American industrial giant Honeywell CEO of the company Official Gao Dewei is very optimistic about the U.S. economic prospects under Trump. He believes that Trump’s economic growth plan will help boost the economy by taking measures such as lowering corporate taxes and simplifying regulations. Gao Dewei also said that during the U.S. presidential election, he had communicated with dozens of U.S. business executives, and the consensus reached was that everyone felt that business opportunities had arrived and it was time to increase investment.
In fact, optimism is not limited to Fortune 500 companies. Since Trump’s election, U.S. small and medium-sized businesses have also been filled with optimism. A survey of small and medium-sized enterprises conducted by the American Federation of Independent Business in December last year showed that since Trump won the presidential election in November last year, the outlook for Good FutureThe proportion of small and medium-sized enterprises with economic prospects has jumped from 12% to 50%.
Theperformanceofthestockmarketisthemostdirect.Therecenthuge”Trumprebound”inthestockmarketshowsthatinvestorsbelievethatthenewpresident’seconomicpolicieswillstimulatecorporateprofits.Sinceelectionday,theS&P500hasrisenmorethan8%,withstockmarketvalueincreasingby$1.4trillion,whilethemanufacturing-heavyDowJonesIndustrialAverageItevenbrokethroughthehistoric20,000pointsandcontinuestoclimb.JustafterTrumpannouncedinearlyFebruarythathewouldannounce”surprisingnews”relatedtotaxeslater,theDowJonesindexreachedanewhigh.
ThesharpreboundinthestockmarketshowsthatinvestorshavehighexpectationsforU.S.economicgrowthunderTrump,thatis,theannualgrowthrateisexpectedtoincreasefromadull2%to3%-4%.SomesenioreconomistsbelievethatthisexpectationisnotimpossibleifTrumpcanreduceregulationsandlowertaxeswithoutdamagingtheeconomyinotherways.
However,evensomestaunchsupportersofTrumpareworried.SomebelievethatcoreelementsofhisplatformmayleadtheU.S.economyinableakerdirection.ThebiggestofthemisRiskisbusiness.BecauseTrumpadvocatestradeprotectionism,thismayreversethedecades-oldtradeopennesspolicyoftheUnitedStates.ThisopenpolicyhasbenefitedtheUnitedStatesanditstradingpartners.Oncechanged,theremaybeariskoftriggeringaglobaltradewar..SomeconservativeeconomistsareevenmoreworriedthatsomeofTrump’s impulsive moves on trade policy will also become major risk factors. For example, he has threatened to increase tariffs on Mexico and China to reduce the U.S. trade deficit. Douglas Hall-Eakin, chairman of the American think tank Action Forum, said, “For Trump, the biggest obstacle to success is trade.” Hall-Eakin served as director of the Congressional Budget Office in the George W. Bush administration.
However, Trump’s trade protectionist tendencies are not the only risk factor. His strict anti-immigration stance is more likely to become a constraint on future U.S. economic growth, because this stance will not only drive away Millions of farm and construction industry workers will be unable to smoothly come to work in the United States due to restrictive visa policies, thus causing the United States to lose its dominant position in the global talent war. One of Trump’s close friends, Tom Barrack, said that he often reminded Trump about this, but the latter’s response was, “This is a revolution, and all the noise is normal.”
In short, the Trump economy is in danger. The United States has never had such a contradictory mixed economic policy, and there has never been a president who operates in such an unconventional and unpredictable way as Trump.
(Original title: Opportunities and crises of Trump’s economy)
(Editor: DF319)
