Moody's: Trump's Economic Plan Would Trigger a Recession by 2025

Trump's plan would reignite inflation and slow down economic growth

Author:
Troy Matthews
Publish date:
Jun 21, 2024

Economists have spoken: President Biden is better for the economy than Donald Trump.

According to an analysis from Moody's Analytics, Trump's MAGAnomics economic plan ⎯ slash taxes for the rich, spike import tariffs, and institute mass deportations of immigrant workers ⎯ would trigger a recession by mid-2025, with an economy that would slow to an average 1.3% annual growth, vs. 2.1% under Biden.

"Biden’s policies are better for the economy," said Mark Zandi, Chief Economist of Moody’s Analytics.

Trump's plan to fund the government through higher import tariffs would cause companies to pass their increased costs onto consumers: reaccelerating inflation that has been steadily cooling during Biden's term.

According to Moody's, next year under a Trump administration inflation would rise from the current 3.3% to 3.6%, well above the 2.4% forecast for next year under Biden. The U.S. would have 3.2 million fewer jobs and a 4.5% unemployment rate at the end Trump's term, compared to Biden's 26-straight months of unemployment under 4%.

U.S. economic growth in 2023 under Biden surpassed China for the first time in 40 years.

Increased tariffs on imports and the resulting higher inflation would also dramatically increase the value of the dollar, leading to fewer exports of U.S products, harming manufacturers and their employees.

"I think it would be bad for workers and bad for consumers," said Michael Strain, Director of Economic Policy Studies at the American Enterprise Institute, a conservative think tank. Trump's tariff plan also likely won't fully offset his planned tax cuts, adding trillions to the national debt.

"Trump just received a report card for his extreme MAGAnomics plan, and Moody’s gave him a failing grade. The latest report by Moody’s details how a second round of Trump’s MAGAnomics agenda would tank the economy, and trigger a recession by 2025," DNC National Press Secretary ⁨Emilia Rowland said in a statement.

By contrast, if Biden wins the Presidency and maintains a divided Congress, the most heavily-predicted scenario, economists predict cooling inflation trends will continue, reaching the target 2% sometime around summer 2025.