President Trump loves the mentioned expressions, promised. Without an important course correction, the president will not succeed in keeping one of his most important promises to the American public – the repair of economic prosperity.
An analysis after the elections of CBS News noted that “two -thirds of voters described the economy as poorly, and those voters who grew up for Trump.” Voters trusted Trump on Harris because life had become priceless and future economic prospects seemed weak. And consistent with these perceptions, the real median family income grew much faster during Trump’s first term than during the BIDen era.
Unfortunately, voters will be seriously disappointed on the basis of the policy that President Trump is striving for. There are many examples. Two of the more disturbing are his obsession with rates and his constant result of American companies.
Starting with the latter, Trump’s targeting of the pharmaceutical industry to which he consistently calls “great Phrma” is disturbing – not only because of its impact at a great economic anchor for the US economy, but also the precedent that it sets for other industries.
As I have tackled earlier, there are problems with the American price determination system that must be corrected. However, the solution is not threats to price checks. Still on July 31star the President “Sent letters to leading pharmaceutical manufacturers who take the steps they have to take to reduce the prices of medicines on prescription in the United States to correspond to the lowest price offered in other developed countries.”
It is important that the president threatened the manufacturers “that if they” refuse to act, “the federal government” will use any tool in our arsenal “” to ensure that the president’s will is enforced. These threats are not so drowned references to the most favorite nation (mfn) proposal proposal.
The MFN determines the price for a medicine at the lowest price charged in other developed countries (OECD), who have each price controls on medicines. The logic for the implementation of the MFN is simple – if patients in the UK, the EU or Canada pay less money for a medicine, that should also be patients in the US.
The only reason that the prices for innovative medicines in many OECD countries are lower than the US is because they impose strict price controls and impose their responsibility for covering the costs of innovation. By force these prices here, President Trump threatens to impose price checks on drugs in the US
By making this policy even worse, the administration consistently complains that “Europeans are freela Weer” and they cover their reasonable part of the costs needed to create innovative medicines. And he is right, but the MFN proposal does not end this freel weighing. It turns the US into a freeloader.
Patients will be high costs if the US will simply become another freeloader that includes reduced availability of medicines for current patients and the hope of new therapies for patients currently living with untreated diseases reduces. Ironically, the policy can even increase total healthcare expenditure, because the reduced availability of medicines will increase the need for more cheap healthcare services such as hospital admissions, operations and visits to emergency department.
Then there is the signaling problem that occurs when the leader of the US government openly threatens US companies. This Kawbonon undermines one of our core-competitive benefits-a pro-growth business environment based on the rule of law.
The president’s obsession with rates – whether it concerns medicines, steel or all imports of a nation – are just as disturbing. Rates are taxes on American households and companies. And with the possibility of storing non-tariff input, the costs for families are now ready to rise. The rates will also increase the costs for consumers for goods produced in their own country because domestic companies are relying on imports to produce better and more affordable products.
When MSNBC Reported: “Procter & Gamble and Walmart explicitly increase prices due to rates.” Small businesses Those smaller margins and less power to absorb the higher costs also increase their prices. Faced with higher costs, households will be forced to consume less.
In particular remarkable, given the focus on lowering the drug costs discussed above, the rates will increase the price of cheaper generic medicines, which account for 90% of all annually prescribed medicines. That is why the President’s rate policy in cross purposes is working on his desire to reduce the costs of drugs for patients.
The higher burden of rates will not only be worn by families, domestic manufacturers and retailers of imported goods also bear some of these costs. These higher costs reduce the profitability of domestic companies in a diverse range of industries, including cars and pharmaceutical products. As the New York Times Reported: “General Motors, Stellantis, Tesla, Mercedes-Benz and Volkswagen have all rates as one of the main reasons why their profit is falling.”
The reduced turnover and lower profitability weaken the economy and the reduction of employment options – as demonstrated by the last job report that so confused President Trump. The lower growing environment will then reduce the amount of investments in the US economy. As a result, households will stagnate their profit growth throughout the country, while their expenses for both imported and their own country will increase products.
Whether it concerns trade or regulatory policy, the Trump government strives for a decided anti-growth policy agenda. The results are fully expected – a weaker economy with slower job growth and decreasing opportunities for families throughout the country. These results break the fundamental promise that candidate Trump made while running for President – to restore prosperity.
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