Corporate tax cuts and import tariffs: Economists warn inflation will be higher under Trump than Biden
Presumptive 2024 GOP presidential nominee Donald Trump and his allies have been hammering President Joe Biden relentlessly on inflation, claiming that prices in the United States would not have soared had Trump remained in the White House after 2020. But Biden's defenders have responded that inflation, following the COVID-19 pandemic, has been a global problem — and that the U.S., during Biden's presidency, has had lower inflation rates than many other countries.
In a detailed article published on July 11, Wall Street Journal reporters Paul Kiernan and Anthony DeBarros emphasize that more economists than not believe that inflation would be worse under Trump in 2025 than during a second Biden term.
According to Kiernan and DeBarros, 68 "professional forecasters from business, Wall Street and academia" responded to a WSJ survey on inflation and the federal deficit.
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"Of the 50 who answered questions about Trump and Biden," the reporters explain, "56 percent said inflation would be higher under another Trump term than a Biden term, versus 16 percent who said the opposite. The remainder saw no material difference."
Many economists who are critical of Trump's economic proposals view his policies on tariffs and immigration as a recipe for higher inflation.
"Trump has proposed a 10 percent across-the-board tariff on imports and a 60 percent or higher tariff on imports from China," Kiernan and DeBarros note. "He has also promised the largest deportation of unauthorized immigrants in history, which might reduce the supply of labor in some industries. Biden has taken several steps to allow unauthorized immigrants to stay in the U.S."
The WSJ reporters add, "He has also issued executive actions aimed at reducing illegal crossings."
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The journalists also report that "51 percent percent of economists anticipate larger federal budget deficits under a Trump presidency, compared with 22 percent under Biden."
"Early in his term in the White House," they observe, "Trump and congressional Republicans cut individual, corporate and estate taxes. Some of those cuts expire at the end of 2025. Trump wants to extend all of them, whereas Biden would allow tax cuts for the wealthiest Americans to expire. He would also raise the corporate tax rate and increase several other taxes."
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Read the Wall Street Journal's full report at this link (subscription required).
