New Report Suggests Trump Initiatives Could Raise – Not Lower – Some Prices

Presidential candidate Donald Trump has campaigned that he will enact new measures that he says will result in lower prices for consumers. But a new report, based on interviews with six economists, suggests they “would instead put new upward pressure on prices.”

The report looks at three initiatives Trump has talked about in his campaign speeches: “the largest domestic deportation in American history,” which would likely cause increases in the cost of labor due to a smaller workforce; tariffs on virtually all imported goods which would result in higher prices for both imports and domestic-made competing goods; and additional tax cuts beyond the 2017 measures he would make permanent that would also result in higher prices in an economy already at full employment.

“I think we can say with a lot of confidence that President Trump’s trade policies and immigration policies would result in price spikes,” Michael Strain, director of economic studies at the American Enterprise Institute, told the New York Times for their report. The Times characterized his organization as “right-leaning,” seemingly in support of conservative measures such as some of the ones Trump is suggesting.

A Trump campaign official disputed the findings of the Times study, saying other measures like increased energy production, fewer regulations and reduced federal spending would counteract those other policies. During Trump’s presidency, the newspaper pointed out, federal spending grew in the years when Republicans controlled Congress and the national debt grew by about $8 trillion even though he campaigned on eliminating it within eight years.

The detailed examination of the impact of Trump’s campaign rhetoric becoming fact caused the Times to write, “As a matter of textbook economics, each of those three signature Trump policy plans would be likely to raise prices. Some could even cause continued, rather than one-time price increases – adding to the possibility of inflation.”