Donald Trump won the New York Republican primary by an overwhelming margin Tuesday despite spending the least of any candidate in the presidential race from either party.
While that sounds like the kind of great deal-making that Trump brags about, his business record and his economic proposals have come under intense scrutiny during his White House bid this year. From deporting millions of immigrants to inciting a trade war with other countries, Trump has made many grandiose promises over the course of his campaign. Most of his platform is based on improving the U.S. employment picture, but while he's focused on giving Americans a break — and creating jobs — his plans would cost the federal government trillions of dollars and many economists say they would be nearly impossible to carry out.
As the New York real estate magnate consolidates his lead over the GOP field, many Republicans are scrambling to stop him from clinching their party’s nomination. But so far, little has been able to slow Trump’s march to the convention. Before New York’s primary, Trump led Texas Sen. Ted Cruz and Ohio Gov. John Kasich in the delegate count with 755 delegates to Cruz’s 543 and Kasich’s 144. After Tuesday night, that lead was poised to increase significantly.
As he often does, Trump talked up his business acumen during his victory speech in New York City Tuesday night. “We're going to use our great business people to negotiate unbelievable trade deals,” Trump said.
With Trump a step closer to winning the GOP nomination, here's a look how some of the businessman’s most touted policies could shape the U.S. economy.
Trump’s tax plan would give most Americans large tax breaks, with the biggest gains going to the wealthy. Overall, it would cut nearly one-fifth of the money brought in by the U.S. government over the next decade, costing $9.5 trillion, according to the Tax Policy Center, a project of the liberal Urban Institute and the Brookings Institution.
Other estimates, such as the one from the right-leaning Tax Foundation, found that Trump’s plan would cost even more, nearly $12 trillion in revenues over 10 years. The left-leaning Center for Tax Justice also estimated the plan’s cost at $12 trillion.
Trump has said his tax cuts would pay for themselves by jump-starting the economy: The new business and economic growth would balance things out, he contends. But experts told International Business Times earlier this year that this was unlikely.
“The more you reduce tax rates, the less bang you get for your buck in economic growth,” Marc Goldwein, senior policy director of the Committee for a Responsible Federal Budget, told IBT. “As his plan stands right now, there is no plausible amount of growth that can make it pay for itself.”
Illegal immigration is one of Trump’s favorite issues. He has talked about cracking down since the beginning of his campaign and says he wants to deport the 11 million undocumented immigrants currently living in the U.S.
Critics on both sides of the political aisle have pointed out that deporting that many people would be incredibly expensive, but a potentially bigger issue is that mass deportation would also harm the U.S. economy. Both the Obama administration and conservative think tanks like the Cato Institute have found that immigrants have a positive effect on the economy. For example, they are disproportionately responsible for starting new businesses.
Trump has many problems with immigrants, and one of his big concerns is that he believes they have caused stagnating wages. However, studies have found minimal impact in that area. For example, University of California, Berkeley, economist David Card wrote in 2012 that “the impacts of immigration on native workers in the United States … have been very small.” In an earlier review of immigration studies, Card also found that wages in cities with many immigrants were “a little higher, on average.”
Another issue Trump and others have raised is that immigrants drain resources from the United States, particularly in areas such as healthcare. It's difficult to measure exactly how much meeting the medical needs of undocumented immigrants costs the U.S., given that hospitals cannot turn away a person in need of care, regardless of their immigration status or ability to pay. A 2013 report by Kaiser Health News found that emergency health treatment costs to Medicaid amounts to about $2 billion a year, mostly for undocumented immigrants.
But while those costs might exist, getting rid of millions of immigrants would also harm the many industries, such as agriculture, that depend on immigrant labor. Without their primary workforce, these industries would have a difficult time functioning as they do now.
"There would be an abrupt drop in farm income and a sharp rise in food prices," John McLaren, a professor of economics at the University of Virginia, told the Street last month.
Immigrants, like all other people, also spend money they earn, which helps U.S. businesses and drives the economy in many cities, economists have found. So getting rid of 11 million immigrants, if you could do it, would likely not help the U.S. economy.
Building the Wall
Another of Trump’s top proposals has been his plan to build a wall along the southern border and make Mexico pay for it. After months of mystery around how exactly Trump would accomplish this, the Republican sent a memo to the Washington Post outlining his plan earlier this month. In the memo, Trump claimed he would force the Mexican government to pay for the wall by cutting off billions of dollars in remittances that immigrants send back to their home country.
His plan would involve changing a rule in the USA Patriot Act, an anti-terrorism law, to cut off a portion of the money sent to Mexico through money transfers. Trump called this “a onetime payment of $5-10 billion” but many experts said his plan would be difficult to implement and would likely hurt Mexico’s economy.
President Barack Obama also responded sharply to Trump’s Mexico border wall plan. “Good luck with that,” the president said after Trump’s memo came out this month.
“People expect the president of the United States and the elected officials in this country to treat these problems seriously, to put forward policies that have been examined, analyzed are effective, where unintended consequences are taken into account,” Obama added. “They don’t expect half-baked notions coming out of the White House. We can’t afford that.”
Trade With China
Trump never misses an opportunity to talk tough on trade. He is particularly fond of criticizing trade with Mexico and China — two countries that make up about 28 percent of U.S. trade.
Trump has basically advocated a trade war, saying he would like to break the NAFTA agreement with Mexico and clamp high taxes on imports to make U.S. goods more competitive. He also often criticizes U.S. companies that have moved jobs overseas, such as Ford, which he has hit many times for having manufacturing jobs in Mexico.
The loss of jobs to other countries is a major issue for many Americans, and many economists agree that the current U.S. trade policies are hurting jobs. But most experts have also said this is not an issue likely to be solved by the plans Trump is proposing. Several experts recently told CNBC that Trump’s trade plans could lead to a global recession because high tariffs on goods from China would cause an excess of products that cannot be sold in the U.S. Those goods would then need to be sold more cheaply in other countries, which could lead those countries to enact their own tariffs, resulting in high prices everywhere and potentially a recession. American exports would suffer.
Financial journalist Roger Lowenstein wrote something similar in Fortune back in February. “Trump wants to close the economy. He represents not the economics of hope but the economics of fear,” Lowenstein wrote. “We can only win if our neighbors lose. That’s the sort of narrow, desperate protectionism that, in the 1930s, helped to fuel a world depression.”
Other economists have said that in addition to these short-term problems, Trump's plans won't actually renew America's economy.
"If he puts 35 percent taxes on products, the manufacturing will still not come back to the U.S., and all it will mean is U.S. consumers have to pay 35 percent more for the products that are made outside the country," Michael Busler, professor of finance at Stockton University in New Jersey, told the Street.