Top economist warns there may be 'storms coming' in 2025 based on these 2 Trump policies

12 December 2024

President-elect Donald Trump is inheriting what is objectively one of the strongest U.S. economies in decades. But one economist is warning that if he follows through on enacting two of his cornerstone campaign promises, that may change for the worse.

According to NBC News, Mark Zandi — the chief economist for Moody's Analytics – is warning that Americans should prepare for higher prices and higher unemployment rates if Trump imposes double-digit tariffs on imported goods and deports millions of undocumented immigrants in his second term. He observed that the current strong stock market numbers, stable GDP growth and healthy business formation rates may take a dive in the aftermath of new tariffs and millions of immigrants being removed from the United States.

"The economy can weather a lot of storms," Zandi said, while adding: "I do think there are some potential storms coming."

Trump has proposed 25% tariffs on goods imported from Canada and Mexico, and a 10% tariff on goods shipped from China. Last month, CBS News reported that these tariffs will almost certainly result in significant price hikes for various consumer goods, including $213 per device for smartphones (iPhones are manufactured in China). Laptops and video game consoles could also come at a significant markup.

"It’s going to mean higher costs for consumers — it’s a tax increase," Zandi said of the new proposed tariffs.

Additionally, Trump deporting millions of undocumented immigrants could also deal a significant blow to the economy. This week, Democrats on the Congressional Joint Economic Committee released a study exploring the economic impact of mass deportations. If the incoming Trump administration deported even just one million migrants per year between 2025 and 2028, the study estimated a drop in GDP of anywhere from 4.2% to 6.8%. For context, the Great Recession of the late aughts caused a 4.3% drop in GDP.

“I believe President Trump is going to do what he said he’ll do on the campaign trail,” Zandi said. “He’s going to be quite aggressive in pursuing the policies.”

Click here to read NBC's report in its entirety.

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