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E-mail Xinhua, December 28, 2024
by Xinhua writers Liu Yanan, Xiong Maoling, Deng Xianlai
WASHINGTON/NEW YORK, Dec. 27 (Xinhua) -- Frustrated by years of political and economic dissatisfaction, American voters made their choice in the 2024 general election, which was marked by a number of twists and turns.
"Polarization," chosen by the U.S. dictionary Merriam-Webster as word of the year, is a word that has been used incessantly to describe the fraught state of American politics and society.
While inflation has eased, high prices continue to strain consumers. As U.S. President-elect Donald Trump has promised to impose steep new taxes on trade, "at least a dozen estimates on Trump's proposed tariffs show they will have a harmful effect on the American economy," said the Tax Foundation, a research center that focuses on tax policies.
A second Trump administration will not simply be a replay of the first. The United States is likely to see new policies across various sectors, with foreign policy among the first areas to undergo changes.
POLITICAL UNCERTAINTIES
The U.S. political landscape in 2024 has been marked by unprecedented events: the conviction of a former president, a sitting president bowing out of the reelection race, and assassination attempts on a presidential candidate.
Given the red sweep in the 2024 general election, the United States is expected to see initiatives to implement various policy changes. Many of these plans have already been outlined during the campaign, but the real challenge lies in their execution and timing. Though Republicans control both the House of Representatives and Senate, this won't guarantee a smooth passage of Trump's agenda.
The quickest way to enact change is through executive power, and the president-elect has been preparing a series of executive orders to be signed on day one of his administration.
Among these are plans to deport large numbers of undocumented immigrants, impose tariffs on key trading partners, and pardon most of the January 6, 2021 rioters. He is also pushing to prosecute former Republican Representative Liz Cheney and other members of the January 6 committee.
Key cabinet appointments offer further insight into the scope of change. Notably, the Department of Government Efficiency (DOGE), a proposed advisory body led by Elon Musk and Vivek Ramaswamy, is working on plans to slash federal spending by up to 2 trillion U.S. dollars by mid-2026. This could impact agencies like the Pentagon, the Department of Education, the Internal Revenue Service, the Federal Trade Commission, the Department of Justice, the Securities and Exchange Commission, the Consumer Financial Protection Bureau, NASA, the Corporation for Public Broadcasting, Planned Parenthood, as well as grants to international organizations.
The U.S. Department of Education faces the risk of disbanding while about 228,000 federal employees or 10 percent of the total won't be allowed to work from home under DOGE's plan.
Once confirmed, Robert F. Kennedy Jr., nominated to head the U.S. Department of Health and Human Services, could swiftly replace around 600 employees at the National Institutes of Health.
Even before taking office, Trump has wielded his political power to oppose a bipartisan funding bill. The budget chaos is a just preview of political uncertainties ahead.
RISKS LOOM OVER ECONOMY
In 2024, the U.S. economy has outperformed many other developed nations. However, underlying structural challenges, questionable economic drivers, and upcoming policy shifts are raising concerns about long-term stability.
According to the International Monetary Fund (IMF), the U.S. economy is expected to grow by 2.8 percent in 2024, outpacing the average 1.8 percent growth for other developed economies.
Personal consumption, which accounts for over two-thirds of the economy, remains a key driver of growth. While job growth has slowed, it continues to support steady consumer spending, fueled by pent-up demand following the pandemic.
However, this momentum may slow in 2025, with consumer spending growth expected to ease from 2.7 percent in 2024 to 2.2 percent as slower job gains and persistent high prices and interest rates take their toll.
Meanwhile, the United States has capitalized on global crises to boost its economy. By dominating the arms industry and securing energy deals with Europe, it has been able to extract wealth from international markets.
Financial hegemony has also played a key role in bolstering the U.S. economy. The global dominance of the U.S. dollar has led global investors seeking safe havens amid geopolitical instability to flock to U.S. financial markets.
The U.S. economy could face risks including headwinds from rising inflation and worsening federal debt issues in 2025, analysts have said.
One major risk is the promised large-scale deportation effort by Trump, which could have a far higher economic cost than anticipated. A mass deportation program could leave as many as one million difficult-to-fill potential job openings, and the U.S. gross domestic product (GDP) would shrink by 1.1 trillion to 1.7 trillion dollars, CNBC said, citing experts and research reports.
Tariffs also pose a risk. Economists generally agree that broad tariffs on trade partners would drive up prices, burdening U.S. businesses and consumers, potentially fueling inflation, disrupting the Fed's interest rate cuts, and increasing market volatility.
The U.S. government's reliance on borrowing, fueled by the dollar's global dominance, has led to a mounting federal debt now exceeding 36 trillion dollars. Trump's proposed tax cuts could exacerbate this issue, creating even greater economic risks both domestically and globally.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, told Xinhua that Trump's planned tax cuts would boost the annual fiscal deficit by 800 billion dollars, to reach around 2.4 trillion dollars annually, and raise interest paid on the debt to about 2 trillion dollars annually in 2034.
MIRED IN TWO REGIONAL CONFLICTS
On the foreign policy front, 2024 sees the United States remain deeply mired in two major regional conflicts with far-reaching global ramifications.
While staunchly defended by its architects, the Joe Biden administration's handling of both the ongoing Ukraine crisis and the escalating Middle East conflict has drawn increasing criticism from world leaders and international pundits alike.
Biden's approach to Ukraine, which included committing over 63.5 billion dollars in military aid since 2021, has been staunchly defended by his administration but faces growing backlash. His pledge to support Ukraine "for as long as it takes" has been met with skepticism, especially as the conflict continues to drag on. Some U.S. officials, speaking anonymously to Bloomberg, suggested that the outcome for Ukraine might be much the same, regardless of whether Biden or Trump takes charge.
The Mideast conflict, particularly Israel's war in Gaza and its spillover into Lebanon, has added to the administration's struggles. The U.S. failure to effectively manage these crises, compounded by the repeated clashes between Israel and Iran, hurt the Democrats politically. Many Arab American voters, frustrated with the administration's handling of the situation, have either defected to the Republicans or chose not to vote at all, costing the Democrats critical support in the 2024 election.
Meanwhile, Trump, set to take office in less than a month, has sharply criticized Biden's Ukraine strategy, saying that he could resolve the conflict within 24 hours, though he has yet to outline a specific plan.
Beyond these high-profile conflicts, the Biden administration's diplomatic efforts in other parts of the world, like Africa, have received less attention and produced mixed results. Biden's December visit to Angola, the first by a sitting U.S. president in nearly a decade, was seen as a belated attempt to repair relations with African nations frustrated by a lack of attention from Washington.
Looking ahead, it remains to be seen how the Trump administration will navigate U.S. obligations to its allies and international organizations. Any withdrawal from existing cooperative frameworks could trigger significant repercussions across borders. Enditem
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