Donald Trump’s return to the presidency in 2024 raises questions about the economic direction the United States will take — particularly regarding trade policies, interest rates, and broader fiscal strategies. Trump’s previous tenure brought unconventional approaches that left lasting marks on global trade dynamics and domestic financial policies. Now, the former president’s second term will likely deepen those shifts or pivot toward new strategies, depending on how his administration balances political goals with economic realities.
Trade policy under the Trump administration has historically prioritized reshaping global commerce in favor of perceived American interests. Tariffs, which he deployed as a tool to renegotiate trade deals and address trade imbalances, remain central to his economic strategy. The U.S.-China trade war marked his presidency’s most visible use of tariffs, aiming to push Beijing toward concessions. His renewed administration will likely reinvigorate this approach, potentially targeting not only China but other trading partners seen as undermining U.S. economic strength. While tariffs aim to protect domestic industries, they could also reignite tensions with allies and disrupt global supply chains, adding cost pressures for American businesses and consumers. The trajectory of these policies will hinge on whether Trump maintains or expands this aggressive stance or recalibrates based on lessons from his first term.
The intersection of monetary policy and fiscal strategy will also come into sharp focus. Although the Federal Reserve operates independently, Trump has not hesitated to voice opinions on interest rates, pressuring the central bank during his first term to keep rates low to stimulate economic growth. His administration could renew such pressure, especially if it prioritizes growth over inflation control. Yet, the economic landscape in 2025 differs significantly from the low-rate environment of his earlier years. Elevated inflation or lingering effects from pandemic-era policies could constrain the Fed’s willingness to adjust rates as Trump might prefer, setting up potential friction between fiscal and monetary authorities.
Broader economic impacts will likely stem from how the Trump administration addresses deficit concerns, infrastructure spending, and corporate taxation. Trump’s prior tax cuts aimed to incentivize investment and growth while expanding the federal deficit — a trade-off that drew both praise and criticism. In his second term, Trump might pursue additional tax reforms or deregulatory efforts to sustain business confidence and job creation. However, the economic context will shape these efforts, as rising debt levels and fiscal constraints might limit the feasibility of sweeping reforms without difficult trade-offs.
At the heart of these policies lies an administration intent on asserting control over economic outcomes, often through headline-grabbing initiatives. Trump’s approach will likely continue to test traditional boundaries — whether by reshaping trade alliances, indirectly influencing rate policies, or recalibrating fiscal priorities. These strategies’ long-term success or challenges will depend on execution and the interplay between global economic trends and domestic policy choices.
Ultimately, Trump’s impending second presidency brings familiar yet evolved strategies to the forefront, aiming to project strength and decisiveness in managing the economy. Whether these measures stimulate sustained growth or encounter significant headwinds will rest on how effectively they adapt to an economy vastly different from the one Trump inherited in 2016.
In the meantime, for those hoping to forecast the macroeconomic environment as part of the valuation process, Appraisal Economics provides high-level insights and analysis pertaining to current and prospective economic conditions.