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Economic policy of the second Trump administration
Under the second presidency of Donald Trump, the federal government of the United States has pursued an economic policy focused on lower taxation, deregulation, and large-scale protective tariffs. Trump nominated Howard Lutnick as the United States Secretary of Commerce, Scott Bessent as the United States Secretary of the Treasury, and Russell Vought as the director of the Office of Management and Budget (OMB), all of whom were confirmed by the U.S. Senate. When Donald Trump took office as president in January 2025, the economy of the United States had increasing economic growth, low unemployment, and declining inflation in the aftermath of the 2021–2023 inflation surge.
To cut the United States's federal budget, Trump established the Department of Government Efficiency (DOGE), led by Elon Musk. DOGE employees have vastly cut spending at various federal agencies, and have attempted to dismantle nearly all of the functions of the United States Agency for International Development and the Consumer Financial Protection Bureau. Though Musk set the initial goal of US$2 trillion in savings for DOGE, he later revised it to $150 billion. By April 2025, he said DOGE had saved over $160 billion, though the costs of the mass layoffs of government employees and other methods offset much of its savings. In January 2025, the OMB briefly issued a pause to all grants and loans from the federal government.
Much of Trump's domestic economic agenda has centered around the extension of the Tax Cuts and Jobs Act of 2017, which was passed during his first presidential term. Trump has also pledged to remove taxes on tips, overtime pay, and Social Security benefits, though all of his proposals face resistance from Congress, which the tax cuts likely to increase the U.S. national debt by trillions of dollars if not offset by politically unpopular cuts to spending. He sought greater government control over private businesses, abandoning traditional conservative free market orthodoxy in favor of state capitalism by taking direct government equity stakes in major US corporations. Trump also imposed steep protectionist tariffs against nearly every country in an effort to correct U.S. trade deficits and promote manufacturing in the U.S., significantly escalating the China–U.S. trade war and beginning a trade war with Canada and Mexico. The reaction to Trump's tariffs, including his April 2025 decision to impose a universal 10 percent tariff on nearly all countries and higher rates on many other countries, led to a stock market crash.
Donald Trump, previously the president of the United States from 2017 to 2021, campaigned in 2024 on the promise of an economic nationalist system characterized by protective tariffs, lower taxation, and reduced regulations, where income tax would be largely or completely replaced by tariffs on other countries to defend local manufacturing. In his first presidency, Trump had also focused on protectionism. In 2024, he vowed to enact even higher tariffs than those imposed in his first term, including a universal baseline tariff of 10 to 20 percent, and high tariffs on China, Mexico, and all cars imported to the United States. He proposed a four-year transition away from essential goods imported from China and sought to transform the U.S. into a self-sufficient economy. Trump pledged to extend and expand the 2017 tax cuts passed during his first term, and promised to remove taxes on tips, overtime, and Social Security benefits. Trump also pledged to devalue the U.S. dollar to cheapen American exports.
Trump campaigned against the 2021–2023 inflation surge that followed the COVID-19 pandemic in the United States, for which he blamed his successor, President Joe Biden. Trump's victory in the 2024 U.S. presidential election was attributed in part to voters' dissatisfaction with the Biden administration's handling of inflation. Many economists criticized the Trump campaign's economic agenda for potentially leading to an increase in inflation and the addition of around US$15 trillion to the United States's national debt. Ahead of Trump's inauguration on January 20, 2025, the economy of the United States had increasing economic growth, low unemployment, and declining inflation by statistics.
In November 2024, as president-elect, Trump nominated several officials to serve in his cabinet during his second presidency. He nominated Howard Lutnick as the United States Secretary of Commerce, Scott Bessent as the United States Secretary of the Treasury, and Russell Vought as the director of the Office of Management and Budget (OMB).
On January 16, 2025, Bessent appeared before the Senate Committee on Finance and defended Trump's tariff strategy and said he favored extensions on tax cuts and harsher economic policies against China and Russia. The U.S. Senate voted 68–29 to confirm Bessent as treasury secretary on January 27. The Senate Committee on the Budget approved Vought's nomination on January 30 in an 11–0 vote that was boycotted by all nine Democratic Party members and the one independent on the committee. The full Senate voted 53–47 on February 6 to confirm him as the OMB director. On February 18, the Senate voted 51–45 to confirm Lutnick as the commerce secretary, and he was sworn in to the role three days later, on February 21.
Trump has worked to oust Erika McEntarfer and Lisa Cook.
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Economic policy of the second Trump administration
Under the second presidency of Donald Trump, the federal government of the United States has pursued an economic policy focused on lower taxation, deregulation, and large-scale protective tariffs. Trump nominated Howard Lutnick as the United States Secretary of Commerce, Scott Bessent as the United States Secretary of the Treasury, and Russell Vought as the director of the Office of Management and Budget (OMB), all of whom were confirmed by the U.S. Senate. When Donald Trump took office as president in January 2025, the economy of the United States had increasing economic growth, low unemployment, and declining inflation in the aftermath of the 2021–2023 inflation surge.
To cut the United States's federal budget, Trump established the Department of Government Efficiency (DOGE), led by Elon Musk. DOGE employees have vastly cut spending at various federal agencies, and have attempted to dismantle nearly all of the functions of the United States Agency for International Development and the Consumer Financial Protection Bureau. Though Musk set the initial goal of US$2 trillion in savings for DOGE, he later revised it to $150 billion. By April 2025, he said DOGE had saved over $160 billion, though the costs of the mass layoffs of government employees and other methods offset much of its savings. In January 2025, the OMB briefly issued a pause to all grants and loans from the federal government.
Much of Trump's domestic economic agenda has centered around the extension of the Tax Cuts and Jobs Act of 2017, which was passed during his first presidential term. Trump has also pledged to remove taxes on tips, overtime pay, and Social Security benefits, though all of his proposals face resistance from Congress, which the tax cuts likely to increase the U.S. national debt by trillions of dollars if not offset by politically unpopular cuts to spending. He sought greater government control over private businesses, abandoning traditional conservative free market orthodoxy in favor of state capitalism by taking direct government equity stakes in major US corporations. Trump also imposed steep protectionist tariffs against nearly every country in an effort to correct U.S. trade deficits and promote manufacturing in the U.S., significantly escalating the China–U.S. trade war and beginning a trade war with Canada and Mexico. The reaction to Trump's tariffs, including his April 2025 decision to impose a universal 10 percent tariff on nearly all countries and higher rates on many other countries, led to a stock market crash.
Donald Trump, previously the president of the United States from 2017 to 2021, campaigned in 2024 on the promise of an economic nationalist system characterized by protective tariffs, lower taxation, and reduced regulations, where income tax would be largely or completely replaced by tariffs on other countries to defend local manufacturing. In his first presidency, Trump had also focused on protectionism. In 2024, he vowed to enact even higher tariffs than those imposed in his first term, including a universal baseline tariff of 10 to 20 percent, and high tariffs on China, Mexico, and all cars imported to the United States. He proposed a four-year transition away from essential goods imported from China and sought to transform the U.S. into a self-sufficient economy. Trump pledged to extend and expand the 2017 tax cuts passed during his first term, and promised to remove taxes on tips, overtime, and Social Security benefits. Trump also pledged to devalue the U.S. dollar to cheapen American exports.
Trump campaigned against the 2021–2023 inflation surge that followed the COVID-19 pandemic in the United States, for which he blamed his successor, President Joe Biden. Trump's victory in the 2024 U.S. presidential election was attributed in part to voters' dissatisfaction with the Biden administration's handling of inflation. Many economists criticized the Trump campaign's economic agenda for potentially leading to an increase in inflation and the addition of around US$15 trillion to the United States's national debt. Ahead of Trump's inauguration on January 20, 2025, the economy of the United States had increasing economic growth, low unemployment, and declining inflation by statistics.
In November 2024, as president-elect, Trump nominated several officials to serve in his cabinet during his second presidency. He nominated Howard Lutnick as the United States Secretary of Commerce, Scott Bessent as the United States Secretary of the Treasury, and Russell Vought as the director of the Office of Management and Budget (OMB).
On January 16, 2025, Bessent appeared before the Senate Committee on Finance and defended Trump's tariff strategy and said he favored extensions on tax cuts and harsher economic policies against China and Russia. The U.S. Senate voted 68–29 to confirm Bessent as treasury secretary on January 27. The Senate Committee on the Budget approved Vought's nomination on January 30 in an 11–0 vote that was boycotted by all nine Democratic Party members and the one independent on the committee. The full Senate voted 53–47 on February 6 to confirm him as the OMB director. On February 18, the Senate voted 51–45 to confirm Lutnick as the commerce secretary, and he was sworn in to the role three days later, on February 21.
Trump has worked to oust Erika McEntarfer and Lisa Cook.