Maganomics Trump's plan to reshape the us economy

Former US President and current presidential candidate Donald Trump promises to impose wide-ranging tariffs aimed at boosting domestic manufacturing and confronting China, in addition to cutting taxes on individuals and companies, if he wins the presidency.
But Trump's critics warn that these policies could harm the US economy and increase international tensions, as well as lead to higher prices and harm low-income families.
The writers Colby Smith, Claire Jones and James Politi stated in their report published by the Financial Times that Trump pledged at a campaign rally in Tucson, Arizona, earlier this month to end the "chaos and misery" that Americans have been suffering under the administration of current President Joe Biden, and promised to cut taxes, energy costs, interest rates and inflation.
Trump has continued to criticize the Biden administration and his deputy Kamala Harris over the cost of living crisis in the country since he launched his campaign for a second term.
The Republican Cure
The former president is offering the traditional Republican cure during his campaign: new tax cuts, but this time he has developed a more populist economic policy agenda designed to portray him as a defender of the interests of ordinary workers and domestic manufacturing.
The writers report that the main themes of what Trump calls “Maganomics” include imposing stricter tariffs on imports from around the world, especially from China, and a crackdown on immigration, as well as a campaign rhetoric that pushes for greater political influence over monetary policy and the dollar.
“Maganomics” is a modern term with political and economic connotations, a combination of “make America great again” (MAGA), former President Donald Trump’s campaign slogan, and “economics.”
While it is difficult to distinguish between what is a “plan,” what is a “threat,” and what is a “negotiating ploy” in Trump’s campaign rhetoric, economists of all stripes agree that Trump’s agenda represents a more traditional extension of the policies introduced during his first term between 2017 and 2021.
However, if he wins the election and actually implements these plans, they will radically reshape the US economy and its relationship with the rest of the world.
The authors point out that critics warn that these policies will cause great damage to the economy and will not help the US compete with China.
According to Jason Furman, a former economist in the administration of former President Barack Obama and now a professor at Harvard University, if Trump implements even half of what he promised, the results for the US economy will be chaotic, and he stressed that imposing tariffs on all countries would tear apart the bloc of countries on which the US relies in the face of China.

Democrats, stung by criticism of their record on inflation, were quick to claim that Trump’s proposed policies would further increase prices and hurt the economy.
Some Trump supporters are concerned about the international implications of America adopting such a strong protectionist approach.
Need for trade
“You need to trade, especially with your enemies,” said Arthur Laffer, an economist close to Trump. “I’m not saying we should sell nuclear weapons to Kim Jong Un, but you need to have trade so that people talk to each other, like each other, buy from them, and they buy from you.”
He stressed that sanctions and threats of tariffs are not the right way, but rather a path to World War III.
The authors reported that Maganomics is based on ideas that would fundamentally turn many aspects of the economic model adopted in industrial economies over the past century on its head; if implemented, it would represent a return to an era in which a large portion of government revenue came from trade tariffs, rather than taxes on people’s incomes and corporate profits.
Ernie Tedeschi, director of economics at the Yale Budget Lab and a former official on Biden’s Council of Economic Advisers, believes that “it is clear that he [Trump] is thinking about radically changing the kind of balance of revenue sources in the U.S. tax system, and therefore changing the way we think about trade in the United States and our relationship with our trading partners.” “That’s how we did things in the 19th century, not the 20th century, let alone the 21st.”
During his time in the White House, Trump has aggressively imposed tariffs on China, many of which have been maintained under Biden.
But ideas now being considered suggest that a second Trump term could see tariffs on imports at levels not seen since the 1930s, when the landmark Smoot-Hawley Tariff Act was passed.
After initially saying he wanted to impose a 10% tariff on all imported goods, Trump recently said it could go up to 20%, and on Chinese imports, he has talked about a 60% tariff, and this month said countries planning to reduce their reliance on the dollar would be hit with a 100% tariff as punishment.

Restoring Manufacturing

Trump’s hopes are not just for increased revenues, but also for restoring American manufacturing. Treasury Secretary Janet Yellen estimated this year that 2 million manufacturing jobs have been lost since the U.S. joined the U.S. China joined the World Trade Organization in 2001.
"When they come in and they steal our jobs, they steal our wealth, they steal our country.

The book stresses that this policy has huge costs. The Peterson Institute for International Economics in Washington estimates that imposing a 20% tariff on all goods, combined with a 60% tariff on China, would increase the average household’s spending on goods by $2,600 a year. It says the tariffs would disproportionately affect low-income households, which Trump claims his economic policies help protect.
The last time we had a trade war under Trump, the global manufacturing cycle went into recession,” says Julia Coronado, a former Federal Reserve economist.
“There’s a risk that trade barriers become a convenient tool,” says Mary Lovely, one of the authors of the Peterson Institute study. “Tariffs don’t show up in the government’s budget, but they are a subsidy to domestic producers and a tax on consumers, and many voters don’t see tariffs as a tax.”
Despite these potential costs, many voters support tariffs, especially in industrial-heavy swing states like Michigan.
“I don’t see why you shouldn’t have tariffs on everything that comes from China, everything that comes from Mexico,” says Nelson Westrick, a Ford worker who lives in Macomb County near Detroit.
The authors note that Trump’s advisers argue that tariffs will provide the money needed to support the cornerstone of Republican economic policymaking — tax cuts.
Specifically, Trump’s second administration plans to make permanent the tax cuts introduced during his first term, and Republicans argue that the 2018 tax cuts and the 2017 Income and Investment Act, which are set to expire in 2025, will help boost economic growth, helping to address the U.S. government’s growing debt burden.
“The most important thing to solve the debt is to grow the economy faster,” said Stephen Moore, an economist close to Trump. “There’s a lot on Trump’s agenda that would help do that.” In addition to cutting taxes, growing the economy, producing more energy, and improving trade deals. Trump has talked about eliminating hundreds of billions of dollars in green energy programs, which would save a lot of money. “I can’t point to a single government program that Democrats want to eliminate,” Moore added. Trump has talked about hundreds of programs and budgets that he will eliminate.”
However, many economists say the Trump campaign’s numbers do not match reality. “It has always been said that tax cuts will pay for themselves, but that has never happened,” said Maury Obstfeld, a fellow at the Peterson Institute for International Economics.
The authors said economists argue that these cuts could further strain already strained U.S. public finances.
“Tax cuts will increase the deficit, and in a full-employment economy like the one we have now … it will be inflationary,” the authors quoted Mark Zandi, chief economist at Moody’s Analytics, as saying. “We will not make any progress in addressing the country’s dire fiscal situation, which is a serious concern that is becoming more serious by the day,” the authors added.
The main criticism of Trump’s agenda, the authors added, is that it is nearly impossible to cover the cost of tax cuts with tariffs.
The authors noted that a research group from the Penn Wharton Budget Model estimated that Trump’s plans would increase the U.S. budget deficit by $5.8 trillion over the next decade. Meanwhile, the conservative Tax Foundation estimated that his new plan to exempt overtime from federal taxes would cost the United States an additional $227 billion in lost revenue over the next decade.
However, Obstfeld and Kimberly Klausing, senior fellows at the Peterson Institute for International Economics, estimate that the maximum additional revenue the administration could raise by imposing a 50 percent tariff on all goods would be $780 billion. Earlier this month, IBM Vice President and former White House economic adviser Gary Cohn told CBS that he saw little appetite in Congress for Passing Trump's tax plans

Abstract:

"Maganomics" refers to former US President Donald Trump's plan to reshape the US economy. This plan is based on policies that aim to promote economic growth by reducing taxes, deregulating, and encouraging domestic investment. "Maganomics" seeks to strengthen American manufacturing, increase jobs, and boost American exports. The plan also includes promoting energy independence and reducing reliance on imports, which aims to achieve sustainable and strong economic growth.

Conclusion:

"Maganomics", Trump's economic plan, aims to reshape the US economy through policies that stimulate growth and reduce regulatory burdens on businesses. With its focus on reducing taxes and promoting domestic manufacturing, the plan aims to achieve long-term economic sustainability and increase job opportunities. Although some aspects of the plan have been successful, its long-term impact depends on how it is implemented and how the global economy reacts to these policies.