As President-elect, Donald Trump is stepping into what many view as the most robust domestic economy we’ve seen in the last 50 years. We are witnessing significant job creation, rising wages, and an increase in GDP, with inflation stabilizing back to its usual levels. This might indicate a prolonged economic expansion.

It’s not difficult to predict the policies Trump is likely to favor. His initiative, Project 2025, which I have discussed previously, outlines the economic and fiscal policy directions we can expect. This comprehensive blueprint will influence many initiatives within the executive branch in the years to come. However, much of Project 2025 will need congressional approval, which seems doubtful until after the next election.

The plan suggests a substantial increase in political appointments to the civil service, rising from 4,000 to 20,000, which appears achievable without congressional backing. This could lead to efforts urging states to broaden universal school vouchers, lessen environmental regulations, and boost energy production on federal lands.

However, many of these changes might not materialize as they will likely fall under state jurisdiction or face prolonged legal challenges. Regardless of opinions on these proposals, they won’t all be implemented within a four-year term.

Of course, this all hinges on the new administration’s adherence to the Constitution, which is certainly open to question.

Trump can’t execute Project 2025 on his own

Project 2025 also outlines various changes that could negatively impact veterans from the Iraq and Afghanistan conflicts, limit access to abortion medications, dismantle the Department of Education, and tie federal funding for schools to adherence to specific curricula.

The majority of Project 2025 appears focused on expanding the scope and reach of the federal government, predominantly advancing social conservative initiatives through strong government oversight. We should anticipate a significant increase in such policies from this administration.

While the U.S. economy may not feel immediate impacts from these gradual changes and the contentious politics they involve, Project 2025 does not adequately address pressing financial issues such as national debt, taxation, and entitlement expenditures. Trump also lacks a strategy for managing public debt, and as with his previous term, we should prepare for an increase in public debt during his second term.

Recently, there have also been alarming comments made during the campaign that pose a more immediate threat to the economy. Trump has criticized the independence of the Federal Reserve. Although significant changes would require a favorable Congress, appointing a new Board of Governors and chairman could greatly diminish its autonomy.

Trump’s deportation plans may harm the economy

Trump has pledged to deport illegal immigrants en masse. However, the number of undocumented immigrants in America has decreased from a peak of 12.2 million in 2007 to about 11 million today. Despite misleading narratives, the issue of illegal immigration is gradually improving.

The financial implications of such deportation are enormous. The costs associated with transporting the estimated 11 million undocumented individuals through voluntary means could exceed $50 billion and would take more than a year to accomplish, as the U.S. lacks the logistical capacity to move that many people quickly. Additionally, deploying tens of thousands of National Guard members to assist in deportations could incur expenses well over half a trillion dollars.

This mass deportation could also eliminate millions of employees from an already tight labor market, exacerbating the budget deficit as undocumented workers contribute significantly more in tax revenue than they consume in public services. Consequently, this could hinder economic growth.

In this regard, we can expect a repetition of Trump’s historical pattern—grand promises with minimal follow-through.

Trump has also suggested he might significantly increase tariffs. Historically, Congress has given the president considerable authority concerning tariffs for national security reasons. Both Democratic and Republican presidents have misused this power, allowing Trump the potential to impose tariffs at his discretion.

Manufacturing jobs have faced significant challenges, particularly due to the implementation of tariffs. Numerous studies demonstrate that tariffs tend to diminish domestic factory jobs. In fact, the tariffs introduced by Trump in 2018 nearly drove the Midwest—an area heavily reliant on manufacturing—into a recession by 2019.

As of now, manufacturing employment in the Midwest remains lower than it was in January 2017, when Trump assumed the presidency.

The proposal of imposing a 10-20% tariff on all imported goods, as suggested by Trump, could lead the U.S. into a recession. This would escalate prices on manufactured products, and retaliatory tariffs from other countries would likely decrease demand for U.S. goods and services internationally. This is a tough lesson, but it seems we are slow to learn.

The Strength of America’s Economy Lies in Our Reputation

It’s important to note that some economic policies proposed by Vice President Kamala Harris were also detrimental to sustainable growth. Although her tariffs were less severe, they still lacked foresight.

The Democrats seemingly do not have a solid strategy for reducing debt and their perspectives on local economic development initiatives seem overly optimistic.

However, one significant distinction exists between the presidential candidates for 2024.

The U.S. economy has been a dominant force globally for most of the last century and maintains its position today. Throughout this era, we have experienced numerous harmful economic policies yet have managed to prosper.

Our economic resilience is supported by two key factors: First, we attract and cultivate skilled, educated individuals with entrepreneurial spirit. Secondly, we uphold the rule of law in our governance, trade relationships, and international interactions.

Trump’s policies pose a significant risk to our ability to attract talent, as they may make the U.S. seem uninviting and uncertain for foreign nationals. His actions, both during and after his presidency, undermine the rule of law. If this trend continues, we may find ourselves facing an economy that is not only weak but is also overshadowed by more severe issues.