Global | How will Trump 2.0 impact the economy?

Summary

Donald Trump won the U.S. presidential elections. What's more, the Republicans will hold the majority of both houses, allowing them to push through their fiscal plans. What promises has he made and, if he delivers them, how could they impact the global economy?

Key points

• Key points:
• Trump's key economic proposals include imposing tariffs of 10-20% on imports from all countries except China, for which he plans to levy a 60% tariff, and cutting taxes for businesses and individuals.
• He also promises to stem the flow of migrants, implementing mass deportations of undocumented migrants, and has plans for "financial deregulation" which, in theory, could be positive, although the scope has yet to be determined.
• On tariff policy, Trump's promises would result in lower economic growth for the U.S. economy–and also for the global economy–since production would be more inefficient when facing tariffs on inputs.
• The decrease in taxes may represent a boost to growth in the short term.
• The promises on migration policy would result in a contraction of labor supply and, with it, lower structural growth and inflationary pressures.

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