Trump’s proposals 'pose enormous risks to our economy': ex-Treasury secretary

08 July 2024

President Joe Biden has been campaigning on his economic record, emphasizing that the United States has enjoyed record low unemployment under his watch. And presumptive 2024 GOP presidential nominee Donald Trump, in response, has blamed Biden for inflation.

Trump's critics, however, have been warning that his proposed tariffs will be inflationary if he wins the election and returns to the White House in January 2025.

Two prominent figures in the financial world — former U.S. Treasury Secretary Robert E. Rubin and ex-American Express Chairman Kenneth I. Chenault — examine Trump's economic proposals in a biting op-ed/guest essay published by The New York Times on July 8. And they warn that the proposals could have dire economic results if implemented.

"We've spoken to many leaders in business and finance who, when it comes to economic policy, are open to the premise that Mr. Trump is a normal presidential candidate," Rubin and Chenault explain. "We strongly disagree…. When it comes to economic policy, Mr. Trump is not a remotely normal candidate. A second Trump term would pose enormous risks to our economy."

Rubin and Chenault cite tariffs and the federal deficit as two things that could be harmful to the U.S. economy under a second Trump presidency.

"Mr. Trump's second-term agenda would further harm our fiscal picture," Rubin and Chenault argue. "A Committee for a Responsible Federal Budget report said that extending the 2017 tax cuts alone would add another $3.9 trillion to the federal debt and increase our debt-to-GDP ratio by approximately 10 percent. This would likely lead to higher interest rates and greater inflation while undermining business confidence, and could reduce our resilience in the face of future national-security or economic crises."

Rubin and Chenault continue, "Mr. Trump would also reduce legal immigration at a time when our economy needs additional workers at all skill levels…. On trade, raising tariffs across the board — as Mr. Trump has promised repeatedly to do — would increase prices for American producers and consumers, reduce our global competitiveness and likely lead other countries to retaliate against our exporters."

Rubin and Chenault also warn that Trump would "take unprecedented action to diminish the independence of the Federal Reserve."

"Some may feel that we made it through one Trump term and are thus likely to make it through another," Rubin and Chenault write. "But a more apt analogy is that after surviving one round of economic Russian roulette, Donald Trump is asking us to take another spin — only this time with many more bullets in the chamber. That would be a very dangerous game."

Read the New York Times' full article at this link (subscription required).

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