Business and COVID-19
6.6 million new employment were created under Trump’s watch before the COVID-19 outbreak brought the economy to a halt. The new jobs created by his measures were equivalent to a 4.3% increase in employment over Obama’s final employment total of 152.2 million.5
The shutdowns imposed to halt the spread of the epidemic resulted in unprecedented numbers of people losing their jobs.
In March of 2020, in response to concerns that COVID-19 will cause a loss of 20. 5 million jobs in April alone, Trump enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Each employee who stays on board can receive a retention bonus of up to half their salary, or $10,000.
Tax deductions and withholdings from paychecks
Even if the CARES Act helped out, there were still 10 million unemployed individuals in February of 2021.8
A Trade Policy Based on “America First”
Trump’s economic nationalist trade agenda, “America First,” was named after the slogan. To help domestic businesses compete, he advocated for protectionist measures like tariffs and taxes. The strategy achieved this goal in a few key ways:
Put an end to overseas outsourcing and bring jobs back here.
Between 2000 and 2011, the United States of America lost 31.4% of its manufacturing employment, which paid an average of $28.85 per hour and were relatively secure.910
Many of these positions were outsourced by American firms in an effort to cut costs. However, some industries have become obsolete due to the rise of robotics, AI, and bio-engineering, so even if outsourcing were to halt, it might not bring back all the lost jobs. More jobs could be created for Americans if the government funded education and training in these fields.
Improve America’s Ability to Compete with China
Trump slapped tariffs on $250 billion worth of Chinese imports three times in 2018. He added an extra 25% tariff on $200 billion worth of products in 2019. In retaliation, China imposed duties on $110 billion worth of American goods.1112
A trade agreement between the United States and China was announced by Trump in December 2019. As part of the agreement, China committed to purchasing an additional $200 billion worth of U.S. goods every year.13
The Federal Reserve calculated that the annual cost to consumers due to tariffs on Chinese goods was $831.14
In 2017, Trump withdrew the United States from the Trans-Pacific Partnership (TPP), citing concerns that it will compel American workers to compete with foreign workers earning lower wages and ultimately lead to the loss of American employment.15 The TPP, on the other hand, was established so that the United States could fortify its relationships with Asian nations that are having difficulty competing with China. Some worry that these countries may become more reliant on China and less on the United States if the TPP is not ratified, which would have a negative impact on American competitiveness.16
Improve America’s Against Mexico
Trump is working on a number of projects that would affect Mexico.
The North American Free Trade Agreement was successfully renegotiated by Trump in 2018. In the first few months of 2020, all three countries formally accepted the new deal, which is now known as the United States-Mexico-Canada Agreement (USMCA). It was intended to reverse the trend of U.S. manufacturing jobs being outsourced to other countries. The most notable shift is that automakers are now required to produce a greater proportion of their components within the NAFTA zone.17
By securing the954-mile border, Trump has pledged to reduce the influx of Mexican workers. More than 650 miles of wall were built thanks to legislative measures from the George W. Bush and Barack Obama administrations.18 Trump has added 371 more miles to the wall, with a 2020 completion date of 450 miles in mind.1920
About half of all illegal immigrants now entered the country legally but remain there after their visas or permits expired.21
Lower the Taxes Business and Investment
The corporate tax rate was reduced from 35% to 21% thanks to Trump’s Tax Cuts and Jobs Act.The lowest rate since 1939 was 2223.24
This shift, though, may not be as significant as it first appears. Most businesses make effective use of tax breaks.
The Congressional Budget Office concluded that reducing payroll taxes for businesses and increasing unemployment aid would be the most efficient approach.25 Small firms are the engine that drives the private sector, creating 65 percent of all new jobs.26
Put a Billion Dollars into Restoring America’s Infrastructure.
President Trump’s Rebuild America plan seeks to rebuild America’s crumbling roads, bridges, and airports in order to generate employment opportunities. The plan called for an investment of $1 trillion in infrastructure and detailed how $200 billion would be spent. It also claimed to have a two-year rather than a ten-year wait for permits.27 The plan fell through as it encountered difficulty after difficulty.
It is important to recognize that federal spending on infrastructure is one of the most effective ways to generate new employment opportunities.
According to research conducted by Duke University’s Center on Globalization, Governance, and Competitiveness, every $1 billion the federal government invests in infrastructure, it generates an additional 21,671 employment.28
Simplify the Rules
The EGRRCPA, which stands for the Economic Growth, Regulatory Relief, and Consumer Protection Act, relaxed rules on financial institutions with less than $100 billion in assets.
These banks were exempt from conducting stress tests before the relaxation of regulations to ensure they could survive a severe economic downturn. Banks with $50-$100 billion in assets no longer required to submit a “living will” to the Federal Reserve outlining how they would securely close their doors in the event of a financial crisis in order to avoid another Lehman Brothers-style bankruptcy.2930
Alternative Views on Trump’s Strategy
The epidemic wiped out the 6.6 million jobs that Trump’s expansionary fiscal policies had produced by early 2020.
The Medical Establishment of New England
The New England Journal of Medicine reported that the United States did not do sufficient testing or give enough protective equipment to healthcare personnel and the general population.
The administration was also accused for shifting responsibility for disease control to the states rather than implementing a coordinated national approach. Therefore, there was no uniformity in the social distance instructions given. As a result, several firms were forced to close, which contributed to a rise in the unemployment rate.31
Organization of American Manufacturers
U.S. manufacturing costs are much greater than those in other nations, and Trump’s plan was supported by the National Association of Manufacturers (NAM).32 Manufacturing companies pay roughly twice as much as companies in other industries, thus NAM urged Trump to further decrease regulations on manufacturing companies. American-made items will become more expensive as a result.33
NAM, on the other side, was against Trump’s protectionist policies. Even before the pandemic, American exports were down because other countries were raising tariffs in response. It slowed the economy and made imports more expensive for Americans.
The Federal Budget Responsibility Committee
The impact of tax cuts on stimulating economic growth is another topic of heated dispute amongst experts. Cutting taxes to stimulate the economy is often seen as a costly strategy. The judgment is still out on whether Trump’s 2017 tax cuts would eventually assist the economy, because historically, tax cuts haven’t produced enough new employment to support themselves.34
Questions and Answers (FAQs)
To what extent can the president affect the state of the economy?
Candidates for the presidency often make lofty economic pledges, but their actual impact is often limited. The president can have little to no influence over the economy, national and international events, and other variables that arise during their term in office. The budget, tariffs, Federal Reserve appointments, and Congressional sway of presidents are all ways they might affect the economy, although the effects of these measures are sometimes slow in coming.
How soon can the economy feel the effects of a new president?
During a president’s first year in office, he or she has less sway over the economy. A new president’s first budget, after being submitted to Congress in February, does not take effect until October of that year.35
How do chief executives make new employment opportunities available?
Although presidents cannot directly create new employment opportunities, they can work to have those in Congress and the Federal Reserve implement policies that do so. Reducing interest rates, increasing public works expenditure, expanding unemployment insurance, and reducing payroll taxes are all policies that can help stimulate the economy and create jobs.