Economic Issues May Signal Trump’s Pitfall

Can anything stop Donald Trump?

Maybe the U.S. economy.

Thus far into the race toward the nomination(s) on both sides of the aisle, the focus is on the surprising (and that’s putting it mildly) surge the billionaire has enjoyed in a series of primaries — most recently, of course, South Carolina and Nevada.

And while pundits ponder what Trump’s momentum and the ignominious leave taking of once-GOP heir apparent Jeb Bush mean for the GOP, eventually the conversation should, and will, turn to matters of real policy.

The fact that Trump took South Carolina, a state that has not exactly enjoyed the spoils of an economic resurgence that marked most of the rest of the country, should give pause to those looking to read some tea leaves from the win. The state itself has had a bifurcated economy, marked by blue-collar jobs that have been disappearing and white-collar jobs that have been in place by foreign companies establishing manufacturing strongholds in the state. That led to at least some backlash at the polls this past weekend.

But what would a Trump administration actually do? It’s a bit too early to say. But there’s plenty of Trump critics out there who would assert the potential harm to the U.S./global economy. And with America being situated at the forefront of a world that is increasingly global, the trickle-down effect could bleed into the world financial system. At least that’s one argument.

This also plays a role into the spending power of consumers (and by a number of derivatives, the payments system).

That’s because, in at least some of the scant details Trump has provided, he has made some noise about sending millions of immigrants to leave in a short time. Immigrants that most know often do a lot of the lowest end jobs, even in a service economy, and those jobs – in an economic climate that is close to “full” employment – may simply go unfilled. If, hypothetically, millions – perhaps more than 10 million people — suddenly are not here to work (and as importantly, consume everything from food to larger ticket materials) there’s an argument to be made that GDP would suffer.

And the ripple that might be felt in payments circles? Remittances (now that those people are elsewhere) might also suffer, and so would initiatives that seek to help ease those payments and even help underbanked populations.

Tariffs remain another hot-button issue for Trump (and speak somewhat to the South Carolina backdrop mentioned above). The assumption that Trump would bring negotiating skills to the table to force trading partners to accept tariffs would eventually equate to taxes, indirect ones, on consumers. Commodities have been cheap, and putting tariffs on those commodities and raw materials that would be imported by U.S. companies would help drive up costs. Higher costs would dampen wage increases (and, of course, demand for new workers, which would ease unemployment just a bit), and might even stunt investment in new plants, or innovation in an age where U.S. manufacturing output is less than stellar.

Yes, he’s loud, and, yes, he’s proud. But does Trump have any real selling points beyond momentum? Thus far that question is not easily answered. For now, during primary season, it’s up to the American public to decide.