What will Trump's economic policy look like?

Speculation is rife about Donald Trump's future strategies, including his economic policy. In the election campaign he promised lower taxes, deregulation, less free trade and more domestic investment. Commentators see the advent of a new era of protectionism in the US and ask whether the end of low interest rates could thwart his plans for major public investment.

Open/close all quotes
De Standaard (BE) /

Trump's dangerous debt game

Donald Trump's announced economic policy is being likened to that of Ronald Reagan. But back then a period of lower interest rates was just beginning, whereas today such a period is just coming to an end, De Standaard warns:

“For months, if not years, investors and central bankers have been sizing each other up and seeking an answer to the question: When will the economy and stock markets be able to keep themselves afloat once more? ... That time seems to have come, just as Trump takes over. But a fundamental change can never take place without any hitches at all. Trump wants to get the cement mixers running and lower taxes. His career as a businessman is based on aggressive debt financing. ... But the mountain of debt that the public authorities and businesses have been accruing for years in exchange for low interest rates will quickly become a huge burden if new growth pushes interest rates up. Trump is doing what no one has dared to do: waking the sleeping giant. Inevitably interest rates will go up. But only the future can tell if that will lead to new growth.”

The Malta Independent (MT) /

Don't give in to temptations of protectionism

Trump's plans to deport immigrants and introduce protectionist measures are bad news for the US and the rest of the world, The Malta Independent fears:

“After 20 January, when he becomes the 45th President of the United States, Trump will be called upon to implement his election promises. ... He has promised a hefty tax cut, infrastructural works and to redesign such trade deals (especially the one with China) that in his opinion militate against American interest. ... A US that succumbs to protectionism may be bad news to the rest of the world. And a US that kicks out millions of illegal immigrants may actually become poorer.”

Polityka (PL) /

Poor economies could collapse

US protectionist policy could prove particularly impoverishing for poor countries in the Southern Hemisphere, Agaza Czarnacka writes on her blog with Polityka:

“The US has always looked out for its own economic interests in conducting its international relations. Many economies all over the world depend on exports to the United States. That includes in particular economies in the Southern Hemisphere. One example of goods they supply to the US is agricultural products. If the US put an end to such business or changed the trading terms, these economies might even collapse altogether. And they would have a hard time recovering from such a blow.”

Jornal de Negócios (PT) /

Businesses can look forward to profits

Jornal de Negócios explains why stock markets didn't plummet after Trump's election:

“The reaction of the markets to Trump's unexpected victory was one of this week's big surprises: instead of the anticipated debacle, share prices actually rose in the US and in Europe. The US Dow Jones index even hit a record high. Trump's moderate and conciliatory tone in his victory speech was one of the factors behind the investors' mood. … But it was also the result of some of the announcements Trump had made about his economic programme: he promised to lower taxes and launch a comprehensive programme of investment in the country's infrastructure. Which means that businesses in the banking and industrial sectors can expect generous profits.”

Dagens Nyheter (SE) /

The rich will get richer

Trump's election can only really achieve one economic goal, Dagens Nyheter believes:

“Taxes will be slashed, Trump and the Republicans all agree on that. Clearly that will mostly benefit wealthy people like Trump. ... Like the Democrats, Trump wants to develop the infrastructure. That means spending money, something the Republicans don't like to do. Trump may turn out to be a fantastic mediator who can govern with shifting majorities in Congress, but so far he hasn't displayed the political smoothness that requires. In any event, one thing is for sure. This time the Republicans won't be able to blame the Democrats for not fulfilling people's dreams. Because now they're in power.”

El País (ES) /

Protectionism is unrealistic

The protectionist economic policy promised by Trump won't be so easy to implement, El País comments gleefully:

“There are reasons to remain cautiously optimistic. The protectionism he promised as candidate, his invective against globalisation and his threats about tariffs and trade barriers are ideas that will be difficult to put into practice. The US can't simply pull out of the economic and environmental agreements it has already signed. Nor is there a consensus within the Republican Party on the protectionist neurosis which afflicts the president-elect. However, it's clear that a key instrument of trade for Europe, the TTIP, will at the very least suffer major delays and could even be shelved for good.”

La Stampa (IT) /

Trump's promises will be his undoing

Trump won't be able to satisfy the demands of impoverished middle-class voters with his economic platform, La Stampa comments:

“Rejecting international trade agreements will hardly help boost productivity, and will therefore only raise the salaries of the middle class minimally. On the contrary, less foreign trade could have a negative impact on competitiveness and the quest for technological innovation, further impoverishing the country as a result. ... With his plan to cut business tax, however, Trump could be successful with the middle class. But lower tax revenues must be balanced out with less spending. That will hinder the public investment in infrastructure on which the stimulation of growth and productivity largely depends.”