Is Trump promising too much to the US economy?

What complicates it:

The debate has raised speculation about how aggressively Trump will decide, given the potential economic risks.

Analysts say tariffs are likely to lead to higher prices for Americans and pain for companies hit by foreigners.

And unlike Trump’s first term, any measure would come at a delicate time, as the long-running US economic expansion appears to be in its final stages.

Even if the toughest tariffs ever materialize, the policy debate alone is generating uncertainty that can depress investment and reduce growth in the US by as much as 0.6% by mid-2025, according to Oxford Economics.

“They have a limited margin for error,” Michael Cembalest, chairman of markets and investment strategy for JP Morgan Asset Management said in a recent podcast. He warned that the desire for a major overhaul would likely “break something”, though that remains to be seen.

Trade lawyer Everett Eissenstat, who served as a White House economic adviser during Trump’s first term, said he expected full tariffs, but acknowledged the plan would compete with other goals.

“There is always tension. There is never perfection in the world of politics. And obviously one of the reasons that I think he was re-elected is the concern over inflation,” he said.

“We are in a different world (from the first term) and we will have to see how it goes,” he said.