(Tan, Ching-Yu, Director, Research Division IX, Taiwan Institute of Economic Research)
Donald Trump, the Republican presidential candidate, was successfully elected as the 47th President of the United States on November 6, 2024, Eastern Time. He is set to assume office officially on January 20, 2025. Unlike his previous term, Trump will govern with a Republican majority in both chambers of Congress, affording him an opportunity to implement his campaign promises without significant legislative barriers, at least until the 2026 midterm elections.
To understand the direction of Trump’s economic policies, the Republican Party platform adopted at its July 2024 convention provides valuable insights. Under the slogan “Make America Great Again,” the platform outlines 20 core commitments across 10 chapters. These include promises to end inflation, restore American energy dominance, transform the US into a manufacturing superpower, reduce taxes for workers, maintain the dollar as the global reserve currency, and eliminate costly regulations like Biden-era electric vehicle mandates. Key chapters relevant to trade and economic policies include: Chapter 1 on defeating inflation and rapidly lowering prices; Chapter 3 on building the greatest economy in history; Chapter 4 on revitalizing the American Dream to make it affordable for families and young people, and Chapter 5 on protecting American workers and farmers from unfair trade practices.
Of particular note is Chapter 5, which addresses US-China trade policy. The platform commits to revoking China’s “most-favored-nation” status, phasing out essential imports from China, and banning Chinese purchases of US real estate and industrial assets. Additionally, to bolster the American auto industry, the party aims to repeal harmful regulations, roll back Biden’s electric vehicle directives, and block Chinese auto imports.
In general, Trump’s economic vision is characterized by continuity from his previous term. Key priorities include combating inflation by enhancing energy production and curbing federal spending, negotiating fair trade agreements, and safeguarding domestic industries from unfair trade practices. Notable additions include the proposed Trump Reciprocal Trade Act, aimed at addressing inequitable trade practices, and measures to bring critical supply chains back to the United States.
Trump’s proposed policies are expected to have far-reaching global impacts:
1. Trade Tensions: Higher tariffs through reciprocal trade measures could affect not just strategic imports but a broader range of products. This would pose challenges for US trading partners reliant on exports to America.
2.Regional Shifts: Trump’s criticism of the United States-Mexico-Canada Agreement (USMCA) and threats to renegotiate it may disrupt North American supply chains and increase investment uncertainties.
3. Supply Chain Realignment: While Trump initiated the Indo-Pacific Economic Framework during his first term, his stance against outsourcing and his push to repatriate supply chains may strain relations with regional allies.
On the positive side, the US has entered a rate-cutting cycle, supported by a resilient labor market and robust consumer demand. This favorable economic backdrop, with 2025 growth projected at 1.8%-2.0% by institutions like the Congressional Budget Office (CBO) and the Federal Reserve, positions the US for a soft landing. Trump’s proposed tax cuts and pro-investment policies could further boost growth.
Moreover, declining energy and food prices are contributing to economic stability. Brent crude forecasts have been revised downward amid oversupply, while global grain prices have fallen due to favorable weather and bumper harvests. The CBO and Federal Reserve project the personal consumption expenditure (PCE) index will increase by just 2.1% in 2025, signaling continued economic recovery.
However, US-China tensions remain a critical variable. With the prospect of renewed trade wars, there are risks of inflationary pressures re-emerging and global recovery stalling. The trajectory of US-China competition warrants close monitoring.
（Translated to English by Chen Cheng-Yi）
