As Trump’s first 100 days come to a close, voters may become disillusioned by election promises not kept (Part 2: Economy Analysis)

Click here to see Part 1

Continuing from Part 1, this next part about kept and unkept election promises made by U.S. President Donald Trump is on economy and trade policy.

Analysis

Economy and Trade Policy

Only one of the six promises Donald Trump had made during his election have been fulfilled in regards to the economy. The one promise he did keep was to have his commerce secretary and trade representative identify unfair trade deals. In contrast, he hasn’t designated China as a currency manipulator. Neither has he instituted a 35 percent tariff on certain businesses or forced select companies to produce domestically. He could still keep his promises of a tax overhaul, but it seems unlikely at this point he will renegotiate or leave NAFTA. Finally Trump has yet to pursue a massive effort to rebuild America’s infrastructure. The tax overhaul may be coming soon but the other unfulfilled promises are yet to be seen.

Judging by a list compiled by PolitiFact on July 2016 of Trump’s top campaign promises, at least three of his major election promises established during this time have seemingly been compromised. His statement that he would renegotiate or leave NAFTA was rolled back to a draft with minor changes. Although he has threatened to leave NAFTA if his goals were not met in a renegotiation, what he has now is far less extreme than what he had demanded before. According to a February Gallup poll, Americans are split on whether or not NAFTA is good for Americans. However only 22 percent of Republicans support NAFTA as it currently is. Trump’s current stance on NAFTA is likely quite unpopular with his voter base and could impact the next election unless something changes.

NAFTA is very much tied in with his promise to bring manufacturing jobs back to the United States. Part of Trump’s grievances was about how NAFTA was enabling companies to seek cheaper manufacturing labor in Mexico. Making minor changes to NAFTA is unlikely to bring manufacturing back to the United States in and of itself. However the manufacturing jobs are also tied in with China and its workforce. Part of why China is dominant in the manufacturing sector is due to the low cost of labor. This may also be tied to accusations that China manipulates its currency. By failing to keep the promises to mark China as a manipulator of currency, efforts of which seem to have been abandoned, and instituting a tariff on or forcing companies that predominantly use Chinese factories, it’s unlikely Trump is going to make much impact here as well. At least unless Trump manages to bring manufacturing jobs to the U.S. by other means. Once again, this is likely to be quite unpopular with the Republicans who voted him in.

NAFTA and China are also both issues in another major election promise. This was the promise to impose tariffs on businesses importing manufactured goods from Mexico and China. Trump’s 35 percent tariff rate for these companies that manufacture abroad has not gone anywhere. This is a major election promise in and of itself. Outsourcing of manufacturing jobs, among others, has been a major issue for Americans for quite some time now. Needless to say it’s likely that Trump’s constituents do not approve of a lack of perceived effort to counter outsourcing. It’s important to note that Trump could be holding back on alienating China. It seems he needs the East Asian nation to help with mitigating the threat North Korea currently poses.

The fourth top campaign promise that Politifact came up with that’s relevant to the economy was a broad tax cut for Americans. This cut, which would include everyone or at least corporations and the middle class, is likely to be announced by Trump on the 26th, three days before the current budget deadline. Today, April 24th, he expressed a desire to lower the corporate tax rate to 15 percent. This is a good sign for keeping this election promise as things seem to be in motion. However backtracking on attempts to lower taxes for the middle class, if not all Americans, or disproportionately favoring corporations could alienate his voter base, especially those who consider themselves libertarian. On the other hand, if the tax cuts go through and fail to create enough economic growth, there would need to be more borrowing in order to meet America’s fiscal budgets. The national debt has been an issue for the American people for at least several years now.

The one promise that Trump insofar has fulfilled, the identification of foreign trade abuses, would be a valuable tool for Trump. This is especially the case should he decide to revisit any of the economic and trade promises he has yet to fulfill. With the executive order to his commerce secretary and trade representative at the end of March and a deadline of 90 days to find foreign exploitation of America’s trade, results should come in late June of this year. This would allow Trump to go after unfair trade deals, which could involve China in spite of Trump’s current relationship with the country. In addition it would create evidence to justify Trump’s actions in the eyes of not only the American people but in America’s lawmakers. Lawmakers who would be against Trump’s efforts, if there is strong evidence of trade exploitation, would likely suffer a hit in popularity with their constituents. In turn Trump would gain clout that would assist him in fulfilling his government-related election promises.

The promise to begin a massive project to repair America’s aging infrastructure has yet to begin but it is certainly something that is not only achievable and ambitious but necessary. As the years pass, not only will damaged and dated roads, highways and structures act to slow the flow of commerce, the risk of catastrophic failure increases. According to a Washington Post report in February 2017, more than 55,000 bridges are in need of repair or replacement. Should a bridge fail, lives may be lost and there will likely be damage to the economy. This is especially true if the bridge has heavy traffic. If this election promise is ignored, there is the possibility of some sort of infrastructure failure within Trump’s term as president. As long as the need for repairs and replacement is ignored, this likelihood increases. In addition, a massive effort to replace and improve America’s economic bloodstream will require a sizable amount of workers. This would be akin to the Works Progress Administration of U.S. President Franklin D. Roosevelt’s New Deal. It would create needed jobs for unemployed Americans, including those who see outsourcing as a cause for their unemployment. One possible drawback to this needed project is an increase in traffic density as detours and construction sites are established.

Update

April 26, 2017 – Trump has been reported to be getting ready to sign an executive order to remove the United States from NAFTA, fulfilling this election promise.

Brief Sources

Qiu, Linda. (2016, July 15) Donald Trump’s top 10 campaign promises. PolitiFact. Retrieved from http://www.politifact.com/truth-o-meter/article/2016/jul/15/donald-trumps-top-10-campaign-promises/ and https://archive.fo/fKOhJ

Swift, Art. (2017, February 24) Americans Split on Whether NAFTA Is Good or Bad for US. Gallup. Retrieved from http://www.gallup.com/poll/204269/americans-split-whether-nafta-good-bad.aspx and https://archive.fo/OvI2o

Haley III, Ashley. (2017, February 15) More than 55,000 U.S. bridges are in need of repair or replacement. The Washington Post. Retrieved from https://www.washingtonpost.com/local/trafficandcommuting/more-than-55000-us-bridges-are-in-need-of-repair-or-replacement/2017/02/14/813a8e40-efa7-11e6-b4ff-ac2cf509efe5_story.html and https://archive.fo/bvsFZ

This is part 2 of a series of blog posts about the impact of U.S. President Donald Trump’s kept and unkept election promises as his first 100 days wind to an end. Feel free to leave any comments. Feedback is much appreciated.
Click here to see Part 3

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