President Donald Trump's Economic Plans and Policies
And How They Impact the U.S. Economy
Republican Donald John Trump is the 45th president of the United States. His first term is from 2017 to 2021. President Trump's initial campaign in 2016 focused on "making America great again." He focused on gaining the support of voters who felt they had lost the American Dream. With that in mind, Trump's economic policies follow economic nationalism.
This hasn't changed much for the 2020 election, in which he is running against Democratic candidate and former Vice President Joe Biden. Learn more about President Trump's economic policies to better understand what his re-election could mean for the U.S.
Trump's "America First" energy plan started with an announcement in June 2017 that the U.S. would withdraw from the Paris Climate Agreement. The Paris Climate Agreement has 195 signatories that pledged to cut their greenhouse-gas emissions to keep global warming from worsening any more than 2 degrees Celsius above pre-industrial levels.
A 2018 study found that temperatures above that level would pass a tipping point. Even if greenhouses gases were reduced, irreversible biogeophysical feedbacks in the climate would create a "Hothouse Earth." For example, the Amazon could become a savanna and Antarctic sea ice would keep melting
The U.S. is responsible for about 28% of the world's carbon emissions. The other signatories can't reach the accord's goal without U.S. participation.
In 2017, Trump also rescinded the Climate Action Plan. He has allowed more drilling for oil on federal lands. He weakened the Clean Power Plan which limited carbon emissions at U.S. power plants.
Trump's trade policies seek to reduce the U.S. trade deficit. His first action was the U.S. withdrawal from further negotiations on the Trans-Pacific Partnership. The 11 other countries completed the trade agreement without the U.S.
The North American Free Trade Agreement (NAFTA) was the world's largest trade agreement. The Trump administration renegotiated NAFTA with Canada and Mexico, creating the United States-Mexico-Canada Agreement. The most significant change is that auto companies must manufacture more parts in the NAFTA trade area.
In 2018, Trump withdrew the U.S. from the Iran nuclear deal because Iran was not compliant. The agreement had been signed in 2015 to remove sanctions on Iran's oil exports in exchange for a reduction in the country's nuclear program.
In March 2018, the Trump administration announced a 25% tariff on steel and a 10% tariff on aluminum imports. The Alliance of Automobile Manufacturers warned that U.S.-produced steel will cost more once cheap foreign imports are eliminated. The tariffs “raise vehicle prices for all customers, limit consumer choice, and invite retaliatory action by our trading partners.”
The administration imposed three tariffs on a total of $250 billion in Chinese imports. The Federal Reserve estimated these tariffs would cost the average household $419 per year.
In 2019, President Trump imposed a fourth tariff. He raised tariffs to 25% on $200 billion worth of goods. The Fed estimated that this tariff combined with the previous 2018 tariffs would cost the average household $831 a year.
China retaliated with tariffs on $110 billion of U.S. products. In December 2019, Trump announced a trade deal between the U.S. and China. In the deal, China agreed to increase imports of U.S. goods by $200 billion annually and the U.S. agreed to cut tariffs on some goods by half.
Trump's health care policies focus on three areas: the COVID-19 pandemic, weakening Obamacare, and reducing drug costs.
On March 13, 2020, Trump proclaimed a national emergency to control the spread of the pandemic. He signed four stimulus laws that provided a record $2.5 trillion to agencies, businesses, and families dealing with the crisis.
He launched Operation Warp Speed to develop and distribute safe vaccines and treatments in record time. He used the Defense Product Act to produce 100,000 ventilators.
Two-thirds (67%) of Americans said that President Trump's response to the pandemic was too slow, according to a Sept. 13, 2020 poll. More than 186,000 Americans had died by the time the poll was launched.
The New England Journal of Medicine said the U.S. didn't adequately test nor provide health care workers and the general public with enough protective equipment. The administration delegated disease control to the states instead of launching a national strategy, and states don't possess the same tools as the federal government. As a result, social distancing directives were inconsistent and not uniformly enforced.
During his campaign, Trump promised to repeal and replace Obamacare. Although he wasn't successful, Trump launched many initiatives that weakened the law. The Tax Cuts and Jobs Act repealed the Affordable Care Act's (ACA) tax penalties for those who don't get insurance. That removed the incentive for healthy people to get coverage. As healthy people drop coverage, health insurance companies may end up with the sickest and costliest to treat, which can increase costs for everyone.
President Trump weakened Medicaid by allowing states to impose work requirements on recipients. The requirement targeted the small percentage of childless single adults to whom the ACA expanded benefits.
To lower drug prices, Trump signed a 2020 executive order requiring health centers to pass any discounts on insulin and epinephrine to their patients. Through participating, enhanced Medicare Part D plans, a month's supply of insulin was available for a $35 co-pay.
The U.S. Debt
Trump promised to eliminate the national debt in eight years. Instead, the debt increased by almost 36% in less than four years. In October 2020, it surpassed $27 trillion.
In a CNN interview, Trump said the U.S. will never default on its debt because it can print the money. This approach could result in a major financial crisis. Excessive printing of money would create hyperinflation. At the very least, interest rates would rise as creditors lost faith in U.S. Treasurys. At its worst, it would send the dollar into a collapse, creating another Great Depression.
Trump's immigration policies focus on restricting legal immigration, completing the wall along the border with Mexico, and reducing the number of refugees and asylum seekers by making the application process difficult.
In 2019, the Trump administration set stricter standards for legal immigration applicants. Those who use or may need public benefits like Medicaid, food stamps, or housing aid may not receive their desired immigration status. As a result, it rewards those with higher incomes and private health insurance.
Trump's policies reduced the number of immigrant visas issued between 2016 and 2019, from 617,752 to 462,422 over the course of three years.
A crucial part of Trump's plan is to complete the wall along the 1,954-mile U.S. border with Mexico. The George W. Bush administration had completed 650 miles. Trump added another 370 miles, with a goal to complete 450 miles by December 2020.
Asylum Seekers and Refugees
In 2018, the Trump administration increased the requirements for the refugee screening process. As a result, only 22,491 refugees were resettled that year, the lowest figure since 1980.
Trump tried many tactics to reduce the number of asylum seekers. He briefly separated immigrant children from their parents before ending the policy due to popular outcry. Trump ordered that asylum seekers be returned to Mexico while waiting for the outcome of their hearings. Unfortunately, their return puts them in dangerous living conditions, without access to immigration lawyers. In the camps, there have been reports of rape, torture, and kidnapping, too.
President Trump faces an uphill battle in stopping immigration because conditions in some Latin American countries are so bad. Half of Central American immigrants left because there wasn't enough food.
President Trump wants to ensure that open jobs are offered to American workers first. The "Buy American" program required federal agencies to prefer buying American-made goods and services.
In 2016, Trump said he would create 25 million jobs. That would have been more jobs than another other president created, beating the more than 18 million jobs created by President Bill Clinton.
To create jobs, President Trump launched the Rebuild America plan. It outlined $200 billion in spending over 10 years to leverage billions in business spending and would reduce permit process time by eight years. The plan was not executed.
As a result, Trump created 6.6 million jobs between 2017 and 2019. This was before the 2020 recession, which cost the economy 20.5 million jobs in April alone. By September, 12.6 million people were still unemployed.
Other Presidents' Economic Policies
- Barack Obama (2009-2017)
- George W. Bush (2001-2009)
- Bill Clinton (1993-2001)
- Ronald Reagan (1981-1989)
- Jimmy Carter (1977-1981)
- Richard M. Nixon (1969-1974)
- Lyndon B. Johnson (1963-1969)
- John F. Kennedy (1961-1963)
- Harry Truman (1945-1953)
- Franklin D. Roosevelt (1933-1945)
- Herbert Hoover (1929-1933)
- Woodrow Wilson (1913-1921)