The economic policy that US President-elect Donald Trump plans to pursue should not lead to a resumption of inflation in the country, assured one of his most senior economic advisors, Stephen, in an interview with AFP. Moore.
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While the Republican promised to increase customs duties on all products entering the United States, in particular to finance new tax cuts, many economists have warned that such a policy could lead to an increase in prices. consumption, which would force the Federal Reserve (Fed) to keep rates high for longer.
But according to Stephen Moore, the set of planned decisions – which include the deregulation of several sectors and the expulsion of migrants who entered the country illegally – should not have such an effect.
“Certainly, certain policies such as customs duties could have an inflationary effect,” says Mr. Moore, researcher for the conservative Heritage Foundation research center, “but we must keep in mind that they will be coupled with tax cuts “.
“Products made in the United States will be taxed less, those from China will be more taxed, when you take stock, you may have some price changes, but no overall increase,” he added.
“Higher risks”
Economists at Goldman Sachs expect Donald Trump to announce a “significant” tariff hike targeting China and vehicles from Europe as soon as he takes office on January 20, leading to a slight increase in the inflation “with higher risks” if the president-elect “goes further”.
“Mr. Trump’s migration and tax policies risk being a brake on American growth,” said their colleagues at Barclays.
-During the presidential campaign, the Republican candidate announced that he wanted to impose 10 to 20% customs duties on all products entering the United States, and even up to 60%, or even 100%, on those coming from China.
At the risk of complicating the work of the Fed, which seeks to bring inflation towards its objective of 2% in the long term, while the central bank has lowered its rates by a percentage point in recent months, but could change of gear in the face of inflation which resists its monetary policy.
“I think Mr. Trump understands that inflation is the enemy of the people and therefore also the enemy of a presidential mandate,” said Mr. Moore, referring to the impact of rising prices on inflation. presidential election.
“I expect him to put his economic policy in place quickly, which will stabilize prices. But if that doesn’t happen, he’ll get rid of Fed Chairman Jerome Powell.
His will could, however, be thwarted, with Mr. Powell recalling in November that he did not intend to resign and that firing one of the main officials of the Fed, including himself, “was not permitted by law” for the American president .
Action by decrees
According to Stephen Moore, the president-elect has already prepared a series of decrees that he can sign on the first day of his mandate and aimed at reversing several of the policies put in place by Joe Biden.
This should target in particular “policies in favor of green energy”, those seeking to promote diversity and fight against discrimination, the obligation to return to the office for federal employees or even the withdrawal, once again, of the United States of the Paris climate agreement deemed “counterproductive”, estimated Mr. Moore.
Another priority of the future government, immigration with the desire to “close” the southern border and expel undocumented migrant workers, he added.
“First throw the worst people out of the country and then we’ll see,” insisted Stephen Moore.
