Trump triumph presents new challenges to economic experts

Donald Trump's impressive comeback has not only stirred the emotions of American liberals but also shaken conventional economic experts. With his promise to introduce tariffs and other protectionist measures, the Republican has triggered a wave of gloomy economic forecasts. Yet these Cassandra warnings underestimate the mitigating factors and threaten the credibility of globalization advocates. Economists warn of the dangers of deglobalization, which could bring higher prices and lower GDP growth, but this leaves voters cold. Trump's victory reinforces this trend, as economists' advice is barely heard by politicians anymore. Studies, such as those from the Peterson Institute for International Economics, forecast that general tariffs could significantly burden American and European households. The renowned Wharton School at the University of Pennsylvania warns of a potential GDP decline of up to five percent over the next two decades, while the IMF expects a US GDP drop of 1.6 percent by 2026. Nevertheless, there are general issues in forecasting the effects of tariff increases. On the one hand, mitigating factors such as the possibility of a stronger dollar, which could reduce the inflationary impact on the US, are often not sufficiently considered. Companies will certainly find ways to cushion the blows, such as through adjustments in the value chain or relocating activities domestically. Moreover, monetary policy could offer support, with the European Central Bank reducing interest rates. On the other hand, Trump has also announced economically supportive measures, such as deregulating the energy sector and cutting taxes. It also remains questionable to what extent these tariffs will ultimately be implemented. Trump is known as a dealmaker, and it can be assumed that negotiations will take place, especially as American companies could present the impacts on their business. Economic forecasts often appear more dramatic to the average consumer than they actually are. For example, the predicted five percent GDP decline from Wharton is spread over two decades, which does not represent an immediate crisis. Likewise, the IMF does not cite a significant inflation increase as a result of Trump's proposals. Ultimately, the potential damage from protectionism should not be underestimated, but as in the case of Brexit, it will occur more gradually and cumulatively over the long term. Excessive panic could undermine confidence, stalling investments and slowing political integration in Europe. Overly pessimistic warnings weaken the necessary support for globalization and trade.