Last minute Trump promises — from more tariffs to less chip money — add final wrinkles to 2024 contest
11/05/2024 20:39
New economic policy promises typically aren't rolled out during the final weeks of a presidential campaign. But that's one more norm Donald Trump and his allies have been upending in recent days.
New economic policy promises typically aren't rolled out during the final weeks of a presidential campaign. But that's one more norm Donald Trump and his allies have been upending in recent days.
The pledges have been coming fast and furious, including one last escalation of Trump's tariff promises on the final day of campaigning with the former president pledging to impose new blanket tariffs on Mexico.
"You're the first ones I've told it to," Trump told a crowd in Raleigh, N.C., on the last full day of campaigning Monday. "Congratulations, North Carolina."
It's a pledge that came alongside recent discussions from Trump and his allies of dramatically changing course on a signature Biden-era semiconductor bill that has catalyzed over $400 billion in semiconductor sector investments to even renewed talk of repealing the Affordable Care Act.
Whether all of this helps Trump's chance in a tossup contest remain to be seen, but it's yet another factor for last minute voters to consider as the 2024 contest reaches its end.
The series of promises are likely to further worry economists who have long noted that Trump's various plans could spur inflation anew or upend key economic sectors if he takes even a fraction of the dramatic actions referenced on the campaign trail.
What was perhaps the last policy unveiling came on Monday when Donald Trump barnstormed across the country and had a new message for America's largest trading partner: Mexico.
"If they don't stop this onslaught of criminals and drugs coming into our country," he told the Raleigh crowd, then "I'm going to immediately impose a 25% tariff on everything they send into the United States of America."
He added that if that doesn't work, he will just go up to as high as 100% duties on Mexican goods.
It was a new addition to Trump's intense tariff promises, from 60% duties on Chinese goods to 10-20% blanket duties on trading allies to 200% duties on automobiles from Mexico.
Trump claimed that he wanted to hold off announcing this last policy because he didn't want Vice President Kamala Harris to copy it. That's unlikely, with Harris and her allies regularly assailing Trump's tariff ideas as akin to a $4,000 sales tax on the American people.
Tariffs are taxes paid by companies at US points of entry as they bring in goods. Those additional costs are largely passed along to consumers.
The reference to a 100% tariff on Mexico led Brendan Duke, a left-leaning economist, to increase his estimate of how much Trump's tariffs would cost a typical family.
He has previously estimated that a 20% across-the-board tariff plus 60% duties on Chinese goods would cost that family $3,900.
On Monday he said a 100% tariff on Mexico would bring the tab up to $5,700.
While many in the business community have dismissed Trump's tariff promises as bluster, Trump's record stretching back to 2016 has shown he tends to keep — or at least try to keep — his tariff promises.
Many expect he will impose some flavor of historic new duties if he wins, but the key question appears to be if the courts intervene to block it.
Another last-minute policy debate is over the 2022 Chips and Science Act, which was signed by Biden and is in the process of sending about $50 billion to the semiconductor sector. That has spurred more than $400 billion in new investments by chip makers.
Late last month Trump told podcaster Joe Rogan "that chips deal is so bad," prompting Vice President Kamala to remind swing states — specifically Michigan and Arizona — that much of the money was headed to them.
But the issue got a new level of attention last Friday when House Speaker Mike Johnson responded to a question about whether he would try to repeal the law, which he voted against, by saying "I expect that we probably will."
It didn't help that the comment came during a stop in upstate New York, where money in that bill is set to help spur thousands of jobs.
An array of lawmakers immediately weighed in to defend the law and Speaker Johnson immediately backtracked and claimed to have misheard the question. He said he is only looking to reform the law.
As for the chance of repeal actually happening. Rhodium Group director Reva Goujon counseled caution in a Yahoo Finance appearance Monday, She said "The CHIPS Act is extremely unlikely to be repealed. There is bipartisan support for industrial policy, especially for chips.”
But Trump's last pre-election word on this issue appears to be that podcast appearance, where he told Rogan "when I see us paying a lot of money to have people build chips, that's not the way" — suggesting that tariffs were a better approach.
Johnson has also had to clarify remarks in recent days on what he and Trump would do on healthcare after Trump has floated repealing the law while declining to offer a plan for what would replace it.
Johnson again amplified the issue when video emerged of him with supporters saying "no Obamacare" and adding the program needed massive reform to work.
It was yet another comment that Johnson has sought to clarify; it was also seized upon by Democrats and could be a factor for voters in the final days of the 2024 contest.
Ben Werschkul is Washington correspondent for Yahoo Finance.
Every Friday, Yahoo Finance's Rachelle Akuffo, Rick Newman, and Ben Werschkul bring you a unique look at how US policy and government affect your bottom line on Capitol Gains. Watch or listen to Capitol Gains on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
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