A series of appearances in recent weeks have solidified a truism about former President Donald Trump: Nearly every economic challenge, from deficits to the fraying social safety net, can seemingly be solved with more oil drilling or new tariffs.
It will be “so easy,” he is fond of saying — and will also bring in waves of money.
But economists and other experts are skeptical on multiple fronts: Would it really be that easy? Would it bring in anywhere close to as much money as the former president thinks?
Not to mention whether such policies might cause more problems than they solve.
Yet it hasn’t slowed Trump, who at a series of events in recent weeks — from the recent debate to an economic speech to multiple rallies and press appearances — has promised that America’s coffers will be overflowing if he wins in November because of these twin policies.
“We’re gonna have so much money coming in,” he said at a speech last week in New York on the topic of tariffs. Oil is additional “liquid gold,” he added Thursday during a stop in Arizona.
Trump has in turn promised that these funds will pay for nearly all of his other ideas. Everything from lowering deficits to defeating inflation to lowering taxes to cutting prices in half, he says, will be possible, with enough left over to create a new national sovereign wealth fund.
In one widely noted exchange at the Economic Club of New York, Trump fielded a question on what childcare policies he’d champion but answered even that by returning again to tariff revenue.
“Those numbers are so much bigger than any numbers we are talking about, including child care,” Trump said in a meandering and widely criticized answer.
The rhetorical tack from Trump is also a way to try and wave away questions about the costs of his other ideas, from extending his 2017 tax cuts to a call for free IVF coverage to a new policy announced this week to end taxes on overtime.
Trump also recently endorsed a government efficiency commission, to be headed by Tesla CEO Elon Musk, that he says will generate trillions more.
‘Liquid gold’
Oil drilling is the area where the GOP nominee returns perhaps the most often, promising to unleash the sector at nearly every campaign stop.
What he often overlooks is that the US, under the Biden/Harris administration, is currently drilling more oil than during Trump’s term. In fact, the US is currently producing more than any country in history.
But Trump nonetheless promises that his plan for the sector will not only bring in additional billions, it will also cut energy prices in half.
“We will cut it in half, and that includes your heating, air conditioning, electricity, gasoline for the cars,” he promised an audience in Wisconsin. “And we’ll do it easily, you can hold me to it.”
It’s a notion that many experts have discounted — noting a variety of factors that will make such a dramatic price drop unlikely.
Whoever the next president is could benefit from a recent trend of overall gas deflation, with gas prices currently at the lowest level since 2021.
But there are limits.
Trump, if he wins, would presumably swiftly cut red tape for oil companies and open new areas for drilling. But oil companies themselves might not go along and could be skeptical of a plan that could result in a giant drop in profit margins.
“Even if you open up some federal lands and reduce friction costs of permitting, the economics is going to be what drives those decisions.” CIBC Private Wealth US senior energy trader Rebecca Babin told Yahoo Finance, adding that a massive expansion is unlikely but there could be some changes on the margin.
She said that halving energy costs is also unlikely due to increasing supply. That is only likely to happen because of some deep demand shock.
“If energy prices are halved,” she added, “something is terribly wrong.”
Tariffs and promises of a ‘national economic renaissance’
And if it’s not oil drilling, Trump is likely to turn to tariffs for how he’d fund his plans.
The former president has promised to levy duties of 10% to 20% on US trading partners and 60% on China if he is returned to the Oval Office.
“It will be a national economic renaissance just by using our heads, by being smart, by not letting other countries take advantage of us,” Trump said recently.
But experts are skeptical on this front too, often noting that such aggressive tariffs could drive up prices and slow the economy.
A recent note from Goldman Sachs underlined those worries, finding that — at least when it comes to the gross domestic product — a Kamala Harris win is the best outcome for economic growth in part because of a “hit to growth from tariffs” that Trump could bring if he wins.
And that’s even with the Goldman analysts projecting that Trump wouldn’t be likely to implement his entire tariff agenda if he wins.
Others have analyzed the impact on prices, with the Peterson Institute for International Economics saying that Trump’s ideas for 60% duties on China and 10% on other trading partners would lead to a typical middle-class household paying at least $1,700 more each year.
Another look from Brendan Duke of the left-leaning Center for American Progress projects an even higher tab of $3,900 for a typical family each year if 60% duties on China and 20% on other trading partners come into effect, a stat that has become a favorite of Kamala Harris.
“Other countries are going to finally, after 75 years, pay us back for all that we’ve done for the world,” Trump maintained at this week’s debate, overlooking the fact that tariffs are actually paid by companies at US ports of entry. The additional costs, economists contend, are usually passed on to consumers.
There are also skeptics of Trump’s idea that tariffs would bring in enough money to pay for other programs. Trump raised tariffs substantially in his first term as president and President Biden has left them largely in place.
But tariff revenue in 2022, the most recent year available, amounted to $111.8 billion in the face of a nearly $2 trillion deficit.
But in any case, it’s barely slowed Trump, who recently promised that his ideas could have the US with “no deficits within a fairly short amount of time.”
Few expect Trump to change tack in the 50 or so days between now and Election Day, but his reliance on these twin proposals is beginning to get at least some political pushback.
His recent exchange on childcare, where he abruptly pivoted to tariffs, made particular waves especially when he seemed to minimize the high costs parents pay.
“As much as childcare is talked about as being expensive, it’s, relatively speaking, not very expensive compared to the kind of numbers we will be taking in,” he said. Girls Who Code founder Reshma Saujani, who asked Trump the question, soon criticized Trump’s response to her query as flippant at best.
“He told us childcare expenses are no big deal,” she said on CNN the next day, adding, “It’s insulting to parents.”
Ben Werschkul is Washington correspondent for Yahoo Finance.
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