Article Summary –
Donald Trump is set to inherit a robust U.S. economy with low unemployment and ongoing infrastructure projects initiated under President Joe Biden’s administration, which voters largely overlooked due to concerns about inflation. Despite Trump’s campaign promises to reverse Biden’s policies, it’s expected that he might continue these projects and claim credit for them, as they benefit states that supported him. While Trump has criticized the Inflation Reduction Act, there’s indication he might support electric vehicles, particularly with backing from Tesla CEO Elon Musk, potentially aligning with some of Biden’s energy goals.
WASHINGTON (AP) — The next step is for President-elect Donald Trump to decide if he wants to endorse the projects awaiting him.
Trump’s victory was fueled by voter dissatisfaction with high costs and a desire for major US changes. However, as he assumes office in January, he will oversee an economy poised for growth.
With low unemployment and easing inflation, the Biden administration has laid out numerous infrastructure projects ready to advance. Projects like the TSMC chip plant in Arizona and Hyundai’s EV factory in Georgia are among many set to unfold over the years.
This scenario could allow Trump, not Biden, to claim credit for rebuilding America, provided he lets these initiatives continue.
Biden recently noted that the beneficial effects of his policies will largely manifest post his term’s end in January.
“The majority of the benefits will unfold over the next decade,” he remarked in the Rose Garden. “The path forward is clear.”
Trump aims to reverse Biden’s policies, but projects are in motion
On the campaign trail, Trump criticized Biden’s record but offered little detail on which initiatives he might cancel. In September, Trump vowed to “rescind all unspent funds under the misnamed Inflation Reduction Act.”
Biden aides expect Trump to proceed with planned projects and claim credit, similar to Republicans in Congress who celebrated developments they opposed.
The administration has invested in signage promoting Biden’s role; Trump could easily rename them. Biden aides believe Trump won’t cut programs aiding states he won, despite potential Republican efforts for token repeals.
Karoline Leavitt, spokeswoman for the Trump-Vance transition, stated, “The American people re-elected President Trump with a mandate to deliver his campaign promises.”
Natalie Quillian, Biden’s deputy chief of staff, highlighted that their programs are positively impacting the economy.
“We’ve announced investments for 70,000 infrastructure and clean energy projects, catalyzed nearly $1 trillion in private sector investment, and created 1.6 million jobs in construction and manufacturing,” she said.
Trump enters the White House amid economic improvement
Despite Trump’s claims of economic hardship, he inherits a healthier economy by several measures.
Trump secured the election with unemployment at 4.1%, inflation at 2.4%, and the Federal Reserve lowering rates to spur growth. Fed Chair Jerome Powell recently described the economy as “strong overall.”
Voters, however, felt economic weakness, penalizing Democrats for inflation tied to post-pandemic supply chain issues and Russia’s 2022 invasion of Ukraine, which drove energy and food prices higher.
Despite the broader inflation rate, voters prioritized price changes over the past four years. Nearly 9 in 10 cited inflation as crucial in their voting decision, with Trump winning the majority, per AP VoteCast survey data.
Economists advising Trump argue the economy isn’t as robust as top-line figures suggest, noting the significant role of government debt in growth.
“Government spending is sustaining the economy,” said Joseph LaVorgna, former chief economist at the White House National Economic Council during Trump’s presidency.
LaVorgna pointed out that recent job growth primarily stems from government and health care sectors, not manufacturing.
Potential pressure to adopt renewable energy and EVs
Some Republican lawmakers acknowledge the benefits of energy tax credits from the Inflation Reduction Act and support their preservation. Eighteen GOP House members urged House Speaker Mike Johnson in an August letter to maintain these credits.
Trump-supporting economists suggest EV sales might rise under his administration with Elon Musk’s support.
While Trump wanted to cut Biden’s EV incentives, Musk’s endorsement led him to say, “I’m for electric cars.”
This shift could depoliticize the issue and lead Trump to achieve a goal set by Biden, suggested Stephen Moore, a Trump adviser and Heritage Foundation economist.
“Without Biden, the EV industry will recover,” Moore said. “Biden polarized EVs; half the country opposed him and wouldn’t buy an EV out of principle.”
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