A nonpartisan economic analysis warned that deporting migrants and increasing tariffs would damage the U.S. economy.
Former President Donald J. Trump’s proposals to deport millions of migrants and impose new tariffs on imports from around the world would slash U.S. economic growth and employment and cause inflation to rebound sharply, according to a new analysis published on Thursday by the nonpartisan Peterson Institute for International Economics.
That analysis also assumed that Mr. Trump would try to encroach on the independence of the Federal Reserve. He has not floated such a proposal but has suggested that presidents should have input into the central bank’s policies and in the past tried to publicly push the Fed to lower interest rates.
The assessment of Mr. Trump’s policies was published days after the Republican presidential candidate pitched his plan to create a manufacturing “renaissance” in America by cutting corporate taxes and regulations and increasing tariffs by as much as 200 percent. Economists have been skeptical about the viability of many of Mr. Trump’s proposals, and some of them could be difficult to enact. But the new report argued that if taken together, the policies would inflict significant damage on the U.S. economy.
“While Trump promises to ‘make the foreigners pay,’ our analysis shows his policies will end up making Americans pay the most,” Warwick J. McKibbin, Megan Hogan and Marcus Noland wrote in their report.
The study from the Peterson Institute, which tends to favor free trade, examined the effects of three prominent parts of Mr. Trump’s agenda: deporting 8.3 million unauthorized migrants, levying 10 percent tariffs on all imports and 60 percent tariffs on imports from China, and eroding the Federal Reserve’s independence by allowing the president to influence interest rate policy.
The study suggested that Mr. Trump wanted to weaken the Fed’s independence, citing a Wall Street Journal article that said his allies were drawing up a plan to blunt the central bank’s ability to freely set interest rates. It also noted that Mr. Trump has said he believes presidents should have a “say” on interest rate policy.
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Source: Economy - nytimes.com
