10 Huge Problems Waiting for Trump’s Economy

Against the expectations of numerous election analysts and forecasters, the Republican Party has won control of all three branches of the U.S. government again, vindicating this Listverse post from five years ago to an extreme degree. It is quite likely that President-elect Trump will soon find that his campaign won from President Biden and Vice President Harris a poisoned chalice.

Frankly, within a couple years, Kamala Harris is probably going to be as relieved that she lost as John Kerry likely was for his 2004 loss by the time 2008’s recession rolled around since it allowed both to avoid far worse legacies. It’s similar to how President Herbert Hoover is much more known and hated by history for the Great Depression happening during his presidency and being exacerbated by his policies than Al Smith is for losing to him in 1928.

For the purposes of this list, we’re assuming that Trump is going to follow through with his campaign promises and that with control of the U.S. House of Representatives, Senate, and Supreme Court, the U.S. government will not restrict the actions of the Trump Administration at all. The main issues will be physical reality, pre-existing economic conditions, and people who live beyond the president’s direct authority.

Related: Ten Vicious & Violent Political Feuds from American History

10 Tariff Backfire

In September 2018, tariffs of as much as 15% were placed on imports from China of roughly $200 billion in value, to the objection of many Republican members of Congress. In November of that year, the incumbent party lost control of the House of Representatives, in many instances losing in districts where retaliatory Chinese tariffs were targeted to effect.

By early 2020, the Phase One deal was announced, which heralded that China would reverse the retaliatory tariffs it placed on American goods and resume buying them at higher volumes. As of February 2022, it was reported that Chinese trade with America was still down below 2018 levels. Against that background, in 2024 Trump campaigned on tariffs of 60%-100% on Chinese and European goods.

Current indicators are that if Trump enacts anything like his tariff plans, the costs will be borne by U.S. consumers. All $80 billion of them approximately. Even if the tariffs achieve their ostensible side effect of motivating investment in domestic suppliers, having the prices of imported goods be raised doesn’t motivate domestic manufacturers to lower their prices, and domestic workers will reasonably be in a position to demand higher wages to meet higher costs of living as a result of these tariffs. This would contribute to a worsening of economic inflation. Really, it should have been a sign to MAGA voters that the tariffs on China were a bad idea when President Biden kept them in place.^[1]

9 American Emigration

As hackneyed as it is to say that if people don’t like election results, they should leave the country, there are many wealthy Americans who are acting like they took and are taking that advice to heart. As it happened, CNBC reported on November 1, 2024, that a study by Arton Capital found that 53% of millionaires intended to leave the country after the election and that the results didn’t matter. However, among citizens who earn over $215,000 a year, 53% described themselves as left-leaning, increasing the motivation for them to follow through in light of the results.

Now, that might sound like empty posturing, but it’s demonstrated bipartisan follow-through. American emigration to Europe spiked in 2016 and 2020, and by 2022 had increased 28% from the previous national election year. A July 2024 survey of Gen Z Americans found that more than 60% of them would prefer to move away over staying in the USA. For the wealthier among them, an investment strategy of being allowed indefinite residency provided they invest as much as $200,000 in the host country’s economy is becoming popular, and the investment has been nicknamed the “golden visa.”

Ironically, considering how the threat of illegal immigrants from Mexico featured in Trump’s presidential campaign, Mexico is receiving an influx of American expats. These American emigrants to Mexico numbered around 1.7 million, the most of any nation in the world. Between 2019 and 2022, that immigration rate increased by 70%, many of them retirees taking their social security payments with them. That is a lot of people taking their money out of America, even if a bunch of them are just sore losers.

One of the primary reasons for these moves to Mexico will be discussed in a few entries.^[2]

8 Ammunition Shortages

A common defense for domestic audiences of the prolonged American investment in Ukrainian defense and the Gaza war is that a lot of the equipment the U.S. armed forces sends overseas is obsolete. However valid that defense is, it has been reported repeatedly over the past few years that the U.S. supply of ammunition is becoming dangerously strained. In April 2023, National Public Radio reported how the main U.S. artillery munitions supplier, the Iowa Army Ammunition Plant, had the equivalent of its annual production output used up by the Ukrainian military every month.

These sorts of strains and limited production outlets are surprisingly common: In 2019, one plant in Lake City, Missouri, produced 85% of the U.S. military’s small-arm ammunition. The fact production fell so short of demands meant that the U.S. government needed to buy many munitions on Ukraine’s behalf. As a clearly highly motivated buyer, many suppliers have been able to price-gouge the U.S. military.

U.S. missiles are just extremely expensive and time-consuming to produce in general, so much so that even the notoriously bloated budget of its military still leaves a lot of hesitation to expend them. In January 2024, in support of the Gaza war, the U.S. Navy launched 94 Tomahawk missiles at Yemen to break the Red Sea blockade.

Yemen continued its blockade, while Foreign Policy reported that the U.S. used up its entire stock of Tomahawk missiles, which took two years to build and which there were no plans to replenish for 2024 since the weapons cost as much as $6 million each. Supply and cost issues like these will not be solved by any executive order or Department of Government Efficiency.^[3]

Speaking of issues with the U.S. military…

7 Military Recruitment Shortages

The U.S. military has consistently missed recruitment quotas for years, and its military is a vital source of strength for the U.S. dollar. Those under the impression that these recruitment problems stem from distrust in President Biden or the military under the control of liberals, in general, should bear in mind that this was also a problem during Trump’s first term.

In 2018, the Army Times reported that the U.S. military reached under 28,000 recruits during a period in 2017 when the goal was 40,000, resulting in a readjustment of the recruiting goal down by thousands. In 2019, they reported that the same problem had occurred in 2018, and then Fortune reported that it failed again in 2019 despite introducing a number of incentive programs, such as sign-on bonuses and assigning recruits to bases near their hometowns where they could presumably be able to recruit their friends.

These shortages in personnel contribute to real material problems. In 2023, Newsweek reported how the U.S. Navy is experiencing chronic maintenance problems with its ships. This has only been exacerbated by needing to put a number of them on full-time deployment for months in regions such as the Middle East, where they’re meant to protect Israel.

Even if Trump were able to inspire all the recruitments that all branches of the military need in 2025, there would still be most of a decade of backlog and maintenance that would have to be done to bring the armed forces back up to snuff since of course, the U.S. Armed Forces missed its recruitment goals again and again during the Biden years.^[4]

6 Dangerously Poor Citizenry

This was one of the two most significant talking points of the Trump campaign in 2024 and also a primary reason why there are so many American expats in Mexico. According to the Kaiser Family Foundation, half of Americans surveyed said that they were struggling to pay healthcare expenses alone, and a quarter had put off medical treatment due to cost in the last year.

There are flashing warning signs that troubles are going to climb higher up the economic ladder and into more benign corners of the economy if you know where to look for them. For example, in November 2024, Walmart scaled its holiday orders back more than 80% from 2022 because of tightened consumer budgets. With roughly 2/3 of the household wealth in the top 10% of households while 2.5% is in the bottom half, then simply put, the ability of the working class to afford many of the goods and services needed to keep the businesses making the top 10% wealthy is going to stop.

While Trump’s proposal to cut income taxes might seem like it would be useful, it actually threatens to widen the gap by disproportionately providing money for those who are already wealthy (40.1% of U.S. households pay no income tax), and it would necessitate cutting government assistance for the already impoverished, or it would create inflation through deficit spending.^[5]

5 Medicare/Social Security Insolvency

One of the more consistent promises of the Trump campaign since 2015 was that there would be no interference with Social Security and Medicare. Considering that Medicare covers 51 million Americans at less than 1/7 the overhead cost of private insurance programs, it’s no surprise that it was a winning promise. However, it’s entirely possible that significant, undesirable changes will be made to Medicare coverage independent of the will of the president.

In fact, within his own party, senators such as Rick Scott from Florida have pointed out that under the current spending trajectory, Medicare’s Hospital Trust Fund will be depleted by 2028. Proposed solutions to this have included raising payroll taxes by as much as 15% (of their current rate, that is, not of the 0% rate that Trump has proposed adjusting them to) or cutting coverage by about 24%. There’s also the alternative, as put forward by the Congressional Budget Office, of cutting Medicare overall by 8%.

The other looming government service that Trump has been resolute that he will not touch is social security. Considering that the social security reserves have been forecasted to not reach insolvency until 2035 by groups such as the Social Security Administration, it seems safe to say that’s something Trump can shrug off as a future administration’s problem, letting 2030’s retirees take their benefits being cut by 17%.

However, nonpartisan groups such as the Committee for a Responsible Federal Budget have put forward that under Trump’s plan, insolvency for social security would be both hastened and increased in severity (33% reduction in benefits instead of a 17% cut.) Insolvency would still be projected to come in 2031, well after Trump’s constitutional final term, but still soon enough in 2028 to make many retirees much more nervous than otherwise.^[6]

4 Real Estate Bubble

The twin ironies regarding real estate in a post-COVID pandemic world are that commercial real estate is in a crisis from a lack of revenue and that residential real estate is in a crisis of unaffordability. On the commercial real estate front, the Harvard Business Review reported in July 2024 that over the next two years, more than $1 trillion in loans to office real estate companies will come due. As of July 2024, the rate of loans that were nonperforming (i.e., not being repaid) had doubled from .54% to 1.25%.

Especially ominously, the rate just before the 2008 Great Recession was 0.87%. With 19.6% of office space in cities vacant in 2023, it seems unlikely this trend will reverse, and as pointed out by Axios in January 2024, that means that local/state governments will shift more of the tax burden onto residential properties. That is, in addition to the taxes that will need to be adjusted as a result of Trump’s administration cutting income taxes.

Now that we’ve transitioned to the subject of residential property, in March 2024, Fox Business sounded the alarm on how foreclosures were increasing dramatically nationwide. In South Carolina, there was a 51% increase from February in 2023. Pennsylvania saw a 46% increase, and Missouri saw a 50% one. This is by no means an evenly distributed problem, as in New York, they actually decreased 46%. But as said above, with office space becoming more and more vacant and many businesses defaulting on their loans, there is little reason to believe residential landlords and homeowners don’t have a debilitating property tax increase on the horizon.

For non-homeowners, the prospect of ever having their own residence seems to be receding into the distance. NBC News reported in June 2024 how the median home sold for $70,000 more than incomes in the county could afford, and in July of that year, Marketwatch followed up by reporting how in 98.8% of the U.S., homes had become even less affordable in the second quarter.

Trump’s proposals to address this amount to deregulating construction standards, lowering mortgage rates, opening more federal land up to construction, and reporting mass deportation to make illegal immigrant homes open. Presumably, he’ll make exceptions for the illegal immigrants that work in construction, which comprise about 31% of them, unless he wants wages for home builders to increase dramatically.

Poking further holes in the plan is that Bush deported 10 million illegal immigrants, and it did not improve the housing market. On top of that, it’s difficult to account for how lower-paid illegal immigrants are accumulating the wealth to buy homes or secure loans for them, so it’s unlikely a significant number of them are homeowners.

Certainly, they’re not the owners of the roughly six million American houses sitting vacant, of which 1.7 million are in Florida, the notoriously illegal immigrant-heavy state. So these mistakes seem like they will not address many of the largest real estate issues and not solve the problems they do attempt to address.^[7]

3 The Rise of BRICS

BRICS is an economic alliance between Brazil, Russia, India, China, and South Africa. The intention is to get around the ability of the United States to sanction countries, particularly Russia and China, for challenging U.S. authority in Ukraine and Taiwan, not to mention tariffs such as those put in place by Trump and Biden. These countries certainly have economic problems of their own to at least rival those of the U.S., but cumulatively, they are much more of a threat than President Trump, or the mainstream media for that matter, generally lets on.

As invincible and inescapable as the U.S. dollar’s status as the world reserve currency has seemed since the fall of the Soviet Union, BRICS is making a worrying amount of progress. In 2023, BRICS removed the dollar, which had previously been the currency for about 100% of oil trades, from 20% of them. Far short of a majority, but a considerable undermining of a hegemon.

As damaging to prices for consumers if tariffs are placed on a number of consumer goods, it would also be damaging to tariffs as a source of revenue if other countries just stop trading with them outright, as it would lower demand for domestic products. That seems increasingly likely, as the International Monetary Fund forecasted in October 2024 that BRICS would be a larger driver of economic growth over the next five years than G-7 countries.

While Trump has shown considerable willingness to reach across the aisle to BRICS countries, the tariffs he put in place in 2018 are a considerable part of the reason BRICS has the power it does in the first place, so he might be persuaded that concessions to them represent essentially a capitulation.^[8]

2 Ever Faster Aging Population

Listverse has recently devoted a list to the issue of declining birth rates in the U.S., but the other end of the age spectrum is offering huge problems, too. A number of professions are already so short-staffed that they’re trying to raise retirement ages. For example, there was an attempt to increase the mandatory retirement age for airline pilots to 67, which was just defeated in May 2024.

Additionally, the retirement age percentage of the population is projected to soon reach one in five Americans. That’s not just more people out of the workforce that still increase demand for goods and services; it expedites the expansion of Medicare and Social Security, moving up their dates of insolvency.

Especially as younger generations seem to be aging and becoming less healthy than our current retirees. Again, this is not the fault of any one administration, but it’s also something that will be very difficult to address without very drastic, unpopular policies, such as the oft-mentioned Republican plan to raise the retirement age.^[9]

1 Food Shortages

The last principal cause of Trump’s reelection that will be covered in this list was that the cost of groceries left many voters discontent with the incumbent party’s performance. With Trump in office, the promise is that those prices will go down through tax cuts and deregulation. Let’s set aside concerns that deregulation will mean more tainted food that will need to be recalled and, with it, more poisoned consumers. The general American food supply is a bit more tenuous than it might seem.

Not that there will be famine or anything of the kind, but crop yields were bad in 2024. So bad that the Farm Journal’s AG Economist poll reported that farmers expected it to be the worst harvest since 2007, which really should have been a sign of things to come for the DNC. This bad farming situation is not new: In 2023, natural disasters dropped crop yields by $21 billion. 2022 was also a notably bad harvest from droughts in California to damage to orange groves from Hurricane Ian in Florida.

Republicans in solid red states are corroborating these reports. In September 2024, Agricultural Commissioner Sid Miller made a public statement that Texas farms have been running out of water for some time. He followed this up on October 17, 2024, by signing an executive order allowing Texas farmers and ranchers to tap into the Rio Grande for water supplies. Even if that goes off without a hitch, it will be a considerable expense for many farms that will inevitably be passed on to consumers. Considering that as much as 80% of Texas was in severe drought conditions in 2022 and 2023 as well, the evidence indicates this is not a passing situation.

In short, for many voters who chose the Republican Party for economic reasons, the change of party in power seems likely to serve as a bandaid on a gunshot wound, at best.^[10]