How much is Donald Trump costing America’s economy?

Since Donald Trump assumed office in January 2025, the U.S. economy has outperformed its rich-world peers, growing by 2.1% in 2025 compared to stagnation in Germany and modest gains in Britain, France, and Japan. This growth occurred despite policies like mass deportations and trade disruptions, defying expectations of economic decline. The Economist attributes three key factors to this performance. First, AI-driven capital expenditure by Alphabet, Amazon, Meta, and Microsoft reached $350 billion in 2025, rising to $700 billion in 2026, fueling demand for data centers, chips, and software. While total AI-related investment contributed nearly 1% to GDP growth, only about $50 billion represented domestic production, adding roughly 0.2 percentage points to annual growth after accounting for imported hardware. Second, the S&P 500 surged 15% in real terms between Trump’s election and late 2025, injecting $5 trillion into household wealth. Assuming a conservative spending multiplier, this likely boosted consumption by $100 billion, adding 0.3 percentage points to growth. Third, pro-growth policies—including deregulation, tax cuts, and expanded R&D incentives—further stimulated investment and long-term productivity. The analysis suggests Trump’s mixed policies have paradoxically strengthened the economy, though the full impact remains debated. Without these factors, growth might have been slower, highlighting the unintended consequences of his administration’s approach. Independent forecasts indicate lasting benefits from tax reforms, particularly for corporate investment and asset depreciation rules.