The GOP is campaigning on reducing inflation, and blame President Biden for the current inflation. There are two problems with that. First, inflation has been coming down under President Biden, and second, the Republicans have no proposals to actually reduce inflation.
They just seem to think that electing Donald Trump will magically reduce inflation. That ignores the fact that the economic proposals that Trump is supporting would do just the opposite. They would increase inflation.
Axios.com details Trump's inflationary proposals:
At least four of the main principles of Trump's economic philosophy carry significant inflationary risks, according to economists and Wall Street analysts.
1. Universal tariffs: In what would likely trigger a massive global trade war, Trump has called for 10% tariffs on all imports, 100% tariffs on cars made outside the U.S., and a minimum 60% tariffs on Chinese goods.
- An analysis by the Center for American Progress Action Fund, a Democrat-aligned group, found that the 10% tariffs "would amount to a roughly $1,500 annual tax increase for the typical household."
- In an interview with TIME, Trump disputed that his plans would drive up prices in the U.S. and falsely claimed — as he did throughout his presidency — that tariffs force foreign countries to pay the U.S.
2. Lower interest rates: Trump broke precedent in office by frequently attacking the Federal Reserve for not dramatically lowering interest rates to compete with other countries.
- Hiking interest rates is the Fed's primary tool for fighting inflation, which is part of its mandate in addition to promoting maximum employment.
- The Wall Street Journal reports that Trump allies are drafting plans to gut the Fed's independence and allow the president to have more influence on the central bank's rate decisions.
3. Lower taxes: Republicans' top fiscal priority is extending Trump's 2017 tax cuts, which would cost $3.3 trillion over the next decade, according to the Committee for a Responsible Federal Budget.
- Tax cuts may make life more affordable for many Americans, but more money in the economy also juices consumer demand — potentially pushing up prices.
4. Limits on immigration: Trump has vowed to carry out the "largest domestic deportation operation in American history," planning mass detention camps and raids targeting millions of undocumented immigrants.
- Despite the significant backlash Biden has faced for his handling of the border, economists believe last year's immigration increase allowed the job market to continue booming without adding to inflationary pressures.
- Trump's deportation plans — while supported by the majority of Americans — could exacerbate labor shortages and reignite inflation.
Trump's former trade chief Robert Lighthizer, who is likely to serve in a future administration, wants to devalue the U.S. dollar, Politico has reported. That would be a major shift in currency policy that could send prices of imported goods soaring.
