The US economy could be US$1 trillion smaller than otherwise expected in 2021 if Republican candidate Donald Trump wins the US presidential election in November, economics research company Oxford Economics said on Tuesday.
While the firm said Trump’s policies — including more protectionist trade measures, tax cuts and mass deportation of illegal immigrants — might be watered down in negotiations with the US Congress, they could have “adverse” consequences.
“Should Mr Trump prove more successful in achieving adoption of his policies, the consequences could be far-reaching, knocking 5 percent off the level of US GDP relative to baseline and undermining the anticipated recovery in global growth,” Oxford Economics said.
Oxford Economics describes itself as an independent global advisory firm. It is headquartered in Oxford, England, but has offices around the world, including in Chicago, Miami, Philadelphia, San Francisco and Washington.
The Trump campaign did not immediately respond to a request for comment on the research.
At a campaign event in Clive, Iowa, on Tuesday, Trump said that he would grow the US economy.
“We’re going to provide opportunity, prosperity and security for all Americans,” Trump said.
Under its baseline scenario, Oxford Economics expects US GDP, the value of all goods and services produced in the economy, to grow at a fairly constant rate of about 2 percent from next year, reaching US$18.5 trillion in 2021.
If Trump is elected and succeeds in implementing his policies, it predicts growth would slow significantly, falling near zero in 2019, and reducing overall GDP to US$17.5 trillion.
Oxford Economics said its baseline scenario assumes Trump’s Democratic opponent Hillary Rodham Clinton triumphs in the Nov. 8 vote and a split Congress emerges — between a Republican US House of Representatives and a Democratic US Senate — which results largely in a continuation of current policies.
Trump would face challenges winning the backing of Congress for all his policies, and some economists argue that looser tax policy could actually help boost economic growth.
The latest opinion polls show Clinton ahead, but her lead has slipped in recent weeks.
With voters due to choose a new president in less than two months, the latest results of US household incomes quickly became the subject of electioneering.
US officials on Tuesday said that median household income rose last year for the first time in eight years, which the White House said was the fastest income growth recorded in nearly 50 years.
According to US Department of Commerce data, real US median household income rose 5.2 percent between 2014 and last year to US$56,516. The poverty rate fell 1.2 percentage points to 13.5 percent, with 43.1 million Americans living in poverty, 3.5 million fewer than in 2014.
Campaigning in Philadelphia for Clinton, US President Barack Obama said the news showed the country was on the right track.
“We lifted 3.5 million people out of poverty. That’s the largest one-year drop in poverty since 1968,” Obama said.
Additional reporting by AFP
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