Donald Trump is the 47th president-elect after winning the 2024 US presidential election. Two key policy priorities he has promised to pursue are fighting illegal immigration through mass deportations and implementing new trade tariffs.
Harvard Kennedy School of Government professor Jason Furman joins the Morning Brief to discuss the implications of these proposed policies.
Furman notes that the United States is "aging" and that "if it weren't for immigrants, our job numbers every month would be negative."
As for the threat of mass deportations, Furman cautions, "It's like a lot of these other promises: If he does the full-scale version of what he said, he's guaranteeing negative job numbers, lower growth, [and] not to mention something that would be incredibly cruel and inhumane."
Turning to Trump's proposed tariff policies, Furman warns that "it would hurt output and employment," making the Federal Reserve's job harder in the fight against inflation.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Jason, earlier uh on Yahoo Finance, we had a special election coverage and I had the chance to speak with Douglas Holtz-Eakin, the former director of the Congressional Budget Office, and I asked him about the impact of of a Trump presidency, what that would ultimately mean for the labor market specifically focused on his immigration policy and what's been put forward. I want to play a quick bite from what we heard from Douglas.
This is not an economy that is overflowing with excess labor and to cut back on the source of not just low-skilled labor, we're now seeing immigration at all skill levels and those skills are needed in the labor force. So to cut that off and minimize it, I think is a risk that I certainly wouldn't take as a policy maker. One they're going to have to consider pretty carefully.
Jason, what do you think the potential economic impact of Trump's mass deportation plan is, more broadly speaking on the economy?
Yeah, I agree with everything Doug Holtz-Eakin said. Just step back. The United States is an aging country. It's a country with a birth rate that is not sufficient to grow our population. If it weren't for immigrants, our jobs numbers every month would be negative instead of positive. Our growth rate would be considerably lower, and our fiscal challenges in areas like Social Security and Medicare would be much larger. I don't know the extent to which he's going to follow through on his mass deportations, but again, it's like a lot of these other promises. If he does the full-scale version of what he said, um, you know, he is guaranteeing negative jobs numbers, lower growth, not to mention what I think is something that would be incredibly cruel and inhumane.
And so with that in mind, I mean, as you're thinking about some of the larger economic impacts, especially as it is seen as largely inhumane, but at the same time there is a component of immigration that we've talked about time and time again within each employment situation reading as well and how important that has been. As you think about the other side of the dual the Fed's dual mandate on inflation, what impact do you believe that tariffs would pass through to inflation?
Yeah, tariffs would be a quandary for the Fed because they would be a one-time increase in the price level, but they also would hurt output and employment. And so, you know, part of that would say you want to cut rates, part of that would say you'd want to raise rates, then you have to decide whether to look through the whole thing. Um I think in general, though they would be inflationary, consistent with um higher interest rates, all of that exacerbated by a fiscal expansion, which of all the things he promised on the campaign, I think is the most likely. The stock market may stop the crazy stuff on the Fed, may stop the crazy stuff on tariffs. I don't think it's going to stop trillions of dollars of deficit increases.
Jason Furman, who is the professor of the Harvard Kennedy School of Government. Thanks so much for taking the time here with us this morning.
Thank you.
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This post was written by Angel Smith