For those unaware, President-elect Donald Trump has a 100-day plan to blitz Congress with new legislation meant to turbocharge the economy after he takes office. Some elements of the plan—tougher trade deals, a crackdown on undocumented workers, tax cuts that would inflate the national debt—have spooked economists who think it could trigger a recession.
But Trump’s economic policies could be gentler in practice than they sounded on the campaign trail, according to a senior Trump adviser who helped draft them. “I don’t think [people]should be worried about any of it,” private-equity baron Wilbur Ross tells Yahoo Finance in the video above. “It’s an expansionary policy. He’s using fiscal measures to stimulate the economy.”
One of the biggest concerns about a Trump administration is new trade policies that could trigger escalating tariff wars, rising prices and falling corporate profits. “There aren’t going to be trade wars,” Ross insists. “We’re mostly going to do it by figuring out what things [trading partners]now import from somewhere else that they could just as well import from us.”
For Mexico, that might be auto parts or other components that go into goods manufactured there. China imports a lot of natural gas from countries other than the United States. Since that’s something the US produces in abundance, the Trump administration could insist that China buys more American gas in exchange for the continued import of Chinese goods. Under this more benign approach, tariffs would only be a last resort, if trading partners refuse to make concessions that improve American trade deficits.
Trump would also slash taxes on both individuals and businesses, a heavy political lift that nonetheless seems possible given that both houses of Congress will be controlled by his fellow Republicans. Some analysts think corporate tax reform would be easier, and ought to go first. But Ross says a single, comprehensive tax-reform bill “would be the more sensible thing because it’s meant to be an integrated package.” Trump also seems willing to adopt part or all of a tax-cut plan proposed by House Speaker Paul Ryan.
“Repealing Obamacare shouldn’t be too hard with this Congress,” Ross says, although “there will be some to-ing and fro-ing over what to replace it with.” Trump’s big infrastructure plan, “which would require little or no federal money, might help pull millions of Americans who aren’t working back into the labor force. And Trump isn’t against immigration, Ross explains—he’s only against illegal immigration. When described by somebody other than Trump, the plan almost sounds benign.