Trump’s Economic Shake-Up: What Investors Should Watch in 2025

President Trump's 2025 economic measures, such as extending the Tax Cuts and Jobs Act (TCJA) and imposing tariffs, are restructuring the U.S. financial environment. The TCJA extension will see long-term GDP growth of 1.1%, but raise federal debt by $4.5 trillion in the decade ahead. At the same time, tariffs on Canadian, Mexican, and Chinese imports are meant to rebalance trade but may decelerate U.S. GDP growth by as much as 0.7 percentage points in 2025.

Trump's "America First" agenda focuses on re-shoring manufacturing, de-regulating industries, and promoting energy independence. Critics warn, however, against inflationary pressures and declining global confidence in U.S. leadership.

For investors, these policies can create volatility in industries like manufacturing, energy, and technology. While there are prospects for domestic sectors, foreign markets are susceptible to higher risks.

Source: Tax Foundation, NIESR, NY Times