Executive Summary 

• The GOP election sweep opens the door for policy change, leaving investors to sift through the details and determine the net economic impact.​
• Among the various policy shifts, the largest headwind and the most uncertainty centers around tariffs and their potential impact.​
• Deregulation under the new administration could serve as a potential tailwind, easing business restrictions and fueling growth.​
• Policy changes from the new administration are likely to support the economy and businesses, but some (like tariffs) may pose risks.

The Republican sweep may lead to a host of policy shifts, some positive and some negative for the economy

This information provides a general overview of the most likely 2024 election policy platforms and is not exhaustive. “TCJA” refers to the Tax Cuts and Jobs Act of 2017. The “Impact” reflects Glenmede’s expectations for potential outcomes measured in impact to GDP growth, ranging from the most likely scenario under a Republican sweep to possible outcomes that include additional policy changes. Actual policies implemented and their resulting impacts may differ materially from expectations.​

• The Trump administration hopes to implement a host of different policies, the most consequential of which are tariffs and their potential impact.​
• The net impact of the most likely items is about a 0.3% tailwind to GDP, however if Trump can find support for some more ambitious items the range may expand to about -1.2% to 0.8% of GDP.

Investors may begin to consider the impact of a return to a higher tariff regime

Data shown in the left panel are effective tariff rates on U.S. imports over time, which includes nominal tariffs on final goods as well as on imported inputs used in production. The dots are projections for the effective tariff rate if Trump were to implement various proposed tariffs, including 60% tariffs on all Chinese imports, 25% tariffs on all Canadian/Mexican imports and 10% tariffs on all other imports. Article I, Section 8 of the U.S. Constitution states “Congress shall have power to lay and collect taxes, duties, imposts and excises”. The Trade Expansion Act of 1962: Section 232 delegates congressional authority to the President to impose import restrictions that threaten national security. The Trade Act of 1974: Section 301 further authorizes the President to take appropriate action in response to unreasonable or discriminatory burdens to U.S. commerce. USMCA refers to the U.S.-Mexico-Canada Agreement. Actual results may differ materially from projections.​

• The incoming administration has proposed 60% tariffs on China, 25% tariffs on Canada/Mexico and a baseline 10% tariff on all imports, reverting effective tariff rates to early-20th century levels.​
• Trump should have the authority to impose the China and Canada/Mexico tariffs unilaterally, but the universal tariffs will likely require an act of Congress, making the latter less likely to be implemented.

Trump has proposed meaningful tariffs, though firms may adjust accordingly to offset some of the impact

The next administration is likely to return to a more business friendly regulatory approach

Data shown represent the estimated cost of new regulations as a % of GDP by year and grouped by presidential administration. American Action Forum is an independent, non-profit organization and is not formally affiliated with or controlled by any political group but may not be a completely unbiased source as it was established to promote “center-right” economic and fiscal policy. The use of its data should in no way be construed as an endorsement of the group’s political leaning, policy preferences or accuracy of estimates.​