Washington, DC — U.S. business economists are concerned about the risks of some of President Donald Trump’s economic policies, saying they fear his tariffs and higher budget deficits could eventually slow the economy.
More than 90 per cent of economists surveyed by the National Association for Business Economics in a report being released Monday said they think the Trump administration’s current and threatened tariffs will harm the economy.
The administration has imposed tariffs on goods from many of America’s main trading partners — from China and Europe to Mexico and Canada. Trump officials argue that the tariffs, which are taxes on imports, will help the administration gain more favourable terms of trade. But so far, U.S. trading partners have simply retaliated with tariffs of their own.
Seven in 10 of the economists surveyed by the NABE said they thought Trump’s tax cuts were “too stimulative” because of the resulting increase in the national debt, even though two-thirds said the corporate tax cuts generally benefit their companies.
The 251 respondents, surveyed between July 19 and Aug. 2, said they do envision some of Trump’s policies as supporting the economy. Eighty per cent, for example, told the NABE that the administration’s efforts to ease regulations would boost growth in the short run.
As a whole, though, the responses of the business economists represent a rebuke of the Trump administration’s overall approach to the economy. The administration has been hailing a recent pickup in growth as heralding the start of an enduring and more vigorous economic boom.
Job gains have been solid, and the economy expanded at a brisk 4.1 per cent annual pace in the April-June quarter. The Trump team has also portrayed a bump in retail sales and the confidence expressed in surveys of consumers and small businesses as evidence of more robust growth ahead.
“Our economy, our investors, our workforce are crushing it right now,” Larry Kudlow, the top White House economic adviser, said at a Cabinet meeting Thursday. “Any business economist worth his or her salt would look at these trends and tell you we’re going for a while.”
But the surveyed business economists said they thought the $1.5 trillion in tax cuts over the next decade would produce higher budget deficits that should be reduced. The survey showed that while the economists expect the tax cuts to boost the economy this year, 62 per cent forecast that the lower taxes would accelerate growth by an annual average of just 0.1 per cent or less through 2027.
Though most respondents told the NABE that they thought the administration’s drive to end many regulations would lift growth in the short run, nearly half said they felt deregulation would have negative consequences over the long term.
In addition, 60 per cent said they believed economic policy should do more to address climate change. The Trump administration announced last year that it was withdrawing the United States from an international climate accord that was designed to reduce carbon emissions.