Coverage: Trump’s election and the U.S. economy

Now that Republican presidential candidate Donald Trump has been elected, business journalists spent some time Wednesday examining what the next four years will mean to the U.S. economy.

John W. Schoen of CNBC examined the possibilities:

Like most of his campaign pledges, Trump has set big goals for his economic policies, promising to create 25 million jobs over 10 years and increase the pace of growth to 4 percent a year, more than double the year-over-year pace of the last 12 months.

The plan was short on specifics, which has left investors and business leaders now waiting to see which of the economic policies he’ll move to put in place and the team the assembles to do so. Here are some of the key issues to watch:

Government spending

One of Trump’s signature promises, repeated in his victory speech, is a massive infrastructure spending program.

“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” he told a cheering crowd early Wednesday morning. “We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.”

Neil Irwin of the New York Times noted Trump plans to cut taxes on businesses:

The most detailed policy proposal the Trump campaign issued was on tax policy. It broadly tracks the priorities of a Republican Party that will control both houses of Congress.

So expect major tax cuts, which will especially benefit wealthy Americans and businesses. Mr. Trump’s plan included cutting the rate on the highest earners from its current 39.6 percent to 33 percent and cutting the corporate income tax rate from 35 percent to 15 percent.

Of course any actual changes to tax policy will depend on the results of laborious negotiations with Congress — no campaign policy proposal is ever enacted exactly as written. But Mr. Trump’s proposal is similar to a proposal by House Republicans, and it is quite clear this is the direction Congress will want to go.

Mr. Trump has often cited his experience as a real estate developer and promised he would radically increase spending on public infrastructure. He even said at one point in the campaign that he would double the $275 billion infrastructure plan that Hillary Clinton proposed. He specifically cited infrastructure spending again early Wednesday morning in his victory speech in New York.

Paul Davidson of USA Today explored Trump’s plans for international trade:

Trump is likely to make good on his pledge to declare China a currency manipulator because of its efforts to push down the value of the yuan (which has bolstered its exports at the expense of U,S. shipments to China), Zandi says. Trump has threatened tariffs of 45% on Chinese imports and 35% on Mexican products.

More likely, Zandi says, are more modest tariffs and tougher inspection and other standards that impede imports, raising prices for U.S. consumers. The strategy would increase the risk of retaliation by affected countries, potentially crimping U.S. exports.

Trump has said his aim is to coax manufacturers that have moved jobs abroad to return to the USA and discourage offshoring by U.S. manufacturers.  Zandi says such a scenario is unlikely because of uncertainty over whether the trade barriers will be permanent.  Faucher says offshoring may be slowed somewhat, but the tariffs are unlikely to outweigh its other benefits, such as lower overseas wages and taxes.

Proposed trade deals with Pacific Rim and European countries are probably dead, Zandi says.

“The bipartisan consensus for open trade has broken down,” Faucher says.