Trumponomics: Donald Trump’s economic reforms

Denis Zlobin, Master’s degree student, Basic Department of Institute of China and Contemporary Asia of the Russian Academy of Sciences, Faculty of World Economy and International Affairs, HSE University

Source: AI generated

Trumponomics…Frankly speaking, it should be considered the potential development of events in the United States, assuming that the main vector of the country's economic policy will be tramponomics.

Taking into account what tramponomics is, it is worth piding it into two components. The first is an inward-looking economic policy. This may include such sectors as corporate taxes, regulation/deregulation of norms in industries belonging to the so-called “green agenda”, such as the coal and oil industries, as well as the optimization of spending. The second part is foreign economic policy. This includes, first and foremost, Trump's trade policy toward China and other countries, as well as protectionist tariff measures designed to accelerate the recovery of the U.S. manufacturing sector.

Let's start with the first part, i.e. internal economic policy. Touching upon the topic of cost reduction, we can assume that a radical policy to reduce the size of the bureaucratic apparatus awaits us. This assumption is supported by the establishment of the “Department of Government Efficiency” (DOGE) by a special decree of President Trump on January 20, 2025[1], which main goal is to optimize spending. This argument is supported by the fact that in almost one month of Trump's presidency, DOGE sent out buyout offers to over 2 million federal workers[2]. As for corporate tax cuts and tax rates, this assumption is also already being confirmed. On the tax side, the Tax Cuts and Jobs Act (TCJA) of 2017, which was approved in 2017 during Trump's first term, lowered corporate taxes to 21%[3]. Given that Trump was re-elected for a second term and the TCJA has a duration until December 31, 2025, we can assume that this trend of corporate tax relief will continue, considering that there are already talks about extending the provisions of TCJA indefinitely[4]. The plans to deregulate business also represent more than just a possible relaxation of some regulations. Trump plans to introduce the so-called 10-to-1 Deregulation Initiative in order to 'halt the regulatory onslaught...of the Biden Administration'[5]. Given that the initiative also mentions the desire to ease soaring energy prices, it is logical to assume possible relaxations in areas related to the so-called “green agenda”, i.e. oil, gas and coal industries.

Moving to the topic of the foreign economic agenda, we can assume that we are waiting for the beginning of a series of measures that cannot be interpreted other than protectionist. President Trump already announced “implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China”[6]. This measure, if combined with the already mentioned trend of corporate tax cuts and private business deregulation, clearly shows that President Trump's economic policy priority is to strengthen national production by creating the most favorable conditions for domestic companies. At the same time, if we take separately the situation with tariffs in terms of foreign relations, then, taking into account the first term of President Trump, there are also fears that such measures may lead to the beginning of new expanded “trade wars” involving not only China, but also Canada and Mexico. This is indirectly confirmed by the news that the Canadian government is already preparing a retaliatory tariff package against U.S. products[7]. Similar news is circulating regarding possible measures that the Mexican government may take[8].

Thus, the general goal of tramponomics can be indicated as the reduction of government spending, as well as the revival of American industry with the help of government support, which can be interpreted as a classic protectionist policy that gives American companies an advantage over foreign companies. Nevertheless, such a drastic change in US economic policy will inevitably encounter resistance from external actors, as these measures put foreign companies at a disadvantage. This in turn is likely to generate confrontations similar to the trade wars of Trump's first term and could also have a negative impact on future integration trade projects like the USMCA (United States-Mexico-Canada Agreement).

[1] White House. Establishing and Implementing the President’s “Department of Government Efficiency”. 2025. URL: https://www.whitehouse.gov/presidential-actions/2025/01/establishing-and-implementing-the-presidents-department-of-government-efficiency/ (accessed 06.03.2025)

[2] ABC News. Here are all the agencies that Elon Musk and DOGE have been trying to dismantle so far. URL: https://abcnews.go.com/Politics/elon-musks-government-dismantling-fight-stop/story?id=118576033 (accessed 06.03.2025)

[3] IRS. Tax Cuts and Jobs Act: A comparison for businesses. 2024. URL: https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-a-comparison-for-businesses (accessed 06.03.2025)

[4] Tax Foundation. Making the Tax Cuts and Jobs Act Permanent: Economic, Revenue, and Distributional Effects. 2025. URL: https://taxfoundation.org/research/all/federal/tax-cuts-and-jobs-act-tcja-permanent-analysis/ (accessed 06.03.2025)

[5] White House. Fact Sheet: President Donald J. Trump Launches Massive 10-to-1 Deregulation Initiative. 2025. URL: https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-president-donald-j-trump-launches-massive-...

[6] White House. Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China. URL: https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/ (accessed 06.03.2025)

[7] Department of Finance Canada. Canada announces robust tariff package in response to unjustified U.S. tariffs. URL: https://www.canada.ca/en/department-finance/news/2025/03/canada-announces-robust-tariff-package-in-response-to-unjustified-us-tariffs.html (accessed 06.03.2025)

[8] AP News. Mexico says it will impose retaliatory tariffs on US with details coming Sunday. 2025. URL: https://apnews.com/article/trade-war-mexico-trump-9cefdded035a0b35e700a7ba0bfc34b4 (accessed 06.03.2025)