Donald Trump's Economic Plan

How Is President Trump Changing the Economy?

Donald Trump
Republican president-elect Donald Trump gives a thumbs up to the crowd during his acceptance speech at his election night event at the New York Hilton Midtown in the early morning hours of November 9, 2016 in New York City. Photo by Chip Somodevilla/Getty Images

Republican Donald Trump is the 45th president of the United States. His first term is from 2017 to 2021. Trump's economic plan focuses on "making America great again." He successfully negotiated "the biggest deal of my life" with those voters who felt they had lost the American Dream

First 100 Days

This outlines the most significant actions taken by the Trump Administration that affect the economy.

April 26, 2017. Trump released his tax plan. It's very similar to his "Five-Part Tax Plan" outlined during the 2016 presidential campaign. The Tax Policy Center analyzed the 2016 plan. It said it would boost the economy because it put more money into people's pockets. But it would dampen growth in the long run. For details, see Trump's Tax Plan.

Trump signaled that he may sign an executive order to withdraw from NAFTA. He changed his mind the following day. This followed a January 23 order to renegotiate the trade agreement. He assigned the negotiations to his team of incoming appointees. They include Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. It also includes the head of the new White House Trade Council, Peter Navarro. Here's What Happens If Trump Dumps NAFTA. (Source: "Trump Orders Imminent to Renegotiate NAFTA, Back Out of TPP," CNN Politico, January 23, 2017.)

April 24. The Commerce Department accused Canada of dumping lumber on the U.S. market. It threatened to impose a 20 percent tariff on Canada's $10 billion in lumber exports.

April 20. Republicans in Congress amended the American Health Care Act. The Trump Administration had supported that bill to replace Obamacare on March 6, 2017.

"Freedom Caucus" Republicans killed that bill because it did not cut costs enough. The amendment allowed states to waive ACA requirements to offer 10 essential benefits if it would cut costs. As of April 29, 2017, the amended bill still did not have enough votes to pass the House. For more, see Donald Trump on Health Care.

March 16. The Office of Management and Budget released memos outlining budget requests for FY 2017 and FY 2018. 

March 6. President Trump signed an executive order banning visas for citizens from six countries. They are Syria, Iran, Libya, Somalia, Sudan and Yemen. The ban doesn't apply to lawful permanent residents and existing visa holders. The order went into effect at 12:01 a.m. on March 16. It will be in effect for 90 days. Refugees not already scheduled for travel are banned for 120 days. It caps the total number of refugees at 50,000 instead of 110,000. (Source: "Trump Signs New Order Blocking Arrivals from Six Majority-Muslim Countries," NPR, March 6, 2017.)

The order replaced one Trump signed January 27. It banned all travelers from the six countries above, plus Iraq. It also banned all refugees for four months and Syrian refugees indefinitely. The American Civil Liberties Union and others filed lawsuits on behalf of clients affected by the ban.

On February 3, federal judge James Robart blocked the ban. The Department of Homeland Security suspended the ban's enforcement on February 5. (Sources: "Trump Administration Appealing Seattle Judge's Halt of the Refugee Travel Ban," The Seattle Times, February 4, 2017.  "Trump's Latest Executive Order: Banning People From Seven Countries," CNN, January 28, 2017.)

January 30. Trump signed an order reducing regulations. The order required any federal agency that proposed a new regulation must identify two existing ones to eliminate. On Inauguration Day, White House Chief of Staff Reince Priebus prepared a memo to all agencies halting any new regulations. (Source: "Trump Signs Executive Order To 'Ease The Burdens Of Obamacare,'", January 20, 2017.)

January 25. Trump signed an order to build a wall along the 2,000 mile U.S.

border with Mexican. He estimated the cost at $10 billion to $20 billion. That's the same as the budget for either the Justice Department or NASA. Trump's order redirected current funds to cover the cost. (Source: "Trump Asking Congress, Not Mexico, to Pay for Border Wall," CNN Politics, January 6, 2017.)

Trump's Homeland Security Secretary John Kelly said the wall wouldn't work unless border agents patrolled it. He said the best way to stop drug smugglers was drying it up at the source. Kelly worked with Peru and others when he led the U.S. Southern Command. (Source: "Homeland Security Secretary Has Said Border Wall Alone Will Not Work," The New York Times, January 25, 2017. 

Trump promised to force Mexico to pay for the wall. If it refused, he threatened to change a rule under the USA Patriot Act, an antiterrorism law. The change would confiscate Western Union money transfers to Mexico from immigrants here illegally. The Mexican central bank reported that $25 billion was sent from abroad. There are no exact figures on how much of that is from U.S. immigrants. (Source: "Standing Up for Our Law Enforcement Community,", January 21, 2017. " Trump Reveals How He Would Force Mexico to Pay for Border Wall," The Washington Post, April 5, 2016.)

Trump's other orders require stronger vetting for immigrants from the Middle East and Africa. He would also withhold federal funds from "sanctuary cities." That's if they don't turn over criminals in America illegally. He would also add 5,000 border agents. (Source: "Trump Readies Plan to Build Border Wall," The Wall Street Journal, January 25, 2017. "Trump Moves to Act on Border Wall, Crack Down on Immigration," Bloomberg, January 25, 2017.)

January 24. Trump signed an order allowing construction of the Keystone XL and Dakota Access pipelines. They'd ship high-grade Canadian crude oil to refineries in the Gulf region. Oil companies plan to ship that oil to Latin America. This reduction of domestic supply will raise U.S. oil and gas prices. (Source: "Why the Keystone Pipeline Will Raise U.S. Oil Prices," Zero Hedge, January 24, 2017.)

January 23. Trump signed an order to withdraw from further negotiations on the Trans-Pacific Partnership. He would replace it with a series of bilateral agreements. He promised to negotiate harder to protect American jobs. (Source: "Trump to Withdraw from TPP," CNN Politics, January 23, 2017.)

Trump ordered a five-year ban on administration officials becoming lobbyists. (Obama proposed, but never fulfilled, this ban during his 2008 campaign.) Trump promised a lifetime ban for any executive lobbying on behalf of another country. 

January 20. Trump signed an executive order to "ease the burden" of Obamacare. It directs federal agencies to do what they can within the existing law to lift the Affordable Care Act's mandates. For more, see Trump's Health Care Agenda.

He signed an order to remove a discount on Federal Housing Administration mortgages for low-income homebuyers. The FHA said it planned lower mortgage costs to offset higher interest rates. (Source: "FHA Mortgage Premium Cuts Helping Low-income Homebuyers Canceled by President Trump," CBS News, January 20, 2017.)

On November 22, 2016, Trump promised to make three additional Executive Orders. First, cancel restrictions on shale oil, clean coal and other energy production. Second, ask the Defense Department to develop a plan to protect the nation's infrastructure from cyber-attacks. Third, ask the Labor Department to identify any abuse of the nation's visa program.

Here is the rest of Trump's economic plan as outlined during his 2016 campaign, and how it impacts you. 

Budget to "Cut Government Spending" Submitted in March

Reduce the deficit by cutting waste. Trump would have to cut $500 billion in waste to eliminate the current budget deficit. That's a 12 percent reduction in the $4.147 trillion budget he inherited from President Obama. As any business owner knows, a 12 percent cut could be doable but painful. For more, see 5 Myths About Cutting Government Spending.

Eliminate the Department of Education and the Environmental Protection Administration. That might save $69.4 billion, although Trump may reprogram the funds for state block grants. Defunding the EPA would only save $8.3 billion. It begs the question of who would enforce the existing laws.

Keep existing Medicare and Social Security benefits intact. These benefits were created by prior Acts of Congress and cannot be changed by a president. Social Security is self-funded until 2035. Medicare is only 53 percent self-funded. These two programs cost $1.565 trillion, or 38 percent of total spending. For more, see Mandatory Budget

Make the U.S. military "so strong" that "no one will mess with us." Get more equipment. Bomb ISIS and send troops to Syria. Cancel Iran nuclear deal. Use Russia as an ally in Syria. Engage in military force against terrorists' families. Approve waterboarding.  In a November 22 interview with the New York Times, Trump said he no longer supports waterboarding. He based his change of heart on a conversation with retired Marine Corps General James Mattis.  He also said he might appoint his son-in-law, Jared Kushner, as a special envoy to broker peace between the Israelis and Palestinians. (Source: "Donald Trump on War & Peace,"  "Donald Trump on Homeland Security," "Donald Trump and the Defense Budget," National, December 30, 2015.)

Increase Department of Defense budget by 10 percent. Trump also said "3 percent of GNP for military spending is too low, it should be 6.5 percent." Add U.S. Navy ships and the Air Force. Develop a state-of-the-art missile system to defend from Iran and North Korea. End the Defense sequester. U.S. military spending is already $775 billion a year. It's larger than any other government expenditure except Social Security at $967 billion. It's bigger than the deficit of $503 billion. It's greater than those of the next 10 largest government expenditures combined. It's four times more than China's military budget of $216 billion. It's almost 10 times bigger than Russia's budget of just $84.5 billion. According to the Center for International Policy, Trump's defense budget could be $90 billion more than Obama's most recent budget request. (Source: "Making Our Military Strong Again," "America First Foreign Policy,", January 21, 2017.)

Reform the Veteran's Administration. Give veterans vouchers to use either with the VA or their doctor. That competition would give the VA an incentive to improve service. The VA would provide transitional benefits, such as business loans, job training and placement services, to help veterans find employment. Increase funding for battle-related mental and chronic illness. Add OBGYN and other women's health services to every VA hospital. Fire corrupt VA executives. Change the culture of the VA to reduce inefficiencies. These programs would work and are necessary. The VA budget ($75.1 billion) is only 10 percent of total military spending. Many vets with posttraumatic stress disorder don't receive the care they need. As a result, 10 percent of the homeless population are veterans who suffer from PTSD or other war-related injuries. (Source: "Veteran's Administration Reforms,"

Update medical technology. That's already happened. It's one of the three largely unknown benefits of Obamacare.

"Repeal and Replace Obamacare"

Trump made some promises on the campaign trail that are not included in the AHCA. He promised to allow health insurance companies to operate across states lines. Expand Medicaid to all states by making it a block grant program. Allow consumers to purchase drugs overseas. At one point Trump suggested a universal “market-based” plan similar to the Federal Employees Health Benefits Program. He has not mentioned it since being elected. The universal plan is what Obama proposed and Congress rejected. (Source: "Healthcare Reform," "Donald Trump Health Care," "Donald Trump Hates Obamacare," July 31, 2015.) 

"Smart Trade, Not Stupid Trade"

Do a better job of negotiating trade agreements. Hit Mexican imports with a 35 percent tariff. The United States imports $294.7 billion in manufactured products, fruits, vegetables, coffee and cotton from Mexico. This is almost as much as we import from China. Trump's tariffs would increase prices of the goods we import from Mexico. Tariffs would benefit U.S. oil companies by raising prices on imported Mexican oil. By law, President Trump could only raise tariffs by 15 percent for 150 days without Congressional approval. For more, see U.S. Imports by Year by Country. (Source: "Trump's Trade Policy Is a Big Loser," USNews, April 19, 2016. "So What Exactly Is Donald Trump's Economic Policy?" CNN Money.)

Trump advocates for a protectionism that does not work in today's globally integrated economy. Other countries would retaliate, reducing American exports. Prices would raise for American consumers. One reason for slow U.S. growth since the recession is that international trade hasn't rebounded. Tariffs and a trade war would only worsen that.

After meeting with Chinese President Xi Jinping on April 7, Trump reversed these following positions.  

Label China a currency manipulator. Trump claims that China artificially undervalues its currency, the yuan, by 15 percent to 40 percent. Part of China's cost advantage is its cheaper standard of living that allows lower wages. Trump ignores that. He is incorrect to rail against the yuan's fixed exchange rate that's pegged to the dollar. In 2000, the yuan was undervalued by 30 percent. But a lot has changed since then.

First, former Treasury Secretary Hank Paulson convinced the People's Bank of China to increase the yuan's value against the dollar. It increased 2-3 percent between 2000 and 2013.

Second, the dollar has strengthened by 25 percent since 2014, taking the Chinese yuan with it. Now China's products cost that much more than its Southeast Asian competitors’. In August 2015, the PBOC tried letting the yuan/dollar exchange rate float in the free market. Right away, the yuan plummeted. If the yuan were undervalued, as Trump claims, it would have risen instead. Now, China's central bank is forced to take extreme steps to keep it propped up. That's why many economists now think China's currency is overvalued, not undervalued as Trump claims. For more, see Dollar to Yuan Conversion and History.

Impose countervailing duties on all imports from China. The United States imports $481.9 billion in consumer electronics, clothing and machinery from China. A lot of those "imports" are from U.S. corporations that send raw materials to China, and ship them back when they are completed. Trump's tariffs would reduce profits for these American firms and raise prices for American consumers. China might retaliate, raising its tariffs on imports from U.S. companies. For more, see U.S. Trade With China.  (Source: "U.S.-China Trade Reform,"

"Be the Greatest Job-Producing President in U.S. History"

Trump would have to create more than 22.3 million jobs to take that title. That's how many jobs President Obama created from the depths of the recession in January 2010 to the end of his term. President Clinton increased jobs the most percentage-wise, at 19.6 percent. Trump would have to create at least 29.3 million jobs to beat Clinton’s record. For more, see Job Creation by President.

Create jobs by eliminating outsourcing and bringing jobs back from Japan, China and Mexico. Trump is correct about the problem. The U.S. lost 34 percent of its manufacturing jobs between 1998 and 2010. Many were outsourced by U.S. companies to save money. Others were eliminated by new technology, including robotics, artificial intelligence and bio-engineering. Government-sponsored training for these specialties might create more jobs for U.S. workers than would Trump's trade war. For more, see 3 Ways to Fix IT Outsourcing.

Keep the U.S. minimum wage where it is so U.S. companies can compete. The dollar rose 25 percent since 2014. This rise makes U.S. workers 25 percent more expensive than those in India, Mexico and other countries whose currencies have fallen. Since China's currency is fixed to the dollar, its labor costs have also gone up 25 percent. Although this situation is temporary, it is still a bigger drag on U.S. competitiveness than raising the minimum wage would be. The U.S. minimum wage is $7.25 an hour, although many states with higher cost-of-living have mandated a higher wage. Ireland, the UK, Australia and six European Union countries have a higher minimum wage than the United States. For more, see Minimum Wage Pros and Cons.

Spend $1 trillion to rebuild U.S. infrastructure. That's $100 billion a year for ten years to repair America's aging roads, bridges and airports. That's more than Obama's Economic Stimulus Plan, which spent $261 billion in four years on shovel-ready projects. Construction is the most efficient use of federal dollars to create jobs. A U Mass/Amherst study found that 1 billion dollars spent on public works created 19,795 jobs. That's better than defense spending, which created 8,555 for the same cost. For more, see Four Best Real-World Ways to Create Jobs. (Source: "Trump's $500 Billion Infrastructure Promise Creates Metals Rally," Bloomberg, November 9, 2016.)  

"The U.S. jobs report is not a real number. The actual unemployment rate is 18 percent, not 5 percent."  The rate isn’t close to 18 percent, whether you look at the standard measurement or the “real” unemployment rate. The real unemployment rate includes those who are marginally attached or discouraged and part-time workers who would prefer full-time jobs. As of February 2016, that rate was 9.9 percent. The widely-reported, standard rate was 4.9 percent. The worst real unemployment rate was 16.7 percent in January 2010, when the widely-reported rate was 9.8 percent. The real unemployment rate tends to be double the widely-reported current unemployment rate

Ask federal departments for a list of wasteful regulations to be eliminated. Cancel all prior executive orders.The National Association of Manufacturers said that industry regulations cost $180 billion a year. Its studies show that U.S. manufacturing costs are 20 percent higher than other countries'. (NAM wants to expand, not end, free trade agreements.) Trump named Steve Mnuchin to be his U.S. Treasury Secretary. He promised to loosen Dodd-Frank regulations that prevent banks from lending to small businesses.  He said the Volcker Rule is too complicated. (Source: "Parts of Dodd-Frank Will Be Rolled Back Under Trump," CNBC, November 30, 2016.)

Find out Can Trump Bring Back American Jobs?

"Reduce the Debt by Growing the Economy 6 Percent"

Grow the economy by 6 percent annually to increase tax revenues. That would be too fast for healthy economic growth. It would create inflation, a boom-bust cycle, and then a crash. For more, see What Is the Ideal Growth Rate?

Reduce the debt by eliminating waste and redundancy in federal spending. Trump demonstrated this in his campaign by using Twitter instead of expensive PR campaign. His emphasis on finding ways to contain the costs is one of his strategies outlined in his book The Art of the Deal. (Source: "Donald Trump's Campaign Blueprint: His Own Book," The Wall Street Journal, Monica Langley, March 2, 2016.)

"Borrow knowing that if the economy crashed, you could make a deal. U.S. will never default because you can print the money." These are the most dangerous statements Trump has uttered. The first one is a blatant falsehood. If the economy collapsed, there would be no one to make a deal with. It would send the dollar into a collapse. That would send the entire world into another Great Depression. Printing money would send the dollar back into decline. Interest rates would rise as creditors lost faith in U.S. Treasuries. That would create a recession. (Source: "U.S. Will Never Default Because You Print the Money," CNN, May 10, 2016. "Donald Trump's Economic Plans Would Destroy the Economy," The Atlantic, May 8, 2016.)

See how Trump's Debt Reduction Plan Instead Adds $5.3 Trillion

"Send Illegal Immigrants Back"

Open a door for legal immigrants.  Deport the 2 - 3 million immigrants in the United States illegally who have criminal records. Ensure that open jobs are offered to American workers first. End "sanctuary cities."

The Department of Homeland Security reported in 2013 that there were 1.9 million "removable criminal aliens" in the country. That included both legal and illegal immigrants. That's fewer than the 2.4 million deportations during the Obama administration. In 2015, 91 percent of deported immigrants had criminal records. Trump promises to do this "immediately." As Mexico's economy improves, it's begun gaining immigrants itself. Since 2000, more Americans have immigrated to Mexico than the reverse. (Source: "Trump Plans to Immediately Deport Two Million to Three Million Undocumented Immigrants," The Washington Post, November 14, 2016.)

CEOs in Silicon Valley worry that Trump might restrict the H-1B visa program. It allows 315,000 foreign workers to fill many Silicon Valley jobs. In 2014, 65 percent of all these visas were for computer-related jobs. If the H-1B visa program is threatened, these companies could lose market share and valuable employees. (Source: "Donald Trump's Anti-immigration Stance Threatens the Heart of American Innovation," The Verge, November 11, 2016. "If Donald Trump Was President, Here's What Would Happen to the U.S. Economy," The Street, March 3, 2016.)

America First Energy Plan

Eliminate the Climate Action Plan and the Waters of U.S. rule. Allow more drilling on federal lands of shale oil and natural gas. Revive the coal industry while remaining committed to clean coal technology. He claims this would raise wages by $30 billion over seven years. (Source: "America First Energy Plan,"

Trump's plan could aggravate global warming and climate change. This is also not the right time to add to the U.S. oil supply. Many shale oil companies have gone out of business since 2014, when prices fell to a 13-year low. Prices have since rebounded but would fall again if Trump expands supply. But his plan would return gas prices to the lows they hit in 2016. For more, see U.S. Shale Oil Boom and Bust.

How does Trump's economic plan compare to Hillary Clinton's economic plan?

Other Presidents' Economic Policies