Republican presidential candidate, Donald Trump, dey propose new economic plans wey include tariffs and tax cuts, but economists dey warn say dis plans fit cause more harm than good.
Trump say he want use tariffs to bring back US manufacturing and reduce costs, and he believe say tariffs go boost US revenue and put pressure on other countries. However, experts dey predict say dis policy fit increase inflation and raise consumer prices. According to dem, US businesses, not foreign governments, go pay import taxes on overseas purchases when there be tariffs, and dem can pass on these higher costs to consumers.
The Peterson Institute for International Economics (PIIE) estimate say if Trump impose a 10 percent universal tariff and other governments retaliate, US inflation could rise by 1.3 percentage points above baseline next year. Sharp hikes on Chinese goods also fit fuel inflation, according to dem. Bernard Yaros of Oxford Economics say a Trump presidency could raise inflation by 0.6 percentage points at its peak.
Trump also plan to extend expiring tax cuts and lower corporate income tax further, but economists warn say proposed tariffs could counteract the benefits from his tax policy. The Tax Foundation think tank say tariffs could fall short of offsetting the tax revenue losses.
Additionally, Trump’s tariff plans fit slash bilateral US-China trade by 70 percent, redirecting or eliminating hundreds of billions of dollars’ worth of exchanges. US trade volumes could be cut by 10 percent, becoming more centered on North American and other free trade agreement partners.
Trump’s energy and food policies also dey under scrutiny. He promise to eliminate inflation by slashing energy bills in half within a year through more deregulation in the domestic oil and gas sector. However, analysts express skepticism about whether dis would significantly increase production, given that it depends on major energy producers who have shareholders to answer to.
