WASHINGTON — President Joe Biden on Tuesday took credit for building a strong economy out of the ruins of the Covid-19 pandemic — just in time for him to turn it over to President-elect Donald Trump, who is already threatening tariffs that would likely weaken it and bring back inflation.
“The bottom line is, in four short years, we’ve come a long way … from the crisis we inherited,” Biden said in a speech at the Brookings Institution think tank. “I’m not saying it was perfect, but it ends up at this moment the best economy, strongest economy in the world and, for all Americans, doing better.”
The Democrat cited the jobs created under his administration, as well as clean energy and infrastructure projects begun all over the country, and said he hoped the man who both preceded him and will succeed him in the Oval Office does not undo them or follow through with his promised tariffs.
“He seems determined to impose steep universal tariffs on all imported goods brought to this country, on the mistaken belief that foreign countries will bear the cost of those tariffs rather than the American consumer,” Biden said. “Who does he thinks pays for this? I believe this approach is a major mistake.”
Trump, though, appears unlikely to heed that warning. Just after midnight Tuesday, he mockingly called Canadian Prime Minister Justin Trudeau the “Governor” of Canada, which he called a “State.” During Trudeau’s visit days earlier to the Republican’s South Florida country club home, Trump had reportedly told his guest that if he didn’t want tariffs imposed on Canada, his country should consider joining the US as a new state.
“I look forward to seeing the Governor again soon so that we may continue our in depth talks on Tariffs and Trade, the results of which will be truly spectacular for all!” Trump wrote on his Truth Social platform.
For the three years before the pandemic was declared in 2020, Trump claimed — falsely — that he had brought about the best economy in American history.
In fact, it was about the same or, by some measures, not quite as strong as the one built under his predecessor Barack Obama in his second presidential term. More jobs were created in Obama’s final three years than in Trump’s first three.
Obama had come into office amid a deep recession caused by 2008’s global economic crisis but, by the time he left, was overseeing an economy with moderate but steady growth, negligible inflation and low unemployment.
Similarly, Biden took office just past the nadir of the pandemic, with vaccine distribution just having started but thousands of Americans still dying per day. Just over half of the more than 20 million jobs lost early in the pandemic had come back, but unemployment still stood at over 6%.
Four years later, all of the lost jobs have been recovered and 7 million more created. The high inflation that struck during the recovery is back down and near pre-pandemic levels, and unemployment is close to historic lows.
Still, voters made it clear throughout the 2024 presidential election that they preferred their memories of Trump’s economy to what they saw as Biden’s economic realities. The president’s attempts to sell “Bidenomics” in the summer of 2023 flopped, and after Vice President Kamala Harris took his spot in the White House race, the Democratic campaign largely stopped trying to sell the public on Biden’s accomplishments.
Many voters felt their wages had not kept up with the rising costs of groceries and housing. Though official measurements are complicated, they broadly show that this was true in 2021 and 2022 but not true for the latter two years of Biden’s presidency.
Nonetheless, Trump, once again, will be handed a strong economy as he enters office. Early in his first term, he quickly began claiming that the economy he’d been criticising as horrendous during his campaign was instead the best the country had seen in ages.
It’s unclear whether and when Trump might start claiming that the current economy, which he similarly suggested was horrible in this year’s campaign, is instead terrific, all thanks to him.
But what is clear is his intent to impose tariffs on foreign goods, on an even larger scale than he did the first time around.
In his initial term, Trump imposed tariffs on steel and aluminium to help American makers of those metals, but set a wide range of tariffs on products from China, which in turn triggered retaliatory tariffs on American goods.
That hurt both farmers and manufacturers, and caused business investment to fall for two straight quarters in 2019, a warning sign of an impending recession. Trump’s administration was scrambling to unwind the trade war ahead of the 2020 election when the pandemic began and sent the economy into free fall.
This time, Trump is vowing tariffs against China again, as well as possibly imposing tariffs on Mexico and Canada — the two largest trading partners of the US — in apparent violation of the trade agreement that he himself once signed.
Biden’s top economic adviser, Jared Bernstein, said implementing across-the-board tariffs would certainly reverse the positive trends in the economy and bring inflation. “How quickly does that happen? Quite quickly,” he told reporters at the White House, adding that it would be a matter of months, not quarters.
“The president’s speech today is the best advice I can give to any member of the incoming president’s economic team,” Bernstein said.
