Donald Trump is easily one of the most controversial figures in the last decade. From real estate mogul to reality TV star to President of the United States of America, “The Donald” has gone from one major transformation to the next. To say that he is a colorful character is an understatement; from the time of his campaign to now, Donald Trump has said (and done) things that have raised more than just a few eyebrows, both locally and abroad.
Yet, even with negative press that seemingly surrounds him 24/7, the President has been able to silence his critics with an economic program that has done more good than harm for America. At least, for now.
In June 2018, the annual growth rate of the economy was at 4.2%, a stark increase from the 2.2% rate in the beginning of the Trump presidency. Despite falling short of Trump’s 6% goal, it’s still an impressive trajectory. Analysts attribute the growth to Trump’s contentious tax cut programs, although they do caution that the long-term effects might potentially bring negative effects (though that remains to be seen).
Bolstering the economy is a strong stock market that has seen record highs from more than 20 major American companies. From the Dow Jones Industrial Average, Standard & Poor’s 500 Index, to Nasdaq, major US stocks are enjoying a strong upswing thanks to decreased bureaucratic processes, US-centric domestic policies, and generous corporate tax cuts.
Furthering strengthening the economic uptick, unemployment rates under the Trump administration sharply declined, with July 2018 seeing the lowest-levels since 2001 at 3.9%. Some pundits argue, however, that this was a trend started under Obama, with the previous president ending his tenure at 4.8% unemployment. However, it can’t be ignored that new jobs, a healthy stock market, and empowered corporations have all contributed to lowering unemployment and securing the U.S.’ position as a reigning economic powerhouse.
On paper, the rising economy under Trump seems like a good thing. However, the continued growth of the economy has also increased consumer confidence, leading to more consumption of imported goods. This has created trade deficit levels not seen since 2008. Trade deficits happen when more goods are imported rather than exported, meaning the country as a whole is spending more than its earning (at least, in terms of foreign trade, which supports more than 39 million jobs in the US).
Analysts predict that this is a trend that could continue, considering the Trump administration’s pull-out from the Trans-Pacific Partnership trade deal and their renegotiation of the North American Free Trade Agreement. The President has also started imposing huge tariffs on China, one of our most important trading partners, in an attempt to discourage the US from spending too much on Chinese goods.
These polarizing decisions, coupled with Trump’s questionable comments on a number of issues, have created a negative view of the US by our foreign partners, even our allies. In a recent speech in the UN, Trump’s comments about how his administration is the “greatest in American history” drew chortles and chuckles from the international assembly.
The world community’s opinion of the US is at an all-time low, with multiple countries expressing doubts over Trump’s handling of international affairs. And while it’s tempting to dismiss the naysayers with “sticks and stones may break my bones”, these opinions also dictate how our foreign partners will deal with us in terms of trade, free movement of goods, strategic alliances, among others.
Although the economy remains strong, further growth is hindered by the mishandling of international affairs, Trump’s own handling of his personal comments, and a divided congress. Yet, even with these obstacles, the outlook for the future is not as bleak as some pundits will have us believe, but it isn’t bright either.
Although unemployment rates are down and the country is still enjoying an economic upturn, wages remain low. Despite numerous tax breaks given to corporations, the effects have yet to trickle down to employees. Wages in 2018 did go up from 2.5% to 2.9%, but this is low, considering the decline in unemployment rates and a healthy inflation rate of 1.9%. While politicians remain hopeful that wages will increase as demand for more goods increases, economists remain wary.
Analysts are also wondering how much of the current economic prosperity we’re enjoying is a direct result of Trump’s tax cuts and other programs. If it is, is it sustainable? If it isn’t, what then is the driving force, or forces? Is this a bubble that will burst
Despite the setbacks the administration faces, by and large the economy under Trump has been, for lack of a better term, not bad. Yes, the trend was started during the Obama administration, but the Trump administration has done its best to steer the country away from an economic crisis. Much can be said about The Donald’s personal demeanor, but to address his economic policies, we give credit where credit is due: Not bad, Mr. President.