A cursory glance into the numbers behind Trump’s economy yields analyses incongruous with the overwhelmingly negative press the administration’s policies have received. Pursuit of an aggressive growth strategy has proved a net benefit to the average American household; 56% of American families declared themselves better off financially in 2020 than four years ago. Trump’s trade initiatives notwithstanding, decreases in unemployment and increases in household incomes have placed Americans in a markedly better position than the economic initiatives of the previous administration. Trump’s labor market reached full employment and general wealth has increased greatly among the American people during his tenure. For these reasons, President Trump’s economic policies deserve a B.
The Tax Cuts and Jobs Act of 2017 (TCJA) lacked perfection but made meaningful provisions for the average American. The act lowered tax rates nearly across the board; only 5% of taxpayers paid more in 2018 than 2017; on average, taxpayers in every American congressional district saw a net tax cut. The legislation enacted even more salient reforms on the business tax code, slicing the corporate tax rate from 35% to 21%, and capital investments became fully deductible until five years after the Act’s implementation.
Drastic cuts to corporate tax rates traditionally evoke economic strategies employed by Republican presidents of decades prior. While the success of previous economic initiatives can be contested, a combination of factors diverts this policy from the whistles of its predecessors. Before the Tax Cuts and Jobs Act of 2017, the United States’ statutory corporate income tax rate was the highest among OECD countries—a decidedly non-competitive position, and one that inhibited sectoral growth in the United States, while growth soared in other countries. This incentive for new investment proved successful, a powerful part of the pre-COVID economic increase that marked the incipient years of Trump’s presidency. As corporate tax rates dropped globally in recent decades, the U.S. maintained a comparatively high federal corporate income tax rate—the TCJA brought the U.S. market closer to a competitive position with other national tax rates. Trump’s overarching policies of encouraging individual and corporate tax cuts incentivized income saving and capital investment, a notoriously difficult goal.
Despite economic accomplishments on the domestic level, several blunders in foreign policy mar Trump’s economy. Tariff revenues exploded under Trump, largely as a result of tariffs imposed on solar panels, washing machines, steel, aluminum, and myriad Chinese products. Tariff revenues in 2019 were nearly double those in 2009. However, the American people trend strongly toward bearing the cost of tariffs—not foreign exporters. Rises in income on a general scale may well have been offset by the costs imposed at the hands of Trumpian tariff policies. Trump’s foreign economic policy has not been an overarching negative—tariffs purportedly gave U.S. negotiators more leverage in trade agreements with partners that would not likely have sought to renegotiate existing deals.
Trump’s policy on the Coronavirus pandemic has left myriad questions unanswered. The COVID-19 pandemic has caused enormous damages to the American economy, pushing unemployment up and forcing rent instability on many American households. The Trump Administration responded with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2.3 trillion stimulus bill intended to assuage COVID-19’s economic hardships. However, despite its intentions, many agree that it fell short of its necessary target.
The Trump economy saw myriad domestic successes, even in the midst of harsh partisan opposition and political gridlock. To accurately assess the Trump economy, one must separate the man from the policy—an enormous feat, given the myriad points of criticism so readily available to even the most utilitarian understanding of the past four years—but the reality remains that Trump’s shortcomings in nearly every other policy area far overshadow the economic accomplishments that Trump policy can claim.