Voters don’t usually choose candidates who would make them worse off. Donald Trump could break this mold, as he has many others.
Trump, the Republican presidential nominee, unabashedly promotes plans that economists and policymakers warn would harm the economy and raise out-of-pocket costs for many Americans. This would normally tank a politician’s candidacy. Yet Trump is in a tight race with Democratic nominee Kamala Harris, with most national and swing-state polls showing a deadlock.
Three Trump plans are among the most troublesome. First, he wants to impose new tariffs on almost all imports to the United States. Second, he wants federal agents to track down and deport millions of undocumented migrants, even if they have jobs and contribute to economic growth. Third, he vows unspecified changes to the Affordable Care Act (ACA), the 2010 health law that has reduced the number of uninsured Americans by more than 20 million people.
Before going deeper into each of those three plans, here’s a request: Please take our survey on Trump’s economic policies and tell us what you think. We want to hear from Trump and Harris voters alike, plus anybody who’s undecided or plans to vote for somebody else. Maybe you don’t believe what so-called experts say about the Trump plans or you haven’t had enough time to think about it. Or you’re simply unsure. Whatever the case, we’ll publish the survey results in a future story and do a similar analysis of Harris’s policies in the coming days.
Now for those three Trump humdingers:
New tariffs. Trump wants to impose new customs duties of at least 10% to 20% on most imports, raising that to 60% for imports from China. The United States imports about $3.9 trillion worth of goods per year, and Trump’s tariffs would be a tax that pushes the cost of all those goods higher. Some of that additional tax would be paid by wholesalers who would try to pass it on to the next buyer and ultimately to the end consumer. Some of the additional tax would be on finished goods such as electronics, appliances, and clothing that would immediately show up in the sticker prices at stores. Trump claims that foreign producers pay for tariffs, but this is demonstrably false. Tariffs are a source of federal revenue that goes into the US Treasury’s coffers just like income and corporate tax revenue.
The Peterson Institute for International Economics estimates that Trump’s tariffs would cost the typical American household at least $1,700 per year via higher prices and other damaging effects. For context, the higher inflation during President Joe Biden’s first three years in office cost the typical household about $500 per year in foregone purchasing power. If Trump promised voters a rate of inflation that was three or four times worse than it was under Biden, he’d have no chance. Yet he’s pitching something that could be just as damaging, and millions of voters don’t seem to mind.
Read more: What are tariffs, and how do they affect you?
Trump argues, of course, that tariffs are necessary to bring more production back to the United States, along with the extra jobs that would entail. Even if that worked, however, it would mean permanently higher prices because domestic production costs more and protectionism “protects” domestic industries by letting them charge more. And there’s no evidence the more moderate tariffs of Trump’s first term accomplished anything like this, due to retaliatory tariffs by trade partners, loopholes, and deliberate tariff exclusions for industries in Trump’s good graces. This is why most economists think private-sector producers should decide where to make stuff, except in rare cases where there’s an overwhelming need for the government to intervene.
Deportation. Trump wants government agents to find and deport as many as 20 million undocumented migrants in the United States, even though the real number is probably more like 11 million or 12 million. There’s no serious case for deliberately letting migrants into the country illegally, rather than forcing them through the immigration system that exists to vet newcomers. But it’s a different matter once migrants are in the country because most migrants have jobs and driving them from the country en masse would cause economic problems we might prefer to avoid.
Migrants are a critical source of labor in the agriculture, healthcare, and hospitality industries, among others. If those workers disappeared, there’s no reason to think native-born Americans would suddenly take their place. The unemployment rate is very low, and there aren’t many people who want relatively low-paying jobs that, in many cases, are physically demanding. If migrant workers weren’t there, employers would have to pay more to draw people into those jobs or do without. One inevitable outcome would be higher prices, especially for food.
A far better approach would be for Congress to first pass immigration reform and provide new resources needed to streamline a clogged system and process asylum claims much faster. A more rational immigration system would also focus on the nation’s economic needs and admit more people legally based on the contributions they could make to economic growth. We should also acknowledge that the United States needs more legal immigrants, not fewer, to help fund Social Security and Medicare into the future. Trump’s deportation plan considers none of this.
Read more: What the 2024 campaign means for your wallet: The Yahoo Finance guide to the presidential election
Changing the Affordable Care Act. During the presidential debate on Sept. 10, Trump famously said he has a “concept of a plan” for replacing the Affordable Care Act, the 2010 law that established new ways of getting health coverage for people not covered by an employer plan. Trump was vague, but it’s well known he tried to repeal the ACA during his first presidential term, with nothing on hand to replace it with. That effort failed, but Trump still seems to have something in mind. His vice presidential nominee, JD Vance, has suggested that moving sicker people into separate insurance pools could provide healthier patients with cheaper plans that offer more.
Voters hate this idea, or at least they used to. Vance is basically saying there should be separate rates for sicker people, which is how the insurance system used to work before the ACA banned special treatment for people with “preexisting conditions.” That was the most popular part of a law that was generally unpopular at first but now enjoys widespread support. There are certainly flaws in the ACA, as there are in the whole overpriced US healthcare system. But taking away anybody’s health insurance coverage or making it more expensive should be a nonstarter. The ACA has slashed the US uninsured rate from 15% to 8%, and future changes should only push the uninsured down lower. “Less insurance, higher costs,” read no bumper sticker ever.
One-by-one, these issues aren’t necessarily top of mind for every voter. Some Trump supporters undoubtedly favor his low-tax, deregulatory approach to the economy, while others find his anti-woke attitude refreshing. Some voters just like the guy, even if his rants tend to go over the top.
But there’s a reason Goldman Sachs, Oxford Economics, Moody’s Analytics, and most serious forecasting outfits think Trump’s plans would be worse for the economy than Harris’s. Higher tariffs and a war on low-income migrant workers would produce economic shocks and raise costs, whereas Harris’s plan would be much more like a continuation of the status quo. Trump voters may hope Trump’s policies produce the longer-term effects he says they will, but there would be near-term pain Trump never mentions.
Again: Tell us what you think by taking our survey. We’re eager to learn what we might be missing and report back.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on X at @rickjnewman.
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