Donald Trump said earlier this year that if he were to be re-elected, “incomes will skyrocket, inflation will vanish completely, jobs will come roaring back, and the middle class will prosper like never before”.

The majority of US voters have bought into that pitch, but many economists do not.

Instead, they warn that his plans to enact sweeping tariffs and deport millions of immigrants risk will do the exact opposite of what the president-elect claims — reigniting inflationary pressures when the worst bout for a generation has yet to be fully tamed.

While stock markets were boosted by Trump’s pledge to lower taxes for the wealthy and corporations, others think those moves will store up issues for years to come, expanding the already-large government deficit.

Add to that the US president-elect’s threats to meddle with the US central bank, and many think Trump’s second term in the White House could spell trouble for the world’s largest economy.

“These kinds of policies — deportation, incursions on Fed independence, tariffs on an unprecedented level — they all inject additional uncertainty into the economic environment,” said David Wilcox, a former Federal Reserve staffer who now works at the Peterson Institute for International Economics.

“There’s not much these days that unites businesspeople, households and policymakers,” said Wilcox. “But there is one concept that does unite just about everybody, and that is that uncertainty is really damaging economically.”

The economists who support Trump’s economic agenda — figures such as Stephen Moore, Arthur Laffer and Larry Kudlow — believe his tax cuts will boost demand. Their impact on growth will raise tax revenues, shrinking the country’s gargantuan deficit in the process.

Others think the lower levies could provide a short-term boost to growth too.

“Trump’s victory will ensure a lower tax environment that should boost sentiment and spending in the near term,” said James Knightley, economist at ING Bank. “However, promised tariffs, immigration controls and higher borrowing costs will increasingly become headwinds through his presidential term.”

While inflation is not fully under control, the president-elect will take the helm at a time when the world’s largest economy is, by most metrics, in rude health.

Jobs are plentiful, lay-offs are low and consumers continue to spend, despite a surge in US interest rates, which — until recently — left borrowing costs at a 23-year high. Once rampant, recession fears have faded as inflation has fallen from above 7 per cent to close in on the Fed’s 2 per cent target, suggesting a much-anticipated soft landing is within reach.

“The economy is still pretty solid,” said Karen Dynan, a former senior Fed staffer now at Harvard University. “We’re getting much closer to normal inflation conditions [and] nothing suggests the labour market is in a worrisome spot.”

Republicans captured control of the Senate on Tuesday and have made inroads in several House of Representatives races that will need to swing to Democrats if they are to win the lower chamber of Congress.

If Republicans are victorious there too, Trump would have much more leeway to push through even the most unorthodox parts of his economic agenda.

Trump’s plan centres on sweeping tariffs that he claims will not only bolster US manufacturing, create jobs and lower prices, but will also hand the country a powerful bargaining tool in negotiations with allies and adversaries.

Calling such levies the “greatest thing ever invented”, Trump has floated the idea of across-the-board tariffs of up to 20 per cent on all imports as well as 60 per cent tariffs on Chinese goods. 

He has said he will pair those plans with what he has deemed the “largest deportation programme in American history”. If the president-elect enacts that programme — shrinking the US labour force in the process — economists warn that could force up wages and undo some of the work the Fed has done so far in terms of tackling inflation.

Şebnem Kalemli-Özcan, an economist at Brown University, predicts that unemployment could also rise as businesses are forced to cut back in the face of higher costs borne from tariffs and higher wages resulting from changes in immigration policy.

“These policies are pushed as policies that will create more jobs for Americans, but the effect is going to be the exact opposite,” said Kalemli-Özcan.

The US central bank, which began lowering borrowing costs in September, would potentially be forced to reverse course should price pressures re-emerge.

During Trump’s first presidency, the Fed responded to an intensifying trade war between the US and China by lowering interest rates by 0.75 percentage points, in what it likened to taking out insurance against the possibility of a significant blow to growth.

But with the embers of inflation not yet fully snuffed out, the policy response could look different from in 2019, when inflation was below the Fed’s 2 per cent target.

The tariffs and immigration restrictions Trump put in place during his first term did not generate significant inflation, but they were of a far smaller scale than what the president-elect has proposed for his next four years in office.

In his first term, Trump repeatedly attacked the Fed and its chair, Jay Powell, for not lowering interest rates earlier and more aggressively. This time, he has floated more direct interference with the central bank, including advocating for having a greater say over monetary policy decisions. 

The Fed has “a lot of legal and institutional safeguards” to protect its status as an independent institution, says Vincent Reinhart, a former Fed official who is now chief economist at Dreyfus and Mellon. That includes extended term limits for governors, whose appointments require Congressional approval.

Powell’s term as chair ends in May 2026, and before that there is only one other vacancy on the board of governors that year. The next opening would not come up until 2030, when Christopher Waller’s term expires.

Still, any indication that the Fed’s independence is being eroded could have severe financial market consequences — a growing fear given the enormous deficits the country is set to run during Trump’s second term.

The US president-elect’s vow to extend tax cuts on the wealthy that are set to expire in 2025, as well as reducing the corporate tax rate for domestic producers and exempting certain forms of pay from income tax, would add a further $5.8tn to the deficit over the next decade, according to the Penn Wharton Budget Model at the University of Pennsylvania.

“The conversation we need to have as a nation is about getting fiscal policy on to a sustainable trajectory. The first step in addressing that problem is not to enact an aggressive programme of additional spending or aggressive tax cuts,” said Wilcox, who is also the director of US economic research at Bloomberg Economics.

“Trump has made it clear that he has no concern whatsoever for fiscal sustainability.”

Additional reporting by Sam Fleming in London

IF YOU already own a business or are thinking of starting one, you’ll understand how important it is to find and retain new customers.

Hurst Group provides all kinds of businesses access to the UK’s most trusted media, potentially connecting you with millions of potential clients or customers.

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Hurst Group’s three media divisions – Hurst Media Company, Hurst Media Agency and Hurst Media Labs – cover every corner of marketing, supplying advertising that builds trust with brands and their customers.

Hurst Media Company specialises in trusted media publishing and helps SMEs advertise to readers of national newspapers and lifestyle magazines (including those on their websites) through promotional content curated into features across 50+ themes including Homes & Gardens, Food & Drink, Health & Wellbeing, Financial & Legal, Mum & Baby and many more.

The client buys space within a themed feature before providing words and images about their products and services. Hurst then checks the content against the Advertising Standard Authority’s CAP code to ensure copy is compliant, sub-edits to make messaging clear and effective, and then designs the copy to the client’s exact approval.

Each advertorial is then set within a themed feature of the client’s choice, with the client able to choose which feature in which national newspaper, magazine or website they want to be in.

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Hurst Media Agency specialises in trusted media planning and buying across all media channels, including print, digital, television, radio and outdoor. It is a full-service, multi-channel, direct response advertising agency.

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They’ll become an extension of your teams, using their expertise and industry knowledge to create designs that drive results and are delivered in a timely fashion.

How Hurst helped Diamond Box reach its target audience

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Previously relying on saturated social media and pay-per-click advertising, this family-owned luxury jeweller saw declining results in the business.

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Hurst Group provided Diamond Box with innovative content marketing and digital advertising solutions across major publishers including SunOnline.

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Digital

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Hurst Group handles all your digital needs, helping to amplify your business’ voice above that of your rivals.

Hurst offers comprehensive digital advertising solutions, including search ads, display ads, social media ads and video ads. 

Search, display or banner ads appear on websites and Apps, in standard sizes defined by the Internet Advertising Bureau (IAB). 

Social media ads appear on platforms such as Facebook, X, TikTok, Instagram, and LinkedIn, in various formats and placements, and will often feature creative content to keep potential customers engaged.

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Out of Home

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Out-of-home advertising encompasses any advertising that people encounter outside their homes, which could include common forms of media like printed billboards.

These range from small 6-sheets at bus stops and shopping centres to larger scale 96-sheets at major road junctions and motorways.

Digital screens have become increasingly prominent, with 64% of OOH revenue coming from the UK’s 27,000 digital displays. 

But it’s not only limited to bus stops and big screens at shopping complexes.

Additionally, OOH includes ads on buses, trains, trams, and taxis, both inside and outside.

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If you prefer traditional forms of advertising, Hurst offers clients access to all forms of print advertising, including display and classified ads in newspapers and magazines. 

Print media is a highly credible source, meaning that many consumers are more likely to pay attention to ads because they’re coming from a reputable source – essentially providing a “halo effect” for the products or services being advertised.

Display ads appear in the main editorial sections, while classified ads are grouped under specific headings, for example, Motors, Travel, and Property. 

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Undoubtedly, the key benefits of TV advertising include its extensive reach which engages audiences with sound and visuals. Frequent ad breaks reinforce messages and offer precise targeting and ease of access. 

Learn more about how Hurst Group can build you a trusted advertising campaign at hurstmediacompany.co.uk  

Welcome back. Donald Trump’s presidential election victory is a major development for the energy transition and the broader response to climate change, in the US and globally.

The Trump campaign has said he would once again pull the US out of the Paris Agreement, which commits nations to efforts to keep global warming below 2C. That prospect last week caused UN secretary-general António Guterres to raise the prospect of a “crippled” Paris accord.

Trump’s team has also drafted an executive order that would remove the US from the UN convention on climate change altogether, according to a report by Politico. His impending return will cast a thick shadow over the UN’s COP29 climate summit, which starts in Azerbaijan on Monday (we’ll be there reporting from the ground, as usual).

Trump’s likely approach to domestic clean energy policy has been a subject of heavy speculation. He’s promised to reverse key elements of President Joe Biden’s clean energy policy, which he’s labelled the “green new scam” — notably, pledging to withhold funds not yet deployed under Biden’s green-orientated Inflation Reduction Act.

But given the disproportionate benefits that Republican-led states have received under that legislation, it’s far from a given that the Trump administration will gut the IRA completely. And — while shares in the sector plunged in pre-market trading this morning — it’s worth remembering that US renewable energy investment grew strongly during Trump’s first term, despite similar anti-green rhetoric from the White House.

In today’s newsletter, Patrick helps us make sense of where US energy policy stands as the Biden administration approaches the finish line. We’ll be back in your inbox on Friday. — Simon Mundy

US climate policy

The legacy of Biden’s landmark climate legislation

As Joe Biden starts preparing to hand back the White House to Donald Trump — who is likely to take a radically different approach to energy policy — it’s a good moment to take stock of the outgoing administration’s record on this front.

While the US energy and transport sectors have been the biggest contributors to US emissions during Biden’s administration, the president’s efforts have taken square aim at these industries. Faster permitting has helped investment in grid-level battery storage to jump sixfold since 2020, supporting the growth of renewable generation. The IEA projects that renewables will make up 34 per cent of the energy mix by 2028, up from 22 per cent in 2023.

The centrepiece of Biden’s climate policy was the 2022 Inflation Reduction Act that allocated $369bn to spur green infrastructure and decarbonisation. Two years on, at least 3.4mn Americans have taken advantage of the law’s tax credits for energy efficiency, according to the White House, and companies have announced more than $265bn in clean energy investments. Since January, more than 250,000 Americans have claimed electric car tax credits.

However, some projects set to benefit from Biden’s policies, including the IRA and Chips Act, have not yet come to fruition. Up to 40 per cent of the biggest US manufacturing investments announced in the first year of the flagship industrial and climate policies have been delayed or paused, the FT reported in August.

The largest projects on hold include Enel’s $1bn solar panel factory in Oklahoma, LG Energy Solution’s $2.3bn battery storage facility in Arizona and Albemarle’s $1.3bn lithium refinery in South Carolina. But the IRA will not be the only lasting part of Biden’s legacy.

The $1.2tn bipartisan infrastructure law, signed in November 2021, included $11.3bn for cleaning up abandoned mines and another $1bn for capping abandoned oil and gas wells across the country. Abandoned wells such as these leak methane, a greenhouse gas far more potent than carbon dioxide.

“Under the Biden administration tremendous progress was made in determining just how big the problem of oil decommissioning is in the US,” Javiera Barandiarán, a professor and co-director of the Center for Climate Justice at the University of California, told me.

“The Biden administration provided funding that has helped map the scale of the decommissioning challenge, which deserves to be front-and-centre in climate change and energy transition policies,” Barandiarán said.

Still, aspects of Biden’s climate policies have been hampered by the US’s creaky infrastructure. 

“The largest thing left unfinished . . . is really around permitting, interconnecting and transmission,” William Anderegg, director of the Wilkes Center for Climate Science and Policy at University of Utah, told me.

Despite Biden’s focus on climate policy, some Democrats quietly acknowledge that his administration’s work on clean energy have had limited impact on the electorate. Just 37 per cent of voters ranked climate concerns as “very important,” according to a September survey from the Pew Research Center.

“Very few Americans know that the IRA is the most significant climate policy the US has ever seen,” Alexis Abramson, dean of the engineering school at Dartmouth College, told me. “Remarkably, our country passed this legislation at a time when political polarisation has deepened.”

“Most [people] do not realise that there are elements of the policy that help ensure that more disadvantaged areas of the country disproportionately can take advantage of incentives and subsidies,” she said. For example, there were energy tax credits for renewable energy projects in areas that had been economically reliant on fossil fuels, she said.

Despite his support for clean energy, Biden has also overseen a surge in US oil production to record levels, and some green groups have attacked his administration’s permissive approach to fossil fuel production from federal lands, and approval of projects such as the Mountain Valley Pipeline running from West Virginia to Virginia.

But for some environmentalists, Biden’s green efforts will go down as the most significant since the US Clean Air Act and Clean Water Act of the 1960s and 1970s. 

“President Biden is the greatest president ever for climate and environmental action,” the Sierra Club said on the day Biden withdrew from the presidential race in July. “Biden’s legacy as the greatest president for climate and environmental action is etched in stone.”

Given the US’s position as the world’s second-biggest energy consumer, Biden’s approach to energy policy has had a global impact.

After a jump in emissions as the US economy emerged from the Covid-19 pandemic, emissions figures for 2023 showed a decline, returning to a downward trend that had been apparent for years, Anderegg told me.

“Some of [Biden’s] recent climate policy probably is starting to have an impact,” he said, adding that emissions were likely to decrease again in 2024 and continue as long as Biden’s policies remain intact. Biden’s presidency “has been one of the most impactful in terms of climate policy and laying the foundation for transition to a net zero economy in the US,” Anderegg said. (Patrick Temple-West)

Smart reads

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Delta blues The FT visits the Niger Delta to explore an expensive question for international oil companies: who will pay to clean up their mess when they close operations in the region?

Wild money Virtual wallets for non-human species should be part of a new approach to biodiversity finance, argues Jonathan Ledgard, founder of “interspecies money protocol” Tehanu.

Dutch artist-designers Kiki van Eijk and Joost van Bleiswijk have an enviable working partnership. Based in Eindhoven, the Netherlands, the husband and wife co-direct the studio Kiki and Joost. But when it comes to their projects, they work separately, producing sculptural furniture that reflects their distinct skills and aesthetic tendencies.

Van Eijk, 46, has a rich imagination and an eye for detail. She develops tactile furniture, objects and textiles infused with emotion, narrative and a sense of whimsy. The work of van Bleiswijk, 48, is more architectural: his furniture and lighting combine ambitious volumes with clever construction details. The contrast underpins the success of their collaboration, inspiring and challenging one another. “The basis is that we keep each other free,” says van Bleiswijk. “There is no ego involved; we just want to help each other,” adds van Eijk.

The pair have just opened the doors of a new joint endeavour. At their canalside studio, a 1,000 sq m former industrial site in the east of the city, they have built themselves an exhibition gallery. It marks the realisation of a dream that started taking shape when van Eijk and van Bleiswijk bought the property in 2019. After eight studio moves in 18 years, they wanted a permanent space that would give them freedom to design, make and exhibit their creations.

Their first step was to install a workshop, filled with machines for cutting, shaping, drilling and welding, and drawers stocked with every kind of handheld tool imaginable. “If you have to go somewhere else every time you need to cut a piece of wood, you cannot be expressive,” says van Bleiswijk.

The gallery is the final piece of the puzzle. Featuring a modular Douglas fir structure, a plywood interior and full-height cupboards that double as extra show space, it allows the couple to present works immediately after they have made them. “It’s a direct transformation from workshop to exhibition,” adds van Eijk. “It means we can work fast and show things when the paint is still wet.”

Not everything has to have an end goal; sometimes it’s good to just go for it and see what comes out

Exhibitions have always been central to the Kiki and Joost identity. The couple met as students at Design Academy Eindhoven (DAE). Van Eijk graduated in 2000, followed by van Bleiswijk in 2001. It was a time of crisis for Eindhoven; electronics group Philips — which once had around 100,000 staff here — had just closed its factory, leaving major unemployment in its wake.

In a bid to put the city back on the map, DAE decided to stop staging its end-of-year show in Amsterdam, as it had done for the past decade, and stay local instead. Van Eijk and van Bleiswijk saw this as an opportunity to make a name for themselves. In 2002, the pair rounded up some designer friends and put on a coinciding exhibition titled Greetings from Eindhoven, promoting the city as a hub of burgeoning talent and enterprise. “We wanted to make a statement,” says van Eijk.

The couple have exhibited in Eindhoven every year since then, including in the provocative Design Sucks group show in 2003 and the punk-themed London Calling in 2006. Other creatives did the same, providing the foundations for what is now Dutch Design Week, a festival that takes over the city for nine days every October. It enabled Eindhoven’s resurgence as an international design hub and cemented Kiki and Joost’s reputation within it, alongside fellow talents such as Piet Hein Eek, Maarten Baas and Nacho Carbonell.

If there is one thing that unites their work, it’s an ethos of “learning by doing”. They both believe in the power of serendipity, of experimenting with materials without a fixed idea of what the result will be. “Not everything has to have an end goal; sometimes it’s good to just go for it and see what comes out,” says van Eijk. This approach is evident in their latest works, which they unveiled in the new gallery during this year’s Dutch Design Week.

Van Eijk’s offerings included “Sprout”, a set of plant-inspired vases combining blown glass with a Japanese ceramic technique called raku, which she uses to create graphic patterns, and “Stripes and Bubbles”, a blanket inspired by the same glazing process. Van Bleiswijk showcased “One Sheet”, a series of shelving units made by cutting and folding single sheets of steel, and “Funky Punky”, a collection of furniture formed from neon-painted shards of leftover plywood. 

The couple’s creative pursuits don’t end in the studio. Their home, a converted 19th-century barn on the edge of the city, is their most ambitious project to date. The structure was barely standing when they took it over. They effectively constructed a new building behind the old brick facade, framed by exposed timber trusses. It gave them an expansive double-height living room and kitchen, which they have filled with furniture by themselves and other leading Dutch creatives.

A highlight is van Bleiswijk’s “Construction Lamp”, a Meccano-esque design for Dutch furniture label Moooi, which creates a playful juxtaposition with the custom Lego station installed for the couple’s two young sons.

With the exhibition space now complete, van Eijk and van Bleiswijk are already looking ahead. Since 2021, they have run a DAE teaching unit of their own called Thinking Hands, where they encourage students to follow their experimental approach. In January, these students will showcase their own work in the Kiki and Joost gallery.

The duo have also been working with the municipality on a vision to transform the entire neighbourhood into a “design haven”, attracting more creatives to the area. “We hope we can inspire by doing this,” van Eijk says. “Eindhoven is rapidly growing — there is still momentum to do things here.”

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