Extended tariff wars? A strategic cryptocurrency reserve? A return to a 19th-century worldview? What is the policy outlook for the second Donald Trump presidency?
In a series of events held at the University of Chicago Harris School of Public Policy, UChicago scholars examined Trump’s economic as well as domestic and foreign policies—a rigorous debate that tried to forecast what a president known to be “predictably unpredictable” could do.
Here are highlights:
Tariffs
Panelists discussed the impact of proposed tariffs targeting China, Mexico, and Canada, including on gas prices. “We import four million barrels a day of crude oil and refined products from Canada,” said Prof. Ryan Kellogg. “Most of that comes here to the Midwest or to the Rocky Mountains. It is going to be titanically disruptive if those tariffs are put in place all of a sudden. We're going to see higher gas prices for several years at least and the supply chain readjustment is going to cause tremendous losses for our ally Canada.”
Cryptocurrency
Trump has vowed to create a bitcoin “strategic reserve” and to make the United States the world’s “crypto capital.” The latter is “extraordinarily dangerous,” said Prof. Steven N. Durlauf, who described the first Trump administration as “the advocate of reduction of oversight.” He expects this second term to lead to fewer of the efforts governments make to set financial institutions’ capital and liquidity requirements to avoid some of the most harmful consequences of crashes. Calling Trump’s boosting of the cryptocurrency industry, “extremely unwise,” Durlauf said, there is no data on cryptocurrency’s risk properties. Back in 2008, he noted, that same lack of data existed for subprime mortgages.
‘An outstanding 19th-century president’
Prof. Paul Poast explored what he described as Trump's fascination with William McKinley, who was president from 1897 until 1901 and who, Trump said at his inauguration, “made our country very rich through tariffs.” “McKinley’s imperialist policies — the U.S. annexed Hawaii and the Philippines and declared war on Spain during his administration — are echoed in Trump’s talk about Panama and Greenland, Poast said. “One way I can think about a unified theory of Trump's foreign policy,” Poast said, is to say Trump “is going to be an outstanding 19th century president.”
Regulatory reform
During discussion about energy and environmental policy, Kellogg said he was cautiously optimistic about the possibility for regulatory reform during this Trump administration. The current regulatory structure, he said, is a roadblock for firms that want to make investments in the sectors while being mindful of environmental protections and giving local communities a voice. “Environmental reviews by the federal government can take as long as five years-plus,” he said. “Plus, there's a six-year period after that where … parties can litigate ex-post. If you're a firm interested in making these investments in infrastructure, that is obviously a really big problem.”
UChicago scholars discuss President Trump’s foreign policy agenda (Video courtesy of Harris School of Public Policy)
Middle East
Panelists dug in on a range of Middle East issues: Gaza, Iran, the warming relations between Saudi Arabia and Israel, and the Abraham Accords—the 2020 agreements that normalized diplomatic relations between Israel and several Arab nations. “If there's a signature foreign policy accomplishment of the first Trump administration, one that he received a lot of credit for and that the Biden administration continued, it was the Abraham Accords,” Poast said, adding that Trump wants to see the accords continue as a balance against Iran. There is “a tremendous amount of human suffering happening on the planet right now associated with one military that has used its proxy forces globally. And that’s Iran,” Assoc. Prof. Austin Wright added. “I think that the Trump administration is taking very seriously the threat that that poses as is Israel.”
Social programs
Durlauf said there were many policies that Trump has promoted in the past, and likely will again, that he did not support, such as cuts to programs like SNAP (formerly food stamps). “If you look at the previous Trump administration, every time there was a budget he tried to cut aid to the disadvantaged,” Durlauf said.
‘America First’
“If you were trying to calculate the Trump Doctrine, or at least what he's trying to propose as a doctrine, it is ‘America First,’” Wright said. “It's a transition to very transactional policies,” he said adding: “Why are we withdrawing from the Paris Accords? Because of concerns about the impact of those accords on American workers. Why are we withdrawing from the World Health Organization? [Because of] concerns about management of the pandemic, and specifically how it affected the United States. When we think about a lot of the changes that occurred during Trump 1 and likely will occur under Trump 2, it really is about putting the United States’ position first on the global stage.”
Education policy
Assoc. Prof. Lesley Turner said she thinks there are opportunities for low-profile, bipartisan policies that could have a meaningful impact on students. They include the College Transparency Act, which would create a nationwide database tracking students through college and into the labor market, providing a tool to provide transparency about success rates. As for Trump’s campaign talk about returning education to the states, Turner said that “there isn't going to be a huge amount of change that is even possible.” The majority of funding for K-12 education comes from state and local sources. “The federal government's role in K-12 education is pretty minimal,” she said.
—Adapted from a story that was first published on the Harris Public Policy website.
