Choose language:
Main topic

2016 US ELECTION

The Economic Consequences of Mr. Trump

Ivan Vujačić
Aleksandar Milošević

Abstract

The paper analyzes Trump’s economic program. The overall impression is that this program echoes what has already been tried out during the Reagan era. In its philosophy it is reminiscent of Reagan’s “supply side” economics with its three major features: tax cuts and tax reform, massive deficit financing and finally, protectionism. Copying Reagan’s policies in a radically different environment in which the United States economy operates today is in itself dangerous. Considering that many economists see the Reagan economic legacy as highly flawed makes the perception of Trump’s proposals as even more risky. The belief that old policies can be used in situations that only superficially bear resemblance to past experiences is dangerous and leads to uncertainty and possible dire consequences for the global economy. This is even more accentuated with threats of tariff hikes, the scrapping of TPP and the renegotiation of NAFTA.

keywords :

References

    1. Autor, D. H., D. Dorn and G. H. Hanson (2016) The China Shock: Learning From Labor-Market Adjustment to Large Changes in Trade, in “The Annual Review of Economics“ No. 8, pp. 215-240.
    2. Baker, D. (2016), Will the Trans-Pacific Partnership Turn Silicon Valley Into Detroit?, [online]. Available at: http://www.huffingtonpost.com/dean-baker/will-the-trans-pacific-pa_b_9878794.html [Accessed 9 December 2016].
    3. BBC (2016) Nafta can be discussed, but not renegotiated, says Mexico, [online]. Available at: http://www.bbc.com/news/world-latin-america-37945913 [Accessed 9 December 2016].
    4. Beachy, B (2015) “Prosperity Undermined, Public Citizen’s Global Trade Watch“, Washington DC.
    5. Boskin, J. M. (1987) Reagan and the Economy, San Francisco, ICS Press.
    6. Clemens, M. (2015) The US-Mexico Wage Gap Has Grown, Not Shrunk, under NAFTA. Awkward, [online]. Available at: http://www.cgdev.org/blog/us-mexico-wage-gap-has-grown-not-shrunk-under-nafta-awkward [Accessed 9 December 2016].
    7. Clinton, B. (1993), Remarks at the Signing Ceremony for the Supplemental Agreements to the North American Free Trade Agreement, [online]. Available at: http://www.presidency.ucsb.edu/ws/?pid=47070 [Accessed 9 December 2016].
    8. Clinton, H. (2012), Remarks at Techport Australia, [online]. Available at: http://www.state.gov/secretary/20092013clinton/rm/2012/11/200565.htm [Accessed 9 December 2016].
    9. Congressional Budget Office, The Distribution of Household Income and Federal taxes, 2013, June 2016, pp.1-44, [online]. Available at: https://www.cbo.gov/publication/51361  (Accessed, 22 November 2016).
    10. Frankel, J. (2015) Chinese currency manipulation not a problem, [online]. Available at: https://www.hks.harvard.edu/fs/jfrankel/ChinCurrencyManipEAF.pdf [Accessed 11 December 2016].
    11. FRED, Federal Reserve bank of St. Louis, [online]. Available at: https://fred.stlouisfed.org/series/GFDEGDQ188S (Accessed 23 November 2016)
    12. Green, M. J. and M. P. Goodman (2016) After TPP: the Geopolitics of Asia and the Pacific, in Washington Quarterly 38:4, pp. 19-34.
    13. Hufbauer, G. C. and J. A. Schott (2005), Nafta Revisited: Achievements and Challenges, Washington: Peterson Institute for international Economics.
    14. Hufbauer, G. C., C. Cimino, and T. Moran (2014), NAFTA at 20: Misleading Charges and Positive Achievements, in PIIE Briefing 14-3 (2014).
    15. Keynes, J. M. (1925), “The Economic Consequences of Mr. Churchill” in Keynes. John Maynard, (1963) Essays in Persuasion New York: W.W. Norton and Company.
    16. Keynes, J. M. (1920) The Economic Consequences of the Peace, London: Macmillan.
    17. Lawrence, R. (2016) Studies of TPP: Which Is Credible?, [online]. Available at: https://piie.com/blogs/trade-investment-policy-watch/studies-tpp-which-credible [Accessed 9 December 2016].
    18. Martin, M.F. (2016) What’s the Difference? – Comparing U.S. and Chinese Trade Data?, [online]. Available at: https://fas.org/sgp/crs/row/RS22640.pdf [Accessed 9 December 2016].
    19. Mc Bride, William and Mohammed Aly Sergie, NAFTA’s Economic Impact, [online]. Available at: http://www.cfr.org/trade/naftas-economic-impact/p15790 [Accessed 9 December 2016].
    20. MFA of PRC – Ministry of Foreign Affairs of the People’s Republic of China (2016) Foreign Ministry Spokesperson Lu Kang’s Regular Press Conference, [online]. Available at: http://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1422213.shtml [Accessed 9 December 2016].
    21. NAFTA – North American Free Trade Agreement (1993), [online]. Available at: http://www.sice.oas.org/Trade/NAFTA/chap-22.asp#A2205 [Accessed 9 December 2016].
    22. Navarro P. and Jack Autrey (2011) Death by China, New Jersey: Pearson Education
    23. Navarro P. (2012) Confront China’s Currency Manipulation Now, in World Affairs 175 (No. 3), pp. 27-37
    24. New York Times (2013) The Opinion Pages: Room for Debate, What We’ve Learned from NAFTA“ [online]. Available at: http://www.nytimes.com/roomfordebate/2013/11/24/what-weve-learned-from-nafta [Accessed 9 December 2016].
    25. Niskanen, A., William, Moore Stephen (1996) “Supply-side Tax Cuts and the Truth about the Reagan Economic Record”, Washington D.C., Cato Policy Analysis Paper No 261.
    26. Nunns Jim, Burman Len, Page Ben, Rohlay Jeff, Rosenberg Joe (October 16) “An Analysis of Donald Trump’s Revised Tax Plan.” Tax Policy Center, Washington, D.C.: Urban Institute and Brookings Institution.
    27. Oatley, Thomas (2012), International Political Economy, New York: Pearson Longman.
    28. Obama, B. (2015), Remarks by President on Trade, [online]. Available at: https://www.whitehouse.gov/the-press-office/2015/05/08/remarks-president-trade [Accessed 9 December 2016].
    29. PIIE Briefing No. 14-3 (2014), NAFTA 20 years later, [online]. Available at: https://piie.com/publications/briefings/piieb14-3.pdf [Accessed 9 December 2016].
    30. Reagan, R. (1979), Remarks Announcing Candidacy for the Republican Presidential Nomination, [online]. Available at: http://www.presidency.ucsb.edu/ws/?pid=76116 [Accessed 9 December 2016].
    31. Rodrik, D. (2016) The Trade Numbers Game, [online]. Available at: https://www.project-syndicate.org/commentary/tpp-debate-economic-benefits-by-dani-rodrik-2016-02 [Accessed 9 December 2016].
    32. Rothbard, Murray (1988), “The Myth of Reaganomics” in Rockwell, LH, (ed.) (1988), The Free Market Reader, pp. 342-362, [online]. Available at: https://www.mises.org/library/myths-reaganomics (Accessed 22 November 2016)
    33. Scott, R. E. (2011) U.S.-Mexico trade and job displacement after NAFTA, [online]. Available at: http://www.epi.org/publication/heading_south_u-s-mexico_trade_and_job_displacement_after_nafta1/ [Accessed 9 December 2016].
    34. Trump D. [online]. Available at: https://www.donaldjtrump.com/policies/economy/ (Accessed 21 November 2016).
    35. Trump, D. (2016a) Donald’s Trump Deal With the American Voter, [online]. Available at: https://assets.donaldjtrump.com/_landings/contract/O-TRU-102316-Contractv02.pdf [Accessed 9 December 2016].
    36. Trump, D. (2016b) Donald J. Trump’s 7 Point Plan To Rebuild the American Economy by Fighting for Free Trade, [online]. Available at: https://www.donaldjtrump.com/policies/trade [Accessed 9 December 2016].
    37. US-China Business Council (2016) State Export Report, [online]. Available at: https://www.uschina.org/sites/default/files/USCBC%202016%20State%20Export%20Report.pdf [Accessed 11 December 2016].
    38. United States Census Bureau (2016) Trade in Goods With China, [online]. Available at: http://www.census.gov/foreign-trade/balance/c5700.html [Accessed 11 December 2016].
    39. S. Department of the Treasury (2016) Foreign Exchange Policies of Major Trading Partners of the United States (Report to Congress), [online]. Available at: https://www.treasury.gov/resource-center/international/exchange-rate-policies/Documents/2016-10-14%20(Fall%202016%20FX%20Report)%20FINAL.PDF [Accessed 11 December 2016].
    40. Villarreal, M. A. (2016) U.S.-Mexico Economic Relations: Trends, Issues, and Implications, [online]. Available at: https://fas.org/sgp/crs/row/RL32934.pdf [Accessed 9 December 2016].
    41. Villareal, M. A. and Ian F. Fergusson (2015) “The North American Free Trade Agreement NAFTA” [online]. Available at: https://fas.org/sgp/crs/row/R42965.pdf  [Accessed 9 December 2016].
    42. Williams, B. et al. (2016) The Trans-Pacific Partnership: Strategic Implications, Congressional Research Service, [online]. Available at: https://fas.org/sgp/crs/row/R44361.pdf [Accessed 9 December 2016].
    43. Worstall, T. (2016) Trump’s Right, China Is a Currency Manipulator – But They’re Manipulating the Yuan Up, [online]. Available at: http://www.forbes.com/sites/timworstall/2016/11/13/trumpd-right-china-is-a-currency-manipulator-but-theyre-manipulating-the-yuan-up/#2663d3927a6f [Accessed 11 December 2016].

     

PERIODICS Serbian Political Thought2/2016 2/2016 UDK 324+342.849.2(73)”2016”Trump D.:338.2(73) 25-42
https://doi.org/10.22182/spt.1422016.3
Back to Issue Serbian Political Thought - 2/2016