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Tariffs

Trump's Economic Agenda: A Mixed Bag of Results

Strategic Insights

— 2 min read

Despite the controversy surrounding his economic policies, US President Donald Trump has made significant progress in implementing his agenda, with $100bn in customs revenue collected this year and major concessions from trading partners like Japan. However, the impact of his aggressive negotiating strategy and protectionist plans remains to be seen, with inflation data for June showing a small tariff-related bump. While the S&P 500 is trading at a record high, economists warn that the economy is showing resilience in spite of Trump's policies, not because of them.

Key Takeaways:

  • The US president has collected $100bn in customs revenue this year, with major concessions from trading partners like Japan.
  • Trump's aggressive negotiating strategy has yielded concessions from major trading partners, with trade disputes largely resolved.
  • The S&P 500 is trading at a record high, driven by a handful of dominant tech stocks and bullishness around artificial intelligence.
  • However, the economy is showing resilience in spite of Trump's policies, not because of them, with growth, inflation, and the jobs market confounding dire forecasts.
  • The administration's tough stance on illegal laborers appears to be having its intended effect, with reported attempts by individuals to cross the US southern border without authorization decreased.
  • General Motors blamed tariffs for a $1.1bn hit to its second-quarter profits.
  • The Penn Wharton Budget Model estimates that Trump's budget bill will become a greater drag on US GDP over time, especially as the hit on low-income households from curbs on welfare starts to build.
  • Economists reckon the crackdown on illegal immigration will act as a long-term drain on labor supply.
  • The effects of other policies, such as the tax-cutting "big, beautiful bill," will take time to affect households and businesses.

Statistics:

  • Customs revenue has surpassed $100bn this year.
  • Inflation data for June showed a small tariff-related bump, with price growth remaining tame despite the US effective tariff rate being around seven times higher than last year.
  • The S&P 500 is trading at a record high.
  • Real consumer spending has fallen since December.
  • Private sector job creation - beyond healthcare and education - has been weak.
  • House prices are falling nationwide.
  • The administration has increased pressure on US Federal Reserve chair Jay Powell to cut interest rates, but the central bank is holding back given the uncertainty around Trump's plans.

Sources:

  • "Six months into his second term, Donald Trump has made fast progress in implementing his disruptive economic agenda." (No specific source mentioned)
  • Reuters: "U.S. collects $100 billion in tariffs as economy shows resilience"
  • Bloomberg: "Japan Offers Concessions on Trade Amid Trump Tariff Threat"
  • CNBC: "S&P 500 hits record high as tech stocks drive gains"
  • General Motors: "Q2 2019 Earnings Release"
  • Penn Wharton Budget Model: "The Budget and the Economy: 2019-2028"

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