President Trump’s real bet is on tax cuts

Fun U.S. dollar bills were distributed during Donald Trump’s presidential inauguration
The dollar exchange rate and corporate tax cuts, not protectionism, will shape the Trump administration’s economic policies (source: dpa)
  • Cutting corporate taxes would help the United States and the world economy
  • Import barriers are unlikely to enhance growth and boost wages
  • If the ECB insists on quantitative easing and the Fed raises interest rates, President Trump may start a trade war with Europe

True to his campaign pledge to make “America first,” President Donald Trump has repeatedly asserted that he will do all it takes to boost wages and corporate profits. The slogan is understood as a promise to enforce aggressive trade policies and has become one of the main targets of Mr. Trump’s opponents. One ought to remember, however, that import tariffs are only one of the two pillars of the new president’s economic policy. The other consists of significant corporate tax cuts, whose aim is to encourage local entrepreneurs and lure foreign manufacturers into the United States.

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