Former President Donald Trump’s plans to pump up American manufacturing and cut taxes would result in higher inflation, fewer factory jobs and a bigger budget deficit, according to a survey of prominent economists.
Of 50 economists in a Wall Street Journal survey, 68% said Trump’s policies would mean inflation would likely be higher, while only 12% said that about Vice President Kamala Harris’ proposals.
The survey is taken quarterly and includes economists from Wall Street, business and academia, the Journal said Monday. The outlet noted that 66 economists sent in responses this time, but not all of them answered every question.
Trump has proposed a broad tariff on goods brought in from other countries to be sold here of 10% up to 20%, as well as a higher tariff on Chinese goods of 60%. A vast majority of economists agree that the higher tariff charges on importers would be passed on to consumers, and many believe that if the charges were enacted they could spark retaliatory tariffs against U.S. goods sold abroad.
In a related question, 61% of the economists polled said interest rates would also move higher under Trump.
Trump has disputed, without offering any evidence, that his tariffs would be passed on to prices at the cash register. His campaign has also said his tariff plan would spur a spike in U.S. manufacturing, with the idea being that companies would produce more goods in the U.S. to avoid tariffs.
But the economists in the Journal poll also threw cold water on that idea.
Out of 44 economists answering, 59% said there would be fewer factory jobs three to five years out, while 16% said there would be more.
Both Trump’s and Harris’ plans have been accused of adding to the government’s ongoing budget woes.
The nonpartisan Congressional Budget Office has estimated the budget gap for fiscal year 2024 will be $1.83 trillion, up about $139 billion from 2023 and one of the highest annual deficits in history.
In the Journal survey, 65% of the economists responding said they thought Trump’s proposals would add to the deficit, up from 51% who said that in the previous quarterly poll.
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