The economic policy of the Donald Trump administration was characterized by the individual and corporate tax cuts, attempts to repeal the Affordable Care Act ("Obamacare"), trade protectionism, immigration restriction, deregulation focused on the energy and financial sectors, and responses to the COVID-19 pandemic.
Over his term, Trump reduced federal taxes and increased federal spending, both of which significantly increased federal budget deficits and the National Debt.[1][2] The positive economic situation he inherited from the Obama administration[3][4][5] continued, with a labor market approaching full employment and measures of household income and wealth continuing to improve further into record territory.[6] Trump also implemented trade protectionism via tariffs, primarily on imports from China.[1] During Trump's first three years in office, the number of Americans without health insurance increased by 4.6 million (16%).[7][8] while his tax cuts were projected to worsen income inequality.[9]
Trump took office at the height of the longest economic expansion in American history.[10] The 128-month (10.7-year) economic expansion that began in June 2009 abruptly ended at a peak in February 2020, with the U.S. entering a recession due to the COVID-19 pandemic.[11] The U.S. unemployment rate, which had hit a 50-year low (3.5%) in February 2020, hit a 90-year high (14.7%) just two months later, matching Great Depression levels. In response, Trump signed the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES) on March 27, 2020 which helped maintain family incomes and savings during the crisis, but contributed to a $3.1 trillion budget deficit (14.9% GDP) for fiscal year 2020, the largest since 1945 relative to the size of the economy.[12][13] Trump left office with 3 million fewer jobs in the U.S. than when he took office, making Trump the only modern U.S. president to leave office with a smaller workforce.[10] Throughout his presidency, Trump mischaracterized the economy as the best in American history.[14]
Despite saying during the 2016 campaign he would eliminate the national debt in eight years,[15] Trump as president approved large increases in government spending, as well as the 2017 tax cut. As a result, the federal budget deficit increased by almost 50%, to nearly $1 trillion (~$1.13 trillion in 2022) in 2019.[16] Under Trump, the U.S. national debt increased by 39%, reaching $27.75 trillion by the end of his term; the U.S. debt-to-GDP ratio also hit a post-World War II high.[17] Analysis has suggested that the economy would have grown without any intervention by the Trump administration.[18]
President Trump inherited an economy in January 2017 that was already at a record level on many key measures, such as the number of persons with jobs,[19] real median household income,[21] household net worth,[22] and stock market level. It also featured a low unemployment rate of 4.7%, very low inflation, and a moderate budget deficit.[23][3] While Trump referred to "American carnage" in his first inaugural address and announced an "America First" economic strategy,[24][25] overall the economy when he began was on solid ground in terms of major aggregate measures.[3][4] The Congressional Budget Office forecast in January 2017 that assuming the continuation of Obama policies (current law), real GDP growth would be 1.8% in 2017 and 2.3% in 2018, and unemployment would continue falling to 4.4% by 2018, as the economy reached full employment.[26]