Trump could provide boost for economy, but trade wars could be a threat – survey

by Ryan Smith15 Nov 2016
Economists are predicting a Trump presidency could give the economy a jolt – but will also increase the risks of international trade wars, according to a Wall Street Journal report.

The Journal surveyed economists about their predictions for a Trump economy. One thing they agreed upon – there would be a change in the current pace of economic growth.

A Trump Administration could “knock the U.S. economy out of its low-altitude, low-growth orbit,” Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida, told the Journal. The question, Snaith said, is, “Will it put the economy in a higher growth orbit, or will it knock us down into the atmosphere and a fiery re-entry?”

On the whole, however, economists predicted growth under Trump. According to the Journal, economists said the economy could expand 2.2% in 2017 and 2.3% in 2018.

But many experts still had concerns – the biggest being the potential for a trade war. Forty-three percent of economists surveyed by the Journal cited the possibility of a trade war as the biggest risk to the economy under a Trump presidency. Were the US to impose tariffs on foreign products, it could spark a cascade of rising trade barriers and a shrinking foreign market for US goods, the Journal reported.

“Everyone will lose if there is a global trade war,” Jim O’Sullivan, chief US economist at High Frequency Economics, told the Journal.