Has Trump promised too much to the American economy?

Donald Trump has promised big changes for the world’s largest economy.

On the agenda are “an end to the devastating inflationary crisis”, tariffs and major tax cuts, regulation and the size of government.

This combination, he says, will spur an economic boom and revive a withered faith in the American dream.

“We’re at the beginning of a great, beautiful golden age of business,” he promised from the podium at Mar-a-Lago earlier this month.

But the president-elect is beset by warnings that many of his policies are more likely to hurt the economy than help it.

And as he prepares to launch his plans, analysts say he will soon encounter political and economic realities that will make it difficult to fulfill all his promises.

“At this point, there is no clear path forward to meet all of these goals because they are inherently contradictory,” said Romina Boccia, director of budget policy and law at the Cato Institute.

Here’s a closer look at his key promises.

What Trump promised:

“Prices will fall,” he kept repeating.

It was a risky bet – prices rarely fall, unless there is an economic crisis.

Inflation, which measures not price levels but the rate of price increase, has already fallen significantly, while it has proven difficult to eradicate completely.

What complicates it:

Trump tied his claim to promises to increase already record US oil and gas production, lowering energy costs. But the forces affecting inflation and energy prices are largely outside the president’s control.

To the extent that White House policies make a difference, analysts warn that many of Trump’s ideas — including tax cuts, tariffs and migrant deportations — risk making the problem worse.

Economist John Cochrane of the right-wing Hoover Institution said the big question facing the economy was how Trump would reconcile “tensions” between the more traditionally pro-business parts of his coalition and “nationalists” focused on issues such as border control and rivalry with Cinema.

“It’s clear that both camps can’t get what they want,” he said. “That’s going to be the underlying story and that’s why we don’t know what’s going to happen.”

What Trump voters want:

Promises about inflation were key to Trump’s victory, but by many measures, such as growth and job creation, the economy as a whole was not in the dire straits he portrayed on the campaign trail.

Since his victory, he has tried to temper expectations, warning that it will be “very difficult” to bring prices down.

Amanda Sue Mathis, 34, of Michigan, says she thinks Trump’s promises are doable, but it could take time.

“If anyone can make better deals to make things more affordable for Americans, it’s Donald Trump,” she said. “He literally wrote the book on the art of making deals.”

What Trump promised:

Trump’s most unorthodox economic promise was his promise to impose tariffs – a border tax – of at least 10% on all goods coming into the US, rising to more than 60% on products from China.

It has since stepped up its threats against certain countries, including allies such as Canada, Mexico and Denmark.

Some of Trump’s advisers have suggested that the tariffs are negotiating tools for other issues, such as border security, and that he will ultimately settle for a more targeted or gradual approach.

What complicates it:

The debate has fueled speculation about how aggressive Trump will decide to be, given the potential economic risks.

Analysts say the tariffs are likely to lead to higher prices for Americans and pain for companies hit by foreign retaliation.

And unlike Trump’s first term, any measures will come at a delicate time, as the long-running US economic expansion appears to be in its final stages.

Even if the harshest tariffs never materialize, the policy debate alone creates uncertainty that could reduce investment and reduce US growth by as much as 0.6% by mid-2025, according to Oxford Economics.

“They have a very limited margin for error,” Michael Cembalest, president of market and investment strategy at JP Morgan Asset Management, said in a recent podcast. He warned that the desire for a major overhaul will probably “break something”, but what remains to be seen.

Trade lawyer Everett Eissenstat, who was a White House economic adviser during Trump’s first term, said he expected sweeping tariffs but acknowledged the plan would compete with other goals.

“There are always tensions. There is never perfection in the world of politics. And obviously one of the reasons I think he got re-elected is the concern about inflation,” he said.

“We are in another world [than the first term] and we’ll have to see how it plays out,” he said.

What Trump voters want:

Lifelong Republican Ben Maurer said he wants Trump to focus on the broader goal of reviving U.S. manufacturing rather than tariffs per se.

“I feel like it’s more of a negotiating tactic than an actual political path,” said the 38-year-old, who lives in Pennsylvania.

“I’m not saying he’s not going to put tariffs on anything — I think he will — but I think he’s going to be more strategic than what exactly he’s going to put tariffs on. I support that and I feel like his judgment is good enough to decide what to tariff.”

What Trump promised:

He has laid out a plan for growth – lower taxes, less regulation and smaller government, which he says will free up American business.

What complicates it:

But analysts say cutting regulations could take longer than expected. Trump is widely expected to favor extending tax cuts that expire before spending cuts.

Ms. Boccia of the Cato Institute said she expects a spike in borrowing under the Trump administration and an increase in inflationary pressures.

In financial markets, these concerns have already helped increase interest rates on government debt in recent weeks, she pointed out.

While Trump will also face some resistance from those within his own party who are concerned about the already high US debt, Ms Boccia said extending the tax cuts – which are projected to add more than 4% to the US debt over the next decade, 5 trillion dollars – makes it almost certain.

In contrast, Trump banned much of the budget during his campaign when he promised to leave major programs, such as Social Security, unchanged.

The so-called Department for Government Effectiveness (DOGE) headed by Elon Musk and Vivek Ramaswamy has also publicly scaled back its ambitions.

“Economists are picking up on the signals the market is sending right now, but not Washington,” she said. In the end, politically, it takes the path of least resistance.

What Trump voters want:

Mr. Maurer said cutting red tape was central to his administration hopes.

“Government spending is absolute madness,” he said.

Additional reporting by Ana Faguy