Trump’s Platform: Can He ‘Make America Affordable Again’?
Recently, the Republican National Committee Platform Committee passed Donald Trump’s 2024 Republican Party Platform. This platform — called the “2024 GOP Platform to Make America Great Again” — consists of 20 promises the party intends to keep if Trump wins the next presidential election.
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Among these promises are “end inflation, and make America affordable again” and “large tax cuts for workers, and no tax on tips.” If all works out as intended for the Republican party, the goal is to ease some of the economic burden many Americans are facing and — as it says on the tin — make the country more affordable.
But is this possible? Can a second term in office enable Trump to truly make America affordable again? GOBankingRates reached out to some experts to see what they think.
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Inflation Has Stabilized but Can It Drop Further?
Inflation has become a significant concern for many Americans, so one way Trump could make the country more affordable is by controlling it. Inflation levels rose to historical highs during the COVID-19 pandemic, but they’ve settled since then.
For the 12 months ending in June 2024, the annual inflation rate is 3.0%. This is 0.3% lower than it was previously. Still, whoever is elected as the next president has a long road ahead when it comes to dealing with inflation.
In a recent report, Maxime Darmet, a senior economist at Allianz Trade, wrote, “While the U.S. has remained remarkably resilient despite rising interest rates and global uncertainty, it has become more prone to inflation volatility, given a larger exposure to frequent supply shocks and structural labor shortages…Demand-boosting policies — such as tax cuts — or supply-hurting policies — such as tariff hikes — could re-ignite inflation faster and push up interest rates.”
Tax cuts are also part of Trump’s recently unveiled campaign — “large tax cuts for workers, and no tax on tips.” This sounds great on the surface as it means more money for the individual at the end of the day. But if tariff hikes decrease the number of available goods, it might not have as great of an impact as intended.
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Deregulation Could Lower Costs
Another way Trump has promised to combat inflation is via deregulation.
“By reducing regulations on businesses, Trump believes this can lower production costs and, in turn, decrease prices for consumers,” said Ryan Jacobs, CEO, CIO, and portfolio manager at Jacobs Investment Management.
Jacobs added that deregulation could theoretically save businesses more money as well. In turn, this could lower production and operating costs, putting more money in business owners’ pockets. In theory, lower operating costs could even lead to higher wages.
Like tax cuts, certain deregulatory policies could increase spending power and lead to economic growth. This is something that could help both consumers and businesses.
However, any such effects are likely to take time. Not only that, but as Nischay Rawal, managing partner at NR CPAs and Business Advisors, pointed out, “Presidents have limited means to directly cut citizens’ costs.”
Only time will tell what actually happens and how affordable Trump — or anyone else — can make the country.
New Policies Could Reduce Reliance on Outside Forces
New energy and trade policies could also potentially help combat the rising costs of consumer services and goods. As part of Trump’s campaign, there are promises to make America the dominant energy producer in the world, cut back on outsourcing so as to turn the country into a manufacturing powerhouse and keep the U.S. dollar as the world’s reserve currency.
These proposed changes, if successfully enforced, could have a wide-reaching impact on the economy — and potentially have a trickle-down effect on the individual consumer. Again, it will take time to see the full impact on the American people, but Jacobs believes there’s hope for greater affordability.
“Focusing on domestic energy production to reduce reliance on foreign oil can stabilize fuel prices, a major component of the CPI,” he said. “Expanding energy production could lead to lower energy costs, which trickles down to lower prices for goods and services.”
As for trade policies, Jacobs said that renegotiating the existing policies could protect jobs and reduce the current trade deficit. This, in turn, could potentially lower the CPI. Through more fair trade agreements, prices may stabilize and domestic industries could be better supported.
But as Rawal pointed out, there’s always a possible downside to consider.
“Tariffs often raise consumer costs and provoke retaliation from trading partners,” Rawal said. “Policies may temporarily boost sectors but rarely override market forces long-term.”
In regard to trade policies, Rawal noted that they can impact industries unevenly. While some areas might gain, others could struggle.
“The overall impacts are complex,” Rawal said. “I’ve seen both short-term gains and unforeseen consequences from policy changes.”
Boosting Infrastructure Could Lead To More Jobs
According to Jacobs, Trump’s proposal of boosting infrastructure and providing more support for small businesses could have a positive long-term effect on the populace. Not only could this potentially lead to more jobs — and reduce the unemployment rate — but it could encourage entrepreneurship across various industries.
This could lead to some major economic gains, though the full effect on individuals is yet unknown. It’s possible, however, that the creation of more jobs could boost the average consumer’s disposable income. It depends on the industry and what’s considered fair or competitive wages
It’s a Balancing Act
When it comes to inflation, the Federal Reserve’s response to Trump being back in office could have a much greater impact than people realize.
In his report, Darmet wrote, “Against this backdrop, we would expect the Federal Reserve to be forced to pause its easing cycle in 2025 and the U.S. 10-year yield to stay above 4%.”
This could control inflation to a point, but it would still likely affect economic growth initially. So, once again, the full impact of a Trump reelection and his ability to make America more affordable could take years to fully realize.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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