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“It’s the economy, stupid. ” This was the famous phrase coined by James Carville, Bill Clinton’s campaign advisor, during Clinton’s 1992 presidential bid for the White House. At the time, the United States was grappling with an economic recession, and President George H.

W. Bush struggled to understand the needs of ordinary Americans and how to appeal to them as he sought reelection for a second term. Carville identified this as the primary vulnerability to oust Bush from the White House.

focus relentlessly on the importance of the economy at every opportunity. The emphasis was on highlighting how Clinton’s proposed economic policies would directly benefit the American citizen’s pocket and improve their financial lives. Carville even went as far as hanging a sign in the campaign headquarters that read, “It’s the economy, stupid.

” This phrase became the campaign’s unofficial slogan. Clinton went on to win the election and was reelected for a second term in 1996. Since then, the phrase has become a key explanation for major shifts in American elections, serving as a secret code to understand the mindset of the American voter.

Economic sentiments always end up being the decisive factor. This strategy was similarly employed by Donald Trump in his campaign against Kamala Harris, enabling him to swiftly and surprisingly defeat her in a decisive blow, contrary to prior predictions. Leading up to the vote, most analyses suggested a tight race between Trump and Harris, predicting one of the closest elections in U.

S. history, with no clear frontrunner winning by a significant margin. It’s also worth noting that most of these polls were conducted by major American media outlets, many of which either supported the Democrats or opposed Trump in general.

In the end, Trump pulled it off and won by a significant margin over Harris. One of the key reasons for Trump’s reelection is the ever-reliable factor that dominates elections: the economy. Kamala Harris and the Democrats focused on macroeconomic indicators showing strong U.

S. economic growth, solidifying its position as the world's strongest economy, declining inflation rates, and consistent job creation. However, Americans didn’t feel these gains reflected in their personal financial situations.

Many voters blamed President Joe Biden and his Vice President Kamala Harris for failing to improve their financial well-being over the past four years. Numerous polls indicated that Americans held negative views of the economy. The bottom line is: even if macroeconomic data highlights the greatness of the American economy, as an ordinary citizen, I’m paying a premium for my morning coffee, spending a third of my income on rent, unable to afford a home, and seeing the prices of basic necessities continue to rise.

To hell with the data. I’m going to side with the person who promises me tangible improvements, like affordable housing and reduced personal debt. That’s precisely the narrative Trump delivered to the average voter, and it resonated deeply, securing their support.

Of course, Trump’s return has shaken the world. There’s a palpable sense of anticipation from most countries about what the world’s leading policy maker—the U. S.

president—plans to do next. In today’s highly significant episode, we’ll delve into the economic agenda of returning President Donald Trump. What are the plans he intends to implement in the next four years?

Is he really going to shake things up as dramatically as many anticipate? And how will his agenda impact both the U. S.

and global economies? This is a must-watch episode. Stay tuned until the end.

Let’s get started. I’m Ashraf Ibrahim and this is The Economic Informant… I’d like to thank Exness for sponsoring this episode and supporting our program. Exness is a leading CFD trading company with over 15 years of experience, trusted by a million clients to trade stocks, metals, energy, and indices.

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Signing up with Exness is quick and easy. Click the link, select your country, enter your email and password, and check the box confirming you’re not a U. S.

citizen. That’s it—you’re ready to start trading right away! After Donald Trump’s victory in the U.

S. elections and the early announcement of the results on Wednesday, November 6, which defied expectations, U. S.

stocks surged and continued their upward trend into Thursday. The major indices—Dow Jones Industrial Average, S&P 500, and Nasdaq Composite—all reached record highs. Meanwhile, the U.

S. dollar hit its highest level in four months against a wide range of other currencies. Why did Trump’s win specifically drive the stock market and the dollar to such heights?

One of Trump’s most notable achievements during his first term was the *Tax Cuts and Jobs Act* of 2017. This law is set to expire at the end of next year, in 2025. Trump now plans to reinstate all the tax cuts included in this legislation.

To appeal to low-wage workers in industries like restaurants, as well as senior citizens a significant voting bloc—he has proposed eliminating taxes on tips, Social Security benefits, and overtime wages, along with introducing deductions for certain other income taxes. For businesses, Trump aims to reduce the corporate tax rate from 21% to just 15%, arguing that such a cut will stimulate economic growth and create more job opportunities. On the other hand, it’s expected that these sweeping tax cuts will add approximately $5.

8 trillion to the U. S. national debt over the next decade.

This raises an important question that Trump’s campaign hasn’t answered clearly or in detail: how exactly will these trillions of dollars, which will burden the U. S. Treasury, be covered?

Trump’s idea is simple: he aims to replace federal income tax revenue with extreme tariff revenues as part of his economic plan. This brings us to his second major economic policy proposal. Remember the trade war between the United States and China during Trump’s first term in 2017 and 2018?

That trade war will look like child’s play compared to what Trump plans to do in international trade between the U. S. and the rest of the world.

To start, Trump has pledged that if reelected, he will impose a blanket tariff of 10% to 20% on all imports into the United States from anywhere in the world. This means that any product or service exported to the U. S.

will face tariffs of 10% to 20%. That’s just the beginning. As for China, tariffs will exceed 60% on all Chinese imports.

Unlike before, when Trump selectively targeted certain Chinese goods, he now plans to impose tariffs on all Chinese products entering the U. S. , with rates that are significantly higher.

Trump has also promised to target specific industries with exorbitant tariffs. For example, car manufacturers that use factories in Mexico to produce vehicles for sale in the U. S.

could face tariffs as high as 200%, as would other products manufactured in Mexico specifically for the U. S. market.

In this approach, Trump isn’t differentiating between U. S. adversaries like China and allies such as Canada or the European Union.

Everyone will be affected, albeit in turn. To this end, he has also pledged to renegotiate the USMCA trade agreement his administration struck with Mexico and Canada. Trump's idea is that these substantial tariffs will bolster the U.

S. manufacturing sector and encourage the relocation of production facilities to the United States. This, in turn, will create new jobs, generate billions of dollars for the American economy, and help cover the costs of the proposed tax cuts.

However, on the other hand, numerous studies have shown that the cost of the tariffs Trump imposed in 2018 was almost entirely borne by American consumers and businesses. The concept is straightforward: the cost of tariffs is ultimately passed on to the American consumer, either through higher prices for goods that make it into the market or through the absence of certain imported products altogether. When certain imported goods are no longer available, American companies may attempt to offer substitutes.

However, these substitutes are usually priced only slightly lower than the tariffed products, as this is how markets typically function. In essence, companies won’t pass up the opportunity to maximize their profits just to align with Trump’s policies. As the popular business phrase goes, "Don’t leave money on the table.

" Businesses will seize any opportunity to secure profits easily within reach. The overall result of these policies, as many economists predict, will be a rise in U. S.

inflation rates. In mid-October, The Wall Street Journal surveyed 50 economists about the impact of Trump’s and his competitor Harris’s economic policies on inflation in the United States. A striking 68% of them stated that inflation, rising interest rates, and deficits would be higher under Trump’s policies compared to Kamala Harris’s.

The economists emphasized that prices would increase more rapidly during Trump’s term due to his tariff plans. These aren’t the only economists concerned about the potential for the U. S.

economy to spiral into inflation under Trump’s economic policies. Pay close attention to what comes next. Last June, 16 Nobel Prize-winning economists signed a joint letter that served as a wake-up call.

Among them were prominent figures like the renowned Joseph Stiglitz, Robert J. Shiller—famous for his mid-2000s warning about a housing bubble that materialized in 2008—Paul Romer, the former Chief Economist at the World Bank, and George Akerlof, a noted economist who is also the husband of U. S.

Treasury Secretary Janet Yellen. These 16 esteemed economists raised serious concerns, stating that Trump’s economic agenda could ignite inflation in the United States. They argued that Trump’s proposals would not only fail to address inflation but would significantly worsen the situation.

They warned that the election outcome would have long-lasting economic repercussions for the U. S. , potentially impacting its economy for years or even decades.

They also highlighted that Trump’s reelection would damage America’s global economic standing and destabilize the domestic economy. What do you think Trump’s response was to this statement from the group of economists? Pay close attention, because the theme we discussed at the start of the episode becomes clear in these reactions.

Karoline Leavitt, the press secretary for Trump’s campaign, responded in a statement sent to U. S. media outlets, saying that the American people don’t need “out-of-touch, worthless Nobel Prize winners” to tell them which president put more money in their pockets.

Leavitt emphasized that Americans know they can’t endure another four years of Biden’s economic policies. She added that when Trump returns to the White House, he will reinstate his agenda to boost growth, lower energy prices, create jobs, reduce living costs, and improve the quality of life for all Americans. She also highlighted that Trump’s proposed tax cuts, extreme tariffs, and other measures would accelerate the economy at a time when the Federal Reserve is trying to slow inflation.

The Fed had just started reversing its monetary policy, reducing interest rates by half a percentage point in September, and again in November by a smaller margin of 0. 25%. This sets the stage for renewed clashes between two figures who notoriously don’t see eye to eye: Trump, returning to the White House, and Jerome Powell, Chair of the Federal Reserve.

Those familiar with their history will recall their strained relationship, with Trump frequently clashing with Powell in attempts to influence the Fed’s decisions violating long standing American norms of central bank independence from the executive branch. In fact, the skirmishes have already begun. Let’s take a moment to reflect.

Trump has made it clear on several occasions that he wants some degree of control over monetary policy. He’s openly stated his intention to exert direct influence on Federal Reserve decisions regarding interest rates. So, what’s the problem here?

Why is this a concern? What’s the issue with a president or government intervening in central bank policy? The problem is that a president—Trump or anyone else —might pressure the central bank to keep interest rates artificially low to stimulate the economy, even when inflation necessitates rate hikes.

If interest rates aren’t raised as needed, the result could be a sharp rise in inflation, with the situation spiraling out of control. According to research conducted by the Peterson Institute for International Economics last September, the erosion of the Federal Reserve’s independence could lead to higher inflation rates, capital outflows from the U. S.

, significant devaluation of the U. S. dollar, and increased unemployment.

All of this would result in a severe decline in American living standards. Professor Warwick McKibbin, an economist at the Australian National University and a non-resident Senior Fellow at the Peterson Institute, noted that countries with independent central banks tend to have lower inflation rates. He cited the example of Argentina’s central bank, which has long suffered from political interference and now holds the unenviable title of having the highest inflation rate in the world.

Trump's previous economic policies aren’t the only factors that could drive up U. S. inflation, which inevitably impacts global economies—particularly developing and emerging markets as a result of rising U.

S. interest rates and their subsequent worldwide effects, which we’ve discussed in detail in earlier episodes. Beyond this, Trump plans to implement another extreme policy with potentially devastating consequences.

Trump, along with his running mate J. D. Vance, has promised to carry out the largest deportation program in U.

S. history. They aim to deport between 15 and 20 million undocumented individuals from U.

S. soil a massive plan targeting millions of undocumented workers. Trump and his vice president believe that these immigrants are “killing jobs,” driving up rents by competing with Americans for housing, and increasing crime rates.

However, such deportations would be catastrophic for the U. S. economy.

These millions of workers, who take on low-wage, hard-labor jobs and endure harsh living conditions, play a crucial role in the economy. Removing them would drive up wages, which in turn would increase consumer prices. Many industries and sectors rely heavily on immigrant labor.

For example, approximately 16% of workers in the agriculture sector are undocumented. Removing this workforce would create labor shortages, driving up costs rather than reducing them, and causing significant disruptions to the supply chain, leading to higher food prices. The housing sector, which is already grappling with a severe housing shortage, also depends on undocumented workers, particularly in home construction.

Removing these workers would disrupt the construction industry and raise the costs of building new homes. In fact, the rise in immigration over the past two years has been one of the main factors behind the recent decline in U. S.

inflation. Immigration addressed supply issues in the economy, improving supply chains and increasing the labor force, which helped balance supply and demand after the inflationary spikes of two years ago. Mass deportations, however, would create new shocks and drive inflation upward again.

According to an analysis by the American Immigration Council deporting 11 million people would cost the U. S. economy $315 billion.

Moreover, millions of immigrant workers currently contribute to Social Security. Their sudden removal would disrupt funding for the program. The Committee for a Responsible Federal Budget estimates that Trump’s plans for mass deportations, tariffs, and tax cuts would bankrupt Social Security trust funds within six years of his return to office, leading to a nearly 30% reduction in benefits for current recipients.

This would be a direct consequence of the reduced revenue flowing into the Social Security system. In conclusion, these are some key features of Trump’s economic plans, which will not only affect the U. S.

economy but also economies worldwide, including those in the Arab region. In upcoming episodes, we’ll explore in greater detail how Trump’s policies could impact Arab economies and individuals, and how we can prepare for the upheavals expected over the next four years. Let me know in the comments if you’d like to see one or two episodes on this topic.

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Finally, do you think Trump’s economic policies could lead to a financial market collapse similar to the 2008 global financial crisis? I’ll be following your responses in the comments. For anyone interested in investing in stocks or gold, check out Exness you’ll find the link below the video.

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