Despite President Donald Trump’s claims last week that the U.S. economy is “doing better than ever”, the overwhelming majority of business economists believe Trump’s trade policies are having negative impacts on the economy, and that gains from the president’s tax cuts will be short lived.
The National Association for Business Economics survey showed 91 percent of respondents said current tariffs and threats of more to come were having “unfavorable consequential impacts” on the U.S. economy, according to a report released Monday. About two-thirds saw negative effects if the U.S. withdrawsfrom the North American Free Trade Agreement with Mexico and Canada.
In the wake of large tax cuts enacted in late 2017, the share of those saying fiscal policy is too stimulative rose to 71 percent from 52 percent in February, according to the responses of 251 members collected from July 19 to Aug. 2. And 81 percent said the federal deficit’s share of gross domestic product should be reduced.
“In general, the panel expects the federal deficit, as a percentage of the economy, to grow in the longer term, with eight out of 10 panelists indicating that fiscal policy should help shrink the deficit as a share of the economy,” said survey chair Jim Diffley, an economist at IHS Markit Ltd.
While nearly two-thirds of the economists see the corporate tax system as more fair and efficient after Trump’s tax reform package passed last year, less than a third said the same of changes to the personal income tax system — 54 percent believe it’s in worse shape now than before.
When it comes to the Federal Reserve’s monetary policy, 76 percent said they believe the Fed is right on track, which Bloomberg notes is the the most in the semiannual survey in more than 11 years.
Other survey results include:
Other findings included:
•60 percent said economic policy should do more to mitigate climate change
•74 percent said economic policy should do more to alleviate income inequality
•63 percent saw less than a 25 percent chance of a meaningful infrastructure package in 2019
•45 percent said the Trump administration’s deregulation drive has positively affected the economy so far, while 35 percent saw it as a near-term plus that turns negative in the long run