A dozen ways that the Trump administration is destroying America's economy (Part I)

The candidate trusted by confused voters to improve the nation’s economy is doing precisely what he said he would—and no one should be surprised by the results

Since returning to office barely three months ago, President Trump has waged a seemingly unrelenting “blitzkrieg” on America. My greatest concerns center on his administration’s erosion of rights, freedoms, and the rule of law—but its attacks on the economy seem to have drawn more widespread concern.

This article observes a series of ways in which the Trump administration is destroying not only democracy, but also the American economy and its longstanding role in the global economy. In less than three months, these measures have threatened to unwind 75 years of post-war prosperity.

Ironically, the economic destruction invited by Trump’s policies could do more good for the world than any amount of economic success possibly could. [Note: I’ll save that piece of the analysis for the final post in this continuing series. This introductory post concludes with another piece of bonus content, including video of me debating a senior Trump administration official a decade ago.]

Bizarre expectations

Among the greatest ironies of Trump‘s return to the White House is the seemingly inexplicable view—shared by millions of seemingly oblivious voters—that his governance would somehow be good for the economy.

While his brand has long been associated with garish opulence, Trump’s history as a businessman does not seem to suggest acumen, so much as the fortune of being born to a rich father able to invest hundreds of millions of dollars in a series of more or less fraudulent projects.

The destruction of the American economy may be the most grandiose among them.

The stock market climbed in the days after Trump’s inauguration to near-record peaks, but retreated in the time since then, losing its gains over the past year amidst a series of crashes and short-term recoveries that have no end in sight. While the impacts of that volatility in financial markets may most directly affect the investor class, many working Americans have long grown used to struggling to pay our bills and keep a roof over our heads.

Our ranks are poised to swell immensely.

1. Tariffs driving up costs and driving down business investment

I began drafting this article well before recent stock market shocks revealed how deeply international capital is concerned about the recessionary impacts of tariffs. Americans have been widely relearning the lesson that too many seemed to have skipped in school: tariffs are paid not by the country on whom they are levied, but by domestic consumers of imported goods.

Among all of Trump’s attacks on the global economy, tariffs have drawn the most attention both because they have long been a central tenet of his vision, and also because they most directly affect other countries, and thereby the network of international capital that relies on (whatever passes for) “free” trade. The International Monetary Fund, for instance, has forecast that the Trump tariffs could cost the global economy up to $1 trillion.

Trump’s tariffs threaten to upend the global supply chain across more or less every domestic and international manufacturing industry. Very few domestic industries produce parts entirely within the United States, making the relationship between tariffs and domestic manufacturing something like that of a wrench suddenly thrown into the wheel of a moving bicycle.

Ironically, concerns about corporate globalization and the outsourcing of U.S. manufacturing capacity were ignored in the 90s—not only by Republicans, but by Democrats alike. Now that the outsourcing ship has sailed, the U.S. is particularly vulnerable to supply chain disruptions.

That became clear during the COVID pandemic, when the U.S. suffered shortages of everything from personal protective equipment for hospital workers to automobiles, computer chips and home appliances.

American reliance on imported goods (not to mention labor) suggests that the pain imposed by tariffs will only grow over time. The recent impacts of the Trump tariffs could easily pale in comparison to the eventual economic calamity that will emerge as product manufacturers, unable to secure the necessary supplies to deliver their products to the marketplace, eventually reduce their workforces.

It’s not just large businesses that are impacted by tariffs. Small businesses reliant on any number of upstream goods are also at risk of losing access to crucial supplies, rendering their economic output, as well as the employment of their various workers, at increasing risk.

As bad as tariffs have already proven themselves for the global economy, however, they represent just the tip of the iceberg in terms of how Trump’s governance is destroying the economy of the United States.

2. Foreign tourism is collapsing

Foreign tourism has long offered a shot in the arm of the U.S. economy. According to the U.S. Department of Commerce, international tourists visiting the U.S. supported nearly 10 million jobs, spending over $225 billion in 2023.

In the years before Trump returned to office, 5.1% of the world’s international travelers came to the U.S. Only two countries—France and Spain—drew more visitors. But even still, the U.S. led the world in global tourism receipts: more than 1 out of every 4 dollars spent by international travelers in 2023 was spent within the U.S.

That influx of foreign money is already starting to wither. Motivated by stories of travelers being detained and subjected to mistreatment for no apparent reason—or perhaps due to overt ideological profiling (about which I first raised a public alarm in 2008)—international visitors have increasingly chosen other destinations.

The economic stimulus that they add to the economy has fallen through the floor over the past three months. Based on year-over-year data, foreign tourism last month declined over 11% from the year before. Even if that trend grows no worse in the coming months, it will suck over $22 billion out of the U.S. economy this year.

That would be an optimistic outcome relative to the more likely possibility of continuing erosion.

Bookings from Canada (which sent over 20 million visitors to the U.S. in 2023) have dropped by over 70% since the beginning of 2025. Well beyond Canada, other countries that have recently issued travel warnings to their citizens contemplating travel to the U.S. include Ireland, the Netherlands, Denmark, the United Kingdom, Germany, and Finland.

Countries including Uruguay and Japan had previously issued travel warnings to their citizens based on the disturbing consistency of mass shootings in the U.S. But never have so many countries warned their citizens against traveling here.

The loss in America’s diplomatic standing in the world may seem lost on Americans who prefer to isolate from the international community. But the impact of travelers choosing other places to spend their—tens of billions of—vacation dollars will impose ripple effects throughout the American economy, particularly in states that depend on tourism.

3. Intensifying labor shortages increasingly limit vulnerable industries

Every day, new stories emerge about ideological, racial, and ethnic profiling by federal immigration authorities. In addition, the previous process through which asylum seekers could seek long-term permanent residency has also been effectively shut down, closing one of the few legal pathways available to newcomers.

Each of these stories reflect an outrageous pattern of ignoring individual rights, as well as the broader rule of law. But they also indicate an economic problem that will continue to expand and cascade.

Across the United States, immigrants play disproportionate roles in several industries, including the service industry, construction, and agriculture.

For example, in Florida, nearly 30% of jobs are held by immigrants (including both legal and undocumented migrants). Yet, despite its reliance on immigrant labor, Florida is has integrated local law enforcement with federal immigration enforcement to a greater degree than any other state.

Source: The Guardian US, available at https://www.theguardian.com/us-news/ng-interactive/2025/apr/30/trump-local-police-immigration

Community advocates across Florida warned in 2023, when the state adopted a law to strengthen immigration enforcement, that instilling fear among immigrant workers would threaten the state’s economy.

Two years later, state policymakers have introduced measures to legalize child labor, with no proposed restrictions that would prevent employers from scheduling employees as young as 14 years old for unlimited hours. The proposals mandate neither breaks, nor accommodations for school.

Florida may demonstrate the greatest economic vulnerability to deporting migrant laborers, but the rest of the country will also learn similar lessons.

Around the country, immigrants account for roughly 30% of workers in the construction industry, and 40% of the industry’s workers in California and Texas. Rather than occupy positions for which American citizens have been turned down, immigrant workers play a key role in providing human resources that the industry has found in short supply. In April 2024, the Associated General Contractors of America stated that “labor availability has resumed being the number one challenge for many contractors.”

Academics have confirmed that impression, and also explained why the pattern was thoroughly predictable. Yongwei Shan, assistant professor of Construction Engineering & Project Management at Oklahoma State University, explained that “fewer young people really want to work in the construction field because jobs are more physically demanding and construction job sites are more hazardous and exposed to weather. This might be [one] reason why you see fewer U.S. citizens and more migrants in the construction fields.”

Driving construction workers out of the country is a bad enough idea in the abstract. Doing so in the wake of various climate-related disasters devastating communities from coastal California to the hills of Appalachia is especially harmful—not just to the ranks of immigrant laborers denied opportunities, and their families, but also the communities they serve that will continue to struggle to recruit labor for critical projects, from municipal infrastructure to rebuilding damaged and destroyed homes.

4. Firing public workers has swelled the unemployment ranks

Public spending in the U.S. has historically comprised as much as 45% of GDP. It would account for an even greater fraction if evaluated not only in direct expenditure, but also in the indirect spending by millions of public sector workers—from scientists to military service members, and from teachers to park & forest strangers—employed by the tens of thousands of various local, state, and federal governments across the U.S.

While the Trump-Musk administration has framed its cuts to spending policies and mass layoffs and firings as an effort to increase efficiency, nowhere does there appear any recognition of the profound impact of leaving hundreds of thousands of federal employees jobless.

Over 60,000 federal workers were fired within the first two months of the new administration.

In direct terms, firing tens of thousands of federal workers removes from the economy all of the otherwise predictable spending by those employees, and their families, that would have supported the businesses and local economies where they live. Many of those workers have been ordered by courts to be reinstated, but it’s not clear whether the administration is willing to comply with court orders. Even those workers whose jobs do survive future legal appeals will probably spend much less on discretionary purchases until their employment appears more secure.

Every dollar that Trump & Musk claim to have “saved” through a layoff or firing is also an example of economic stimulus being removed from the consumer economy.

This series will continue with an analysis of further ways that Trump administration policies are undermining America’s economy.

In the meantime, paid subscribers can access a further section below that includes video of my debate with Trump’s counterterrorism czar, Sebastian Gorka. Gorka recently proposed terrorism charges for political opponents, 14 years after I debated him on an international television news network about indefinite detention and civil liberties issues ignored at the time by Republicans and Democrats alike.