The U.S. economy could lose about $1 trillion by 2021 if Republican presidential nominee Donald Trump wins the general election and implements his economic plan, according to an analysis published Tuesday.
In the report, titled “Trump: the global fallout,” economic analysis and forecasting agency Oxford Economics examines the domestic and global impact of the reality television star’s key policies ― including more protectionist trade agreements, a series of tax cuts and reduced illegal immigration ― in the five-year period after he would take office.
The economic forecaster imagines in one model what would happen if a President Trump were forced to do any major negotiating with Congress, and determined that his plans would be “significantly diluted.” Adopting more of his proposed policies would have “more severe” results, according to the report.
“[S]hould Mr. Trump prove more successful in achieving adoption of his policies, the consequences could be far-reaching ― knocking 5% off the level of US GDP relative to baseline and undermining the anticipated recovery in global growth,” the report says.
Under its baseline scenario, which does not account for a Trump victory, Oxford Economics says it expects the U.S. gross domestic product to grow by about 2 percent over the next five years. But researchers say the GDP would fall to “a level around 5 percent below baseline” in that same period of time if Trump were able to substantively actualize his “America First” economic policies
The U.S. economy would slow in the near-term “against a backdrop of heightened uncertainty” if a limited version of Trump’s economic plans were to be implemented. In this case, GDP growth would ease to about 0.5 percent below baseline during 2017.
The global impact would be similar, the researchers found. In the scenario involving implementing Trump’s diluted policies, global growth goes down by up to one-quarter of a percentage point in 2017, researchers note. But in the adverse model involving implementing the more extreme version of Trump’s vision, the global economy is “badly shaken and growth remains subdued throughout much of the five-year forecast.”
An Oxford Economics report from August ― which examines what would happen if Democratic nominee Hillary Clinton’s fiscal, immigration reform and federal minimum wage policies were implemented ― imagines an entirely different economic future for the United States.
If fully implemented, Clinton’s proposals would provide “a much needed boost to the US economy,” the agency notes in the report it provided to The Huffington Post.
Researchers found that real GDP would grow in the near-term, rising 2.9 percent by 2017-18, from an estimated 2.3 percent in the baseline model.
“This would represent the strongest pace in more than a decade,” the report reads.
Real disposable income would be 0.4 percent higher than the forecaster’s baseline model and the economy would add about 500,000 jobs during a four-year Clinton term, according to the analysis.
The Trump campaign did not immediately respond to request for comment on the report’s findings.