The CBO says economic growth is smaller than possible because Trump’s tariffs are hurting business investment by creating uncertainty.
he CBO also says that the tariffs imposed under Trump since January 2018 are expected to make U.S. GDP roughly 0.3% smaller than it otherwise would have been.
“Trade policies” are weighing on economic activity, “particularly business investment,” the CBO said.
The slowdown in growth in 2019 largely stems from slower growth in business investment, according to the report.
Tariffs affect business investment “by increasing business’ uncertainty about future barriers to trade and thus their perceptions of risks associated with investment in the United States and abroad,” the CBO said.
Trump promised to shrink the deficit and have record-setting growth when he ran for president, but the CBO is projecting an exploding deficit and below-average growth of 1.8% after 2019. A big reason why growth is expected to drop off is the aging US workforce which will be heading into retirement over the next decade. At a time when the president should be encouraging immigration, he is making the looming problem worse by deport needed immigrant workers of the country while preventing new workers from arriving.
The US had the opportunity to set the country up for an unprecedented modern period of fiscal responsibility and growth, but Trump has blown all of that up and is going to leave behind a dire situation for the next president, and generation of Americans to wrestle with.
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