Imagine eight years of a Trump presidency and guess what the economic future based on his barely a year’s stay in the White House will be. The thought alone can bring the number of people with depressive disorders to an unprecedented high. Companies will start looking elsewhere outside the US to relocate. The rich states will consider secession and a second civil war will be in the offing.
For those who don’t know if President Trump is running for a second term, it’s because his filing for campaign was overshadowed by his inauguration, both of which occurred on the same day, January 20. And his visits to the different states, his rallies, speeches and fundraising are actually election campaigns for 2020, with his own companies making money out of them.
Factors like the default effect and incumbent advantage give Trump the edge. This early, there are no scientific surveys or psychic divinations that have made predictions on his chances of winning. Assuming that the current resident of the White House gets another four years after 2020, what will happen to the economy of the most powerful country on earth?
The United States has the biggest economy in the world, with China a close second. Some skeptics say China’s goal to overtake the US is too ambitious, but research show that it could happen by 2029. The US dollar is the standard by which all other currency are measured, and the US economy is the basis of the international financial system. All that could change in the next eight years.
When Trump took office, the first actions he did were to get out of the Paris Agreement on climate change and quit the Trans Pacific Partnership deal. How do these presidential withdrawals pull the US down from being an economic leader to an ignominious and minor-league player in global affairs?
On the Paris Climate Agreement
Leaving the Paris agreement dealt a huge blow to the rest of the 194 countries that signed on to the landmark pact. The US is the world’s second biggest source of pollution and withdrawing from the agreement means that more than 20 percent of the projected reduced emissions by 2030 will not happen. It might also make smaller countries less serious about its commitment to the pact.
The economic gains of not having to adhere to the climate change regulations are short-term. The US won’t have to pay the remaining fee of $2 billion (during Obama’s term, $1 billion was paid); more jobs for the coal companies will open; and people won’t have to pay higher taxes to finance reduced-emissions regulation policies.
But far into the future, the economy will suffer. For one, the expected job openings for coal companies is not as massive as the Republicans portray it to be. Several energy companies are turning to natural gas, and solar and wind for sources of power. Together they employ about 4.5 million people. The industry is driven to natural sources because of the lower manufacturing and installation costs. They will be creating more jobs than coal plants. But businesses look at the political climate and a pro-coal president who is perceived as not too supportive of the solar- and wind-powered companies does not augur well for an auspicious start.
Denying the truth that is climate change can unleash hurricanes, melt glaciers that cause the sea to rise to destructive levels, and bring about intense heat waves that create wildfires and droughts. These are the disasters that have occurred due to excessive greenhouse gas in the environment and more will be coming. They have brought death, diseases and injuries to people, destroyed businesses, houses and crops, and the government has to fund rehabilitation, public health, safety and security measures to get communities, towns and cities back on the ground.
The Paris Agreement is meant to regulate activities so that CO2 levels will be contained. If President Trump cannot comprehend the necessity for climate change, the economy will suffer. GDP growth will be negative, people will have less disposable income, and more individuals and families will be on welfare.
On the TPP
President Trump withdrew the United States from the Trans Pacific Partnership on the third day after his inauguration because he feels it is disadvantageous to the United States. He believes that removing the country from the trade deal will create more jobs for Americans, eliminate unfair (to the US) trade practices and generally increase America’s wealth.
The TPP, negotiated by Obama, is a trade agreement that the US and 11 other countries have signed on to, to reduce tariffs for imports and exports, and protect US industries on labor, environment and intellectual property matters. But more than the economic aspect, it would have strengthened its influence in the Asia Pacific region, which is being threatened by China’s growing popularity.
Withdrawing from the TPP takes away from the US its leadership role in shaping the global trade infrastructure. It removes the nation from the negotiating table of trade with the other member nations and isolates it from multilateral trade deals.
The benefits it could have gotten will go to China, since the East Asian giant is poised to offer its own multilateral agreements and the signatories to the TPP that were left high and dry by the withdrawal of the US will join. The world and especially Asia will begin to doubt America’s commitment to help them and look to China for support.
China has formed its Regional Comprehensive Economic Partnership (RCEP), a rival to the TPP, and the 16 member countries have started negotiations after Trump quit the TPP. The consequence of a successful RCEP will be the challenge that US industries will have to overcome to compete in the global market.
Four years of a Trump presidency will do considerable damage to the US economy, some as yet unfelt. Come 2020, voters should have realized that another four years of Trump will relegate the country to a mere continent doomed to poverty, sickness, violence, and fights for survival.