WASHINGTON — President-elect Donald Trump has secured his path back to the White House with bold assertions of transformative economic policy, including significant tax cuts, expansive tariffs on imports, and the mass deportation of undocumented immigrants working in the country. This move is seen as a stark rejection of President Joe Biden’s handling of the economy and reflects widespread discontent over rising inflation, despite the Biden administration’s achievements of low unemployment rates and steady economic growth.

So what does Trump’s economic future hold? Paul Ashworth, an expert from Capital Economics, recently shared insights regarding the current economic landscape and what can be expected under Trump’s leadership.

**What Economic Conditions Will Trump Face?**
Ashworth notes that Trump is stepping into a robust economy. Nonetheless, public sentiment may diverge from these statistics. Growth indicators are indeed strong, and unemployment stands at a low level. However, consumer confidence is lacking. Although inflation rates have eased, prices remain elevated compared to previous levels, significantly impacting how consumers feel about the economy.

**Trump’s Economic Priorities**
According to Ashworth, Trump’s immediate focus will be on fiscal policy, especially in relation to the original tax cuts from his previous term, which are set to lapse at the end of 2025. The nation’s debt is nearing 100% of GDP and is projected to reach 120% within the next decade. Preventing the expiration of these tax cuts is seen more as a strategy to avoid financial tightening rather than a push for new economic stimulus measures, which, as Ashworth suggests, may not materialize.

**Anticipated Tariff Policies**
During his prior administration, Trump effectively employed tariffs as a bargaining strategy to elicit concessions from other nations. This approach appears to resonate again, particularly with recent threats directed at Canada, Mexico, and China. It is expected that a 10% universal tariff will be introduced, with even steeper tariffs on China. Many countries may struggle to escape these tariffs through negotiation. According to Ashworth, this will likely result in a 1% increase in consumer goods prices, although he emphasizes that this would be a one-time shift rather than a sustained rise in inflation.

**Potential Effects of Deportations**
The economic impact of Trump’s deportation promises is also a consideration. Such measures would not only affect the supply side of the economy but would also influence overall demand, as deported individuals contribute to spending. Ashworth speculates that the adverse effects on supply may outweigh the impacts on demand, potentially resulting in slight inflationary pressure. Industries such as agriculture, construction, food processing, and hospitality are anticipated to be among the hardest-hit sectors, likely leading to increases in food and restaurant prices. Overall, while immigration policies and tariffs might reduce growth by half a percent and increase inflation by 1%, the consequences are viewed as manageable rather than catastrophic.