US business economists are concerned about the risks posed by some of US President Donald Trump’s economic policies, saying they fear his tariffs and higher budget deficits could eventually slow the economy.
More than 90 percent of economists surveyed by the US National Association for Business Economics in a report released yesterday said they thought that the Trump administration’s current and threatened tariffs would harm the economy.
The administration has imposed tariffs on goods from many of the US’ main trading partners — from China and Europe to Mexico and Canada.
Administration officials have said that the tariffs would help the administration gain more favorable terms of trade.
However, so far, US trading partners have simply retaliated with tariffs of their own.
Seven in 10 economists surveyed by the association said that they thought Trump’s tax cuts were “too stimulative” because of the resulting increase in the national debt, even though two-thirds said that the corporate tax cuts introduced this year generally benefit their firms.
SUPPORTIVE
The 251 respondents, surveyed between July 19 and Aug. 2, said that they do envision some of Trump’s policies as supporting the economy.
Eighty percent told the association that the administration’s efforts to ease regulations would boost growth in the short run.
However, as a whole, the responses of the business economists represent a rebuke of the Trump administration’s overall approach to the economy.
The administration has been hailing a recent pickup in growth as heralding the start of an enduring and more vigorous economic boom.
Job gains have been solid and the economy expanded at a brisk 4.1 percent annual pace in the April-to-June quarter.
The Trump team has also said that a bump in retail sales and the confidence expressed in surveys of consumers and small businesses are evidence of more robust growth ahead.
“Our economy, our investors, our workforce are crushing it right now,” White House economic adviser Larry Kudlow said at a Cabinet meeting on Thursday last week. “Any business economist worth his or her salt would look at these trends and tell you we’re going for a while.”
However, the surveyed business economists said that they thought the US$1.5 trillion in tax cuts over the next decade would produce higher budget deficits that should be reduced.
SHORT RUN
The survey showed that while the economists expect the tax cuts to boost the economy this year, 62 percent forecast that the lower taxes would accelerate growth by an annual average of just 0.1 percent or less through 2027.
Although most respondents told the association that they thought the administration’s drive to end many regulations would lift growth in the short run, nearly half said that they believed deregulation would have negative consequences over the long term.
In addition, 60 percent said that they believed economic policy should do more to address climate change.
The Trump administration last year announced that it was withdrawing the US from the Paris Agreement on climate change.
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