central bank’s rate decisions, which is not appropriate to help control prices.
3. Tax reduction
Republicans are seeking to extend the tax cuts, which would cost about $3.3 trillion over the next decade.
Tax cuts can indeed make life cheaper, but more money in the economy stimulates consumer demand, which would lead to a further rise in prices.
4. Limits on immigration
Trump plans to execute the largest domestic deportation operation in US history, planning mass detention camps and raids targeting millions of undocumented immigrants.
Economists believe that last year’s increase in immigration allowed the labor market to continue booming without increasing inflationary pressures. But Trump’s plans could increase labor shortages and reignite inflation.
On the other hand, Robert Lighthizer, Trump’s former trade chief, wants to devalue the US dollar, which would certainly be a major change in monetary policy that could skyrocket the prices of imported goods. The point is worrying because Lighthizer
he will likely take a position in a future administration if Trump wins.
The topic is cause for reflection, since almost 9 out of 10 Americans think that the economy and inflation will be the most important issues that will determine who they support for the presidency in the next elections.
Keep reading:
· Project 2025: they warn that the immigration policy recommended for Trump is a “plan for chaos”
· The articles that rose the most in the last year in the US, until March 2024
· BLS reports that inflation in March 2024 was 3.5% in the US.