This column is about the impact of the Trump administration’s policies on our economy.
Public Health
Even everyday colds have an economic impact. Sick adults shouldn’t go to work and sick children keep a parent at home. This disrupts businesses that operate best when employees are at work.
The economic impact of President Trump’s policies will go far beyond the common cold. Robert F. Kennedy Jr is now Secretary of the Department of Health and Human Services. Kennedy is spending much less on medical research. He also is firing medical experts and is appointing incompetent people to medical advisory councils. Our country will fall behind in developing new vaccines. Kennedy is also undermining current vaccination programs. He is making Covid vaccines harder to get and discouraging people from being inoculated against some illnesses at all. We can now expect more flu, measles and Covid. Illnesses are expensive to treat especially if they require hospitalization.
That is bad enough. A new pandemic would be very much worse. According to the U.S. Bureau of Labor Statistics, there were 23 million people unemployed during the recent Covid pandemic. BLS also reported that “the combined effects of increased demand for durables and shortages caused by supply chain disruptions were the main source of inflation …”
Flying blind: President Trump is firing government experts who report on critical economic matters. A recent example is Erika McEntarfer, who was fired from the Bureau of Labor Statistics. She reported on slow job growth and our president didn’t want the public to read that. The Washington Post reported that “The Trump administration is also pushing to overhaul major benchmarks it calls flawed.” In March, Commerce Secretary Howard Lutnick called for a change in the way economic growth is measured. Reliable data is essential for making business decisions. Current policy is leading to doubts about the reliability and even integrity of economic data businesses rely upon.
Undermining the credibility of the Federal Reserve. Our president wants the Federal Reserve Bank to lower interest rates. To that end Trump is trying to fire Lisa Cook, a Federal Reserve governor. The underlying reason is that she voted against rate cuts at a recent FSB meeting. Decisions of the FSB are supposed to be made based on economic considerations like unemployment and inflation. Political interference with the FSB undermines confidence in the integrity of U.S. monetary policy. One result may be a higher cost for borrowing on the international markets. That leads to increased mortgage rates , a slow down in housing construction and other economic activities.
Tariffs: Let’s look at a case where the Trump tariffs have already had an adverse impact. Sachin Shivaram ,CEO of the Wisconsin Aluminum Foundry, had this to say, “It’s a hard truth that some kinds of manufacturing are never going to come back to the U.S. and no amount of protective tariffs is going to change that. This truth is ignored at great peril to American workers.” His company employed 1,000 workers when it was visited by then president Joe Biden in 2020. Tariffs increased the cost of aluminum the foundry needs to make products to sell to other companies. The increased cost of those foundry products caused a loss of customers so WAF had to lay off workers.
Tariffs themselves may be bad policy. The Trump tariffs were imposed by his unilateral and mercurial fiat. This is chaotic, and perhaps unconstitutional. How our tariffs were imposed makes it extremely difficult for businesses to plan. They can’t know what those tariffs might be six months from now let alone in the long term.
It’s worth noting that so far the tariffs have failed. Bloomberg reports that our country has experienced six straight months of shrinking manufacturing and in July job openings fell to the lowest level in 10 months. Long-term unemployment (i.e. six months or more) is at a four year high.
Tourism : International tourism to the U.S. is down in 2025. The World Travel & Tourism Council reports that the U.S. would be the only country among 184 tracked economies to see a decline in international visitor spending. Canada reported statistics that visits to the U.S. declined by about 30% after Trump talked about making Canada the 51st state. ABC News reported that other damaging factors are the travel ban targeting mainly African and Middle Eastern countries, tightening rules for visa approvals and fear of getting erroneously caught up in immigration raids. When tourists don’t come they don’t spend money here.
The health of our economy is connected to the health of our people. In addition, irrational policies, unreliable data and a politicized Federal Reserve Board mean a weaker economy for all of us.
Richard Fein holds a master’s degree in political science and an MBA in economics. He can be reached at columnist@gazettenet.com.