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November 15, 2024, part 2
The possibility of Trump returning to power may lead to a resurgence of inflation in the United States, mainly due to:
1. Tariff policyTrump plans to impose tariffs of 10% to 20% on all imported goods, especially increasing tariffs on Chinese goods by 60%. This will raise the prices of imported goods, increase production costs, ultimately passed on to consumers, and push up the price level.
2. Immigration policyTrump plans to carry out large-scale expulsion of illegal immigrants. Illegal immigrants play an important role in the US labor market, especially in agriculture, construction, and the service industry. Expelling them may lead to labor shortages, increase wage costs, and consequently trigger price hikes.
3. Fiscal policyTrump advocates large-scale tax cuts and increased infrastructure spending, which may lead to an expansion of the fiscal deficit. Excessive fiscal stimulus may exacerbate demand, exceed supply capacity, and thereby trigger inflationary pressures.
Many economists and institutions have expressed concerns about this. For example, 16 Nobel laureates in economics jointly warned that Trump's economic plan could reignite inflation. In addition, research from the Peterson Institute for International Economics suggests that Trump's tariff policies could directly cause a 1.3% increase in the Consumer Price Index (CPI) for American consumers.
In summary, Trump's policies may push up the level of inflation in the United States through various means.
1. Tariff policyTrump plans to impose tariffs of 10% to 20% on all imported goods, especially increasing tariffs on Chinese goods by 60%. This will raise the prices of imported goods, increase production costs, ultimately passed on to consumers, and push up the price level.
2. Immigration policyTrump plans to carry out large-scale expulsion of illegal immigrants. Illegal immigrants play an important role in the US labor market, especially in agriculture, construction, and the service industry. Expelling them may lead to labor shortages, increase wage costs, and consequently trigger price hikes.
3. Fiscal policyTrump advocates large-scale tax cuts and increased infrastructure spending, which may lead to an expansion of the fiscal deficit. Excessive fiscal stimulus may exacerbate demand, exceed supply capacity, and thereby trigger inflationary pressures.
Many economists and institutions have expressed concerns about this. For example, 16 Nobel laureates in economics jointly warned that Trump's economic plan could reignite inflation. In addition, research from the Peterson Institute for International Economics suggests that Trump's tariff policies could directly cause a 1.3% increase in the Consumer Price Index (CPI) for American consumers.
In summary, Trump's policies may push up the level of inflation in the United States through various means.
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