Less than six months into his second term, US President Donald Trump and his team have managed to inflict substantial damage on the US and global economy. From deploying often-violent Immigration and Customs Enforcement (ICE) agents against immigrants to imposing or threatening large tariffs and indiscriminately firing government staff, the administration has introduced volatility, undermining business and consumer confidence.
It is worth remembering that Trump inherited a strong economy with robust gross domestic product and job growth and declining inflation. In its year-end 2024 forecast, the US Federal Reserve anticipated continued growth at 2.1 per cent and inflation declining to 2.5 per cent this year. Three months later, these projections had dropped to 1.7 per cent growth and 2.7 per cent inflation.
While Trump’s daily policy pronouncements (often issued through social media) and legally dubious executive orders are hard to miss, a less visible but even more consequential development is the damage done to global trust and confidence in the US – as demonstrated by the dollar’s 10 per cent decline against the euro and the Swiss franc.
Despite US stock markets having recovered following pauses on the most punitive “Liberation Day” tariffs announced in April, the dollar remains weak, and Treasury yields elevated.
At a time when most voters see the economy as their top concern, Trump’s performatively cruel deportations and harassment of immigrants will bring additional economic costs. The administration’s draconian approach will curtail the growth of the labour force, increase costs and decrease business profitability in all affected industries.
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US House passes Trump’s bill, sending it to White House for president to sign
US House passes Trump’s bill, sending it to White House for president to sign