Has Trump promised too much to the US economy?

Donald Trump has promised big changes for the world’s largest economy.

On the agenda are “an end to the devastating inflationary crisis”, tariffs and big tax cuts, regulation and the size of government.

That combination, he said, would ignite an economic boom and revive a fading faith in the American dream.

“We are at the beginning of a great, beautiful golden age of business,” he promised from the podium at Mar-a-Lago earlier this month.

But the president-elect is looming over warnings that many of his policies will hurt the economy rather than help it.

And as he prepares to implement his plans, analysts say he is about to face political and economic realities that will make it difficult to deliver on all his promises.

“At this point, there is no clear path to achieving all of these goals because they are inherently contradictory,” said Romina Boccia, director of budget and endowment policy at the Cato Institute.

Here’s a closer look at its key promises.

What Trump promised:

“Prices will go down,” he repeated.

It was a risky bet – prices rarely fall, unless there is an economic crisis.

Inflation, which measures not the level of prices, but the speed of their growth, has already decreased significantly, but it has proved difficult to completely stop it.

What makes it difficult:

Trump linked his claim to promises to increase already record US oil and gas production by lowering energy costs. But the forces affecting inflation and energy prices are largely outside the president’s control.

To the extent that White House policy matters, analysts warn that many of Trump’s ideas — including tax cuts, tariffs and migrant deportations — risk exacerbating the problem.

Economist John Cochrane of the right-wing Hoover Institution said the big question facing the economy is how Trump will juggle “tensions” between the more traditional pro-business parts of his coalition and “nationalists” focused on issues like border control . and rivalry with China.

“Obviously, both camps can’t get what they want,” he said. “It’s going to be a seminal story, and so we don’t know what’s going to happen.”

What Trump voters want:

Promises about inflation were key to Trump’s victory, but by many measures, such as growth and job creation, the overall economy was not in the dire shape he painted on the campaign trail.

After his victory, he tried to lower expectations, warning that it would be “very difficult” to lower prices.

Amanda Sue Mattis, 34, of Michigan, says she thinks Trump’s promises are doable, but it may take time.

“If anyone can make better deals to make things more affordable for Americans, it’s Donald Trump,” she said. “He literally wrote the book on the art of making deals.”

What Trump promised:

Trump’s most unusual economic promise was his promise to impose tariffs – a border tax – of at least 10% on all goods entering the US, rising to more than 60% on products from China.

Since then, it has stepped up its threats against certain countries, including allies such as Canada, Mexico and Denmark.

Some of Trump’s advisers have suggested that the tariffs are a negotiating tool on other issues, such as border security, and that he will ultimately settle for a more targeted or gradual approach.

What makes it difficult:

The debate has fueled speculation about how aggressive Trump will be given the potential economic risks.

Analysts say the tariffs are likely to lead to higher prices for Americans and pain for companies hit by foreign retaliation.

And unlike in Trump’s first term, any action would come at a delicate moment as the long-term economic expansion in the US appears to be on its last legs.

Even if the toughest tariffs never go into effect, the political debate alone is creating uncertainty that could reduce investment and reduce US growth by 0.6% through mid-2025, according to Oxford Economics.

“They have very limited room for error,” Michael Tsembalest, head of market and investment strategy at JP Morgan Asset Management, said in a recent podcast. He warned that the desire for a major overhaul was likely to “break something,” though what remains to be seen.

Trade lawyer Everett Eisenstat, who served as a White House economic adviser during Trump’s first term, said he expected a comprehensive tariff but acknowledged the plan would compete with other goals.

“There is always tension. There is never perfection in the world of politics. And obviously one of the reasons I think he got re-elected is the concern about inflation,” he said.

“We’re in a different world (from the first term) and we’ll have to see how it goes,” he said.

What Trump voters want:

Lifelong Republican Ben Maurer said he would like Trump to focus on the broader goal of reviving U.S. manufacturing, rather than tariffs per se.

“I feel like it’s more of a negotiating tactic than an actual political path,” said the 38-year-old, who lives in Pennsylvania.

“I’m not saying he won’t impose tariffs on anything – I think he will – but I think it will be more strategic what exactly he does impose tariffs on. I support it, and I feel that his judgment is good enough to decide what to do with the tariff.’

What Trump promised:

He outlined a plan for growth — lower taxes, less regulation and smaller government — that he said would free up American businesses.

What makes it difficult:

But analysts say reducing regulation may take longer than expected. Trump is expected to favor extending expiring taxes over spending cuts.

Ms Boccia of the Cato Institute said she expected a surge in borrowing under the Trump administration and increased inflationary pressures.

In financial markets, these problems have already helped raise interest rates on government debt in recent weeks, she said.

​​​​​​While Trump will also face some opposition from those within his own party who worry about the already high US debt, Ms Boccia said that extending the tax cuts – projected to add more than 4 .5 trillion to the U.S. debt over the next decade — seems almost certain.

In contrast, Trump banned much of the budget spending during his campaign when he promised to leave big programs like Social Security unchanged.

The so-called Department of Government Effectiveness (DOGE), led by Elon Musk and Vivek Ramaswamy, has also publicly scaled back its ambitions.

“The signals that the market is sending now are being picked up by economists, but not by Washington,” she said. “At the end of the day, politics follows the path of least resistance.”

What Trump voters want:

Mr. Maurer said cutting red tape was key to his hopes for the administration.

“Government spending is absolute madness,” he said.

Additional reporting by Ana Fagi