Chief Economists Outlook January 2025

15Chief Economists Outlook 28 The Economist. (2024a). 29 In February 2024, Donald Trump announced that he would increase tariffs on all goods from China by 60% and introduce new tariffs of 10% across the board (Piciotto, 2024). In November 2024, he clarified that he would introduce 25% tariffs on goods from Mexico and Canada and an additional 10% on all Chinese goods coming into the US (Pitas, 2024). 30 U.S. Bureau of Labor Statistics. (2024). 31 Goudreau, C. (2024).Figure 7. Policy outlook In which US policy areas do you expect to see the most significant changes under the new US administration? Source: Chief Economists Survey. (2024, November).Share of respondents (%)6 6 3 333 3 3368 26 Foreign policyTrade policy Migration policy Regulatory policy41 50 59 32 6 58 33 3 3 67 15 15 50 2912 15 9 68 6 3 Monetary policyFiscal policy Industrial policyVery insignificant Insignificant Neutral Significant Very significant If fully implemented, the new administration’s campaign agenda would be a significant departure from current economic policy.28 However, there remains a high degree of uncertainty over the extent to which the campaign agenda will be implemented. For example, while 68% of the chief economists expect very significant changes to trade policy, more than 90% expect that new US tariffs will be smaller than the ones promised during the presidential campaign (see Figure 15).29 Caution is needed, therefore, in anticipating the likely magnitude of changes in 2025 and beyond. One potential restraining influence on policy could be consumer prices, which were a central issue during the presidential campaign. The evidence suggests that many voters were less concerned with the decelerating rate of change of prices (consumer price inflation had fallen to 2.7% in November 202430) than with their cumulative increase (around 20% over the four preceding years).31 It is therefore at least possible that the new administration will not want to risk being associated with a renewed period of rising prices. Nevertheless, among the chief economists, 94% expect the inflation rate to increase under the new administration (see Figure 8), with the proportion expecting high inflation in 2025 doubling since the last survey (see Figure 3).