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OUR ECONOMY & Agenda 47
In comparing and contrasting Donald Trump's first term with his potential second-term agenda (Agenda 47), several themes emerge, particularly around job creation, tax policy, trade, deregulation, and inflation. Both terms are driven by the same foundational principles, but the second term would build on the lessons and successes from his first while adapting to the current economic challenges, particularly inflation and global competition.
Job Creation and Economic Growth
First Term: Trump’s first term saw significant economic growth, driven by tax cuts, deregulation, and pro-business policies. The U.S. economy enjoyed historically low unemployment rates, including record-low unemployment for African Americans, Hispanics, and women. Key initiatives like the 2017 Tax Cuts and Jobs Act (TCJA) provided businesses with lower tax rates, incentivizing investments, expansion, and job creation. The deregulation of industries, particularly energy, contributed to job growth and economic expansion.
Second Term (Agenda 47): In a second term, Trump's job creation strategy would likely focus more on reshoring manufacturing jobs, particularly through tax incentives and protective trade policies, building on his "America First" philosophy. While the first term focused on broad economic expansion, the second term may concentrate on specific sectors like manufacturing, energy, and technology, with a more aggressive approach to reshoring production and bolstering supply chain security.
Tax Policy
First Term: The 2017 Tax Cuts and Jobs Act was a centerpiece of Trump’s economic success, lowering the corporate tax rate from 35% to 21% and offering tax relief to many middle-class families. This tax cut was designed to stimulate business investment, and to some extent, it succeeded in spurring job growth, wage increases, and stock market gains.
Second Term (Agenda 47): In his second term, Trump would likely seek to extend and deepen tax reforms. Agenda 47 would build on the TCJA by further simplifying the tax code and providing additional tax incentives to businesses that invest in American workers and production. Trump may also look to expand Opportunity Zones to further stimulate investment in economically distressed communities. A second term could see efforts to further cut taxes, especially to counteract the inflationary pressures and rising costs that have emerged since his first term ended.
Trade Policy and Global Competitiveness
First Term: Trump's trade policies in his first term were characterized by a strong protectionist approach, particularly toward China. His administration-imposed tariffs on $360 billion worth of Chinese goods, aimed at addressing trade imbalances and protecting American industries. Trump also renegotiated NAFTA into the USMCA, which was designed to offer more protections for American workers, particularly in manufacturing and agriculture.
Second Term (Agenda 47): Trump’s second term would likely see a continuation and intensification of his protectionist trade policies. Agenda 47 would focus on leveraging tariffs and renegotiating existing trade agreements to prioritize American jobs and industries. Trump's approach to trade may also broaden to address global supply chain vulnerabilities exposed during the pandemic, particularly by encouraging U.S. companies to bring production back home through more aggressive incentives and penalties for outsourcing. In contrast to the first term, a second term could see a stronger push to disengage from reliance on foreign manufacturing, particularly in critical industries like technology, medicine, and defense.
Deregulation
First Term: Trump's first term included one of the most significant deregulatory efforts in modern U.S. history. His administration rolled back regulations across sectors, particularly in energy, finance, and the environment. Trump aimed to reduce the cost of compliance for businesses and encourage investment, arguing that excessive regulations stifled growth. His approach led to a boom in U.S. oil and gas production, which supported job growth in the energy sector.
Second Term (Agenda 47): In a second term, Trump would likely continue this aggressive deregulation strategy, with even greater emphasis on energy independence and resource development. This would include expanding oil and gas production, mining for rare earth minerals, and reducing environmental regulations that he argues hold back economic growth. Trump's second term would aim to sustain the business-friendly environment of his first, but with a focus on strategically vital industries that enhance U.S. competitiveness and national security, like energy and technology.
Inflation and Economic Challenges
First Term: Inflation was not a major concern during Trump’s first term, as the U.S. economy experienced low inflation and strong growth. This period saw rising wages, particularly at the lower end of the wage scale, in part due to tight labor markets and tax cuts that stimulated business growth. However, the onset of the COVID-19 pandemic in 2020 triggered significant economic disruptions, including unemployment spikes and unprecedented government stimulus spending to counteract the effects.
Second Term (Agenda 47): Inflation has become a critical issue since Trump left office, with rising prices for goods, housing, and energy. In a second term, Trump would face a more inflationary environment than in his first, which would require a different approach. Agenda 47 suggests that Trump would combat inflation through policies aimed at lowering energy prices, increasing domestic production, and reducing government spending. A key difference would be a potential tightening of fiscal policy and a push to reign in expansive government spending programs that Trump argues contribute to inflationary pressures. His focus on energy independence could also help lower energy costs, a significant driver of inflation.
Energy Independence
First Term: Trump’s first term saw a massive expansion of U.S. energy production, making the U.S. a net exporter of energy for the first time in decades. His administration rolled back numerous environmental regulations to facilitate oil, gas, and coal production. Trump argued that energy independence was not only good for the economy but also for national security.
Second Term (Agenda 47): Trump's second-term energy strategy under Agenda 47 would likely be even more aggressive, focusing on achieving complete energy independence by fully unleashing U.S. fossil fuel production. He has made it clear that energy independence is central to his economic strategy, and in a second term, we could expect more expansion of drilling and mining, as well as incentives for domestic energy infrastructure projects. While renewable energy might receive some support, Trump's primary emphasis would remain on oil, gas, and coal, which he views as the bedrock of American energy security.
Conclusion: Continuity and Evolution
In summary, while the key pillars of Trump’s economic agenda—tax cuts, deregulation, trade protectionism, and energy independence—remain consistent between his first and second terms, Agenda 47 would be an evolution of these policies, tailored to the new economic landscape. Trump's second term would likely seek to address emerging challenges like inflation and global competition with a sharper focus on reshoring jobs, strengthening the supply chain, and reducing dependency on foreign resources. In many ways, Agenda 47 represents a deepening of Trump’s first-term priorities, with a stronger emphasis on national security, technological leadership, and energy independence to ensure that America remains economically dominant in an increasingly competitive world.
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Yours in Service,
Dr. James M. Copas Chairman & CEO, American Republic Policy
(Just standing in for Dr R. Morris Owens, who needed a break)
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