Trump Vows to Lower Prices. Some of His Policies May Raise Them.

The "largest domestic deportation in American history" planned by Mr. Trump would have several economic impacts. According to interviews with economists, this policy would most likely increase the cost of labor. As the number of deportations rise, the supply of workers would decrease, causing wages to increase as employers compete for the remaining available workforce. This could lead to higher prices for goods and services as businesses pass on the increased labor costs to consumers.

Additionally, mass deportations could disrupt the labor market and negatively affect job opportunities for native-born citizens as well. Immigrants often work in industries that rely heavily on their labor, and their removal could prompt businesses to cut back or start fewer new businesses, in some cases shifting their investments to less labor-intensive technologies and industries. This could result in a reduction of employment and earnings for U.S. workers in both the short and long run.

Furthermore, the deportation of millions of people would require significant resources and could lead to increased government spending, potentially contributing to higher deficits and interest rates. This could, in turn, put additional upward pressure on prices.

In conclusion, the "largest domestic deportation in American history" as planned by Mr. Trump could lead to increased labor costs, job market disruptions, reduced employment and earnings for U.S. workers, and higher government spending, all of which could contribute to higher prices for consumers.

The imposition of new tariffs on nearly all imported goods could potentially raise their prices and those of their domestic-made competitors. Here's a simplified explanation:

1. Increase in Import Prices: When a tariff is imposed on imported goods, it increases the cost of these goods for consumers. This is because the tariff, essentially a tax, is often passed on to the consumers by the importers.

2. Increase in Domestic Prices: Domestic producers who compete with the imported goods may also raise their prices. This can happen because the tariffs make the imported goods less price-competitive, giving domestic producers the ability to raise their prices while still remaining competitive in the market1.

3. Increase in Cost of Production: If the imported goods are intermediate goods (goods used in the production process), then the tariffs can increase the cost of production for domestic producers who use these goods. This increase in production cost can lead to higher prices for the final goods produced by these domestic producers.

4. Potential for Trade Wars: If other countries retaliate with their own tariffs on U.S. goods, it could lead to a trade war. This could potentially lead to higher prices for U.S. goods abroad and potentially lower demand for these goods, which could then lead to higher prices domestically.

In summary, the imposition of new tariffs on nearly all imported goods could potentially lead to higher prices for both imported and domestically produced goods.