Trump’s Tax Cuts and Tariffs: A High-Stakes Gamble for the U.S. Economy

The U.S. House Committee’s recent advancement of President Trump’s sweeping tax cut bill has reignited debates over fiscal responsibility and economic growth. According to the Wall Street Journal, the proposed legislation could balloon the federal deficit by nearly $3 trillion by 2034. This figure that has drawn sharp criticism amid Moody’s decision to downgrade the U.S. credit rating. At the same time, the administration continues to leverage tariffs as a tool for economic revival. Although there have been warnings from conservative economists who argue that these policies may do more harm than good,.

Jessica Rudle, a senior fellow at the Manhattan Institute and a self-described conservative economist, has been particularly vocal in her skepticism. In a recent op-ed titled “I’m a Conservative Economist. Here Are Six Reasons Trump’s Plans Won’t Work,” she outlines why the administration’s fiscal and trade strategies could backfire.

The True Cost of Trump’s Tax Cuts

While the tax bill has been marketed as a growth engine, Rudle warns that its long-term fiscal impact is being dangerously understated. If temporary provisions—such as business expensing rules—are made permanent (as many expect), the total cost could exceed $6 trillion over a decade. This will surpass the combined price tags of the 2017 tax cuts, the CARES Act, Biden’s stimulus, and the Inflation Reduction Act.

The Tax Foundation’s analysis further undermines the growth narrative. This suggests that the bill’s pro-business incentives are too short-lived to meaningfully boost investment. Also, politically popular measures—like exempting tips and overtime from taxation—offer little macroeconomic benefit. Worse still, rising interest rates could exacerbate the deficit, pushing annual shortfalls toward $4 trillion within ten years.

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