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● Apocalypse-USA

Analysis of Trump Administration Policies on the U.S. Economic Crisis

[1] Trump’s Tariff Policies and Expanded Inflation

There is a great expectation within the U.S. that President Trump will revive the economy.
However, the continuous imposition of tariffs has led to the side effect of rising import prices.
The U.S. is already facing very high inflationary pressures, and additional tariffs are expected to further raise consumer prices.
As a result, self-employed individuals and small restaurants are experiencing increased burdens, leading to business deterioration and closures.
While this phenomenon may offer the expectation of increased tax revenue in the short term, it increases the risk of economic recession in the medium to long term.

[2] Egg Price Surge and Rising Raw Material Prices

The “eggflation” phenomenon is occurring in the U.S., with egg prices soaring due to avian influenza and supply shortages.
Eggs are an important ingredient in the American diet, so the soaring prices are leading to a general increase in prices.
Relatedly, the prices of other imported products are also rising, accelerating the contraction of consumption.

[3] Public and Private Sector Layoffs and Consumption Contraction

Layoffs are occurring in both the federal government and private companies, severely impacting the middle class in their 30s and 40s.
As layoffs proceed rapidly, the burden of mortgage repayments is also increasing, negatively impacting the housing market.
In addition, rising minimum wages and tip payment systems are further increasing restaurant operating costs, putting many restaurants at risk of closure.

[4] Instability in Financial and Real Estate Markets

While the benchmark interest rate remains relatively low, the actual market interest rates and mortgage rates are high, exceeding 7%, which is burdensome.
Commercial real estate is experiencing vacancy rates of 20-40%, causing building owners to struggle with loan interest burdens.
With commercial mortgage maturities totaling $2 trillion approaching next year, concerns are growing about refinancing risks and auction issues.

[5] Vicious Cycle of National Debt and Fiscal Deficit

The U.S. national debt is approaching $35 trillion, with over $1 trillion in interest payments annually.
The Trump administration is attempting to increase tax revenue through tariffs, but ultimately this may further exacerbate the fiscal and trade deficits.
While there may be a short-term effect of increased tax revenue, it could potentially threaten the credibility of the dollar as a key currency and act as a global economic instability factor in the long term.

[6] Conflict Between Politics and Economic Logic

President Trump, portraying himself as an economist, seeks to improve the structure of the U.S. economy through tariffs, layoffs, and budget cuts.
However, economic logic must be combined with political logic, and growing dissatisfaction among voters regarding short-term consumption and quality of life leads to political backlash.
Consequently, even if Trump’s economic policies show a short-term tax revenue increase, public dissatisfaction and political pressure are likely to continue.

[7] International Trade War and Manufacturing Reshoring Issues

The Trump administration aims to revive U.S. manufacturing by using tariffs as a weapon.
However, with low-cost countries such as China, India, and Vietnam maintaining lower manufacturing costs than the U.S., manufacturing reshoring within the U.S. appears difficult.
Moreover, as tariff impositions raise import prices, increasing the burden on U.S. consumers, the trade war could lead to a contraction in domestic consumption in the U.S.

[8] Linking Security Costs and Foreign Policy

President Trump is promoting the linkage of foreign and trade policies to secure domestic fiscal health and reduce security costs.
The U.S. is reorganizing its relationships with allies, focusing on securing bases for national interest protection.
However, this strategy may exacerbate domestic economic instability in the short term and carries the risk of undermining the status of the U.S. key currency in the long term.

[9] Future Outlook and Concerns About Economic Recession

Despite all economic indicators, the Trump administration’s tariff policies, budget cuts, and layoffs could trigger an economic recession.
Some argue for intentionally inducing a short-term recession to seek interest rate cuts, but politics are directly linked to short-term consumer sentiment and global economic confidence, posing a significant risk.
Amid such uncertainties, the U.S. economy is likely to experience a more prolonged recession and a period of structural transformation rather than expecting a V-shaped recovery.

< Summary >

The U.S. expects short-term tax revenue increases and manufacturing reshoring effects from the Trump administration’s hard-line tariff policies, budget cuts, and layoffs, but concerns about a medium- to long-term economic recession are growing due to various structural problems such as inflation, high interest rates, real estate instability, and worsening national debt.
The future of the U.S. economy is uncertain due to complex variables such as domestic consumption contraction, interest rate burdens, trade wars, and political backlash, and it is likely to have a significant impact on the global economy as a whole.

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