Trump's Policy "180-Degree Turn"? Analysts Predict How Tariff Reductions and Tax Refunds Will Boost the U.S. Economy

The Trump administration’s trade policy may face a significant shift. According to the latest news, Ed Yardeni, President of Yardeni Research, predicts that Trump will promote over 3% strong economic growth in the United States through a combination of tariff reductions and a wave of tax rebates. The logic behind this forecast is worth noting because it suggests that the government may gradually adjust from its previous protectionist stance.

The Logical Chain of Policy Shift

Strategic shift from barriers to bargaining chips

Ed Yardeni’s core view is that: the Trump administration will transform tariffs from simple trade barriers into negotiation leverage. What is driving this shift?

Analysis indicates:

• Price pressures have become the main catalyst, forcing the government to reassess the cost-benefit of tariffs
• Strategic goals have been achieved; the White House now has conditions to ease inflation by cutting tariffs
• Treasury Secretary Yellen has hinted that the effectiveness of tariffs is waning, which could signal a policy adjustment

Dual engines of economic growth

The growth drivers mentioned in the forecast come from two aspects:

The effect of tariff reductions: easing the cost of imported goods, reducing price pressures on consumers and businesses, thereby boosting consumption and investment willingness

The effect of tax rebates: directly increasing household disposable income, stimulating consumer spending, and providing demand-side momentum for economic growth

The combination of these two policies could theoretically support an economic growth of over 3%.

Market Implications and Risk Factors

Potential impact on asset markets

If this forecast proves correct, accelerated US economic growth may:

• Strengthen the US dollar, as economic growth generally supports currency appreciation
• Influence Federal Reserve policy expectations, possibly delaying rate cuts
• Change the performance of risk assets, including cryptocurrencies and other high-risk assets

Variables to watch

Yardeni also provides an important warning: if significant geopolitical shocks occur (such as worsening European tensions), all these economic forecasts will become invalid. This means:

• The current forecast is based on a relatively stable geopolitical environment
• Any major change in international situation could rewrite the economic outlook
• Investors should continuously monitor geopolitical risks

Summary

The core of this forecast is: the Trump administration may gradually shift from previous trade protectionism to easing trade tensions through negotiations. The combination of tariff cuts and tax rebates could theoretically support stronger US economic growth. But all of this depends on maintaining a relatively stable geopolitical environment. For investors in risk assets like cryptocurrencies, it is essential to pay attention to changes in US economic expectations and the evolution of international situations, as both will influence market risk appetite.