Shares in Trump’s social media company spike after president-elect says he won’t sell stake

(NEW YORK) — In the final weeks of the campaign, former President Donald Trump and Vice President Kamala Harris have sought to best each other on the all-important issue of the economy, which many voters rank as their top concern.

Both candidates have made manufacturing a centerpiece of their plans, but their respective approaches feature stark differences.

Harris aims to close corporate tax loopholes and throw government support behind the production of critical goods. By contrast, Trump wants to protect domestic manufacturers with tariffs on foreign products while cutting corporate taxes and easing regulations.

Manufacturing accounts for about 10% of U.S. gross domestic product and an even smaller share of the nation’s jobs. But the sector bears outsized importance since the production of essential goods holds national security implications and many manufacturing workers live in key swing states, experts said.

“There’s a belief that manufacturing is special,” Mary Lovely, a senior fellow at the Peterson Institute for International Economics who studies trade policy, told ABC News.

Here’s what to know about where Harris and Trump stand on manufacturing, and what experts think of their respective plans:

Trump: Tariffs and corporate tax cuts

On the campaign trail, Trump talks about tariffs more than just about any other policy proposal. The tax on imports makes up a key part of his plan for revitalizing manufacturing, alongside a lower tax burden for companies that he says would boost production and hiring.

Trump has promised a sharp escalation of tariffs enacted during his first term. Trump has proposed tariffs of between 60% and 100% on Chinese goods. A set of far-reaching tariffs would also include a tax as high as 20% on all imported products.

In theory, a tax on imports would give domestic producers a leg up in competition with foreign manufacturers, Christopher Conlon, a professor of economics at New York University who studies trade, told ABC News.

“His plan is based on the idea that foreign competitors are pricing their products too low and what we need to do is erect a wall of tariff barriers around the U.S.,” Conlon told ABC News.

An escalation of tariffs could expand certain areas of U.S. manufacturing vulnerable to foreign competition, which could result in added jobs at companies protected by the policy, experts said.

The economy added manufacturing over the first few years of his presidency, though the pandemic wiped out much of those gains.

Experts cautioned about a spike in input costs and consumer prices that could end up hindering many manufacturers and hammering household budgets. Evidence indicates that the Trump tax cut did not provide a significant boost for the economy, they added.

U.S. manufacturers of sophisticated products like automobiles and advanced medical equipment often import raw materials. A tariff would likely raise costs for those companies and risk making them less competitive on the global market, Conlon said. While adding jobs at some manufacturers, the policy could cause layoffs at others.

“Nobody seems to have shared that wisdom with the Trump campaign,” Conlon said.

A similar cause and effect applies to prices paid by everyday people for imported goods at the grocery or department store. Broad tariffs on foreign goods would likely force importing companies to raise prices and reignite inflation, experts said.

In a statement to ABC News, the Trump campaign said its manufacturing plan would create jobs and cut taxes.

“President Trump is a businessman who built the greatest economy in American history, and certainly doesn’t need economics lessons from a professor who has never created jobs or built anything in his life,” Trump campaign spokesperson Karoline Leavitt said.

“President Trump successfully imposed tariffs on China in his first term AND cut taxes for hardworking Americans here at home — and he will do it again in his second term. President Trump’s plan will result in millions of jobs and hundreds of billions of dollars returning home from China to America,” the statement added in part.

Harris: Close tax loopholes and provide government support

Harris has proposed a different approach to manufacturing that emphasizes closing tax loopholes for some large corporations and providing government support for high-priority areas within the sector.

The agenda carries over a key part of the strategy undertaken by the Biden administration, which invested billions into manufacturing through a series of measures focused on bolstering key industries.

The Inflation Reduction Act spent hundreds of millions of dollars to boost U.S. production of renewables as the nation pursues ambitious carbon emissions goals and a supply chain less dependent on China. While the CHIPS and Sciences Act infused tens of billions into the production of semiconductors.

“The Biden administration has picked sectors, and in those sectors companies are eligible for assistance,” said Lovely.

Last week, Harris put forward a plan calling for $100 billion investment in manufacturing to further bolster the sector. The policy would prioritize “industries of the future,” such as carbon-efficient steel production and data centers for artificial intelligence, the campaign said in a statement last week.

The Harris campaign said it aims to pay for the investment with a reform of the international tax code that prevents producers from skirting U.S. taxes in a “race to the bottom.”

“The facts are clear: When he was president, Trump lost nearly 200,000 manufacturing jobs and created new incentives for companies to ship American jobs to China. Economists warn if Trump takes power again, his policies will crush American manufacturing jobs, send even more jobs to China, and cost middle class families $4,000 a year. This is a fundamental contrast with Vice President Harris, who is leading an American manufacturing boom – creating jobs right here at home and outcompeting China,” Harris campaign spokesperson Joseph Costello said in a statement to ABC News.

It remains unclear whether the support for manufacturing provided by the Biden administration has yielded significant gains in output or jobs, experts said.

The measures, however, have elicited a burst of factory construction. Spending on manufacturing-related construction surged from $76.4 billion in January 2021 to $238.2 billion in August 2024, U.S. Census Bureau data showed.

The surge in construction marks a positive signal but the critical test will be whether the plants deliver strong output and well-paying, long-term jobs, said Conlon.

“We haven’t had enough time to see if there’s a real effect or not,” he added. “How many chips are getting built by these plants? We don’t know that yet.”

Copyright © 2024, ABC Audio. All rights reserved.

(NEW YORK) — Hurricane Helene flooded properties and devastated buildings in recent days as it tore across a vast stretch from Florida to Tennessee.

Over the coming days and weeks, households will start to rebuild — and the costs will be enormous. Some homeowners will struggle to afford it.

The devastation arrives after years of skyrocketing prices for home and flood insurance that have left some households without coverage and others choosing low-cost plans with weaker policies, experts told ABC News. The increase owes in part to a surge in costs for building materials as well as the risk of more frequent or intense storms posed by climate change, they said.

Homeowners at properties damaged by Helene are likely to see their insurance costs rise even further, imposing financial strain for years to come, the experts added.

“There’s no question that the burden on households’ budgets has increased in recent years,” Benjamin Keys, a professor of real estate at the University of Pennsylvania’s Wharton School, told ABC News. “It has gotten substantially more expensive to live in harm’s way.”

Helene, which made landfall in Florida’s Big Bend region Thursday night as a Category 4 hurricane, was the strongest hurricane to make landfall in the Big Bend on record.

More than 100 people have been killed by Helene.

Helene dumped more than 30 inches of rain on North Carolina, producing the biggest local flooding in recorded history. The path of the storm’s devastation has spanned more than 600 miles.

Homeowners are set to draw on insurance policies that have become much more expensive in recent years.

In 2023, the nationwide average premium for owner-occupied homeowners insurance climbed about 11%, rising three times more than the overall inflation rate, S&P Global found in January.

Beginning a few years earlier, insurance prices soared even higher for homeowners in the region impacted by Helene. In Florida, the average home insurance price jumped a staggering 43% from January 2018 to December 2023, S&P Global said. Over that same period, the average insurance price for homeowners increased about 36% in North Carolina.

Rising prices leave customers less likely to purchase strong plans with ample benefits in the event of a disaster, Shan Ge, a professor at New York University who studies insurance and climate change, told ABC News.

“With the costs going up, people are getting less insurance and that’s going to be a problem when a disaster like this hits,” Ge said. “The recovery will be slower and the financial effects will be bigger.”

Homeowners insurance sometimes includes separate hurricane insurance, which typically involves an additional deductible paid by the consumer for damage incurred by a hurricane.

Neither homeowners insurance nor hurricane insurance covers flood damage, however. Instead, consumers must purchase flood insurance, but a far lower share of homeowners enrolls in flood coverage than home insurance.

The damage caused by Helene could expose the difficulties caused by that relatively low enrollment rate in flood insurance, Jeff Waters, an analyst at Moody’s Analytics subsidiary RMS, told ABC News.

“With an event like Helene where we are seeing all of the water, there’s likely to be more uninsured losses happening due to water because you don’t have as much take up there as you would on the hurricane policy side of things,” Waters said.

The price of flood insurance has also increased in recent years, and it’s expected to rise at a faster rate for some households going forward as the National Flood Insurance Program puts in place what it has called “Risk Rating 2.0.”

The new approach will set the price of flood insurance based on a calculation of each home’s risk of flooding, altering a previous policy that examined whether a home belonged to a general at-risk area.

Some homes damaged by Helene will face a price crunch as they weather an increase in flood insurance costs, alongside the anticipated increase in homeowners insurance that typically follows a hurricane, some experts said.

“It’s pretty clear in the aftermath of these disasters that homeowners insurance premiums rise a lot,” Ishita Sen, a professor of finance at Harvard Business School who studies home insurance rates, told ABC News.

The prospect of higher insurance costs could prompt difficult choices for homeowners and their communities, said Keys.

“This higher cost of living in disaster-prone areas is hitting households’ pocket books in ways that we haven’t seen,” Keys said. “Eventually it’ll induce substantial chances in these communities, whether that’s deciding where to live or how to build.”

Copyright © 2024, ABC Audio. All rights reserved.

(NEW YORK) — A surging stock market, low unemployment and robust growth — by just about every measure, the economy stood poised to deliver victory for Vice President Kamala Harris.

The exception, of course, was inflation, and it appears to have overshadowed other indicators. More than two-thirds of voters say the economy is in bad shape, according to the preliminary results of an ABC News exit poll.

Inflation likely shaped negative voter perceptions of the economy and helped fuel anger toward the party in power, just as it has done across the globe since the pandemic unleashed a wave of rapid price increases, experts told ABC News.

The political potency of inflation stems from the visceral, recurring sense of unease caused by high prices, experts added. That feeling leaves voters insecure about their future and desperate for a leader who can change the nation’s course.

“Inflation has a specific and special power in elections,” Chris Jackson, senior vice president of public affairs for Ipsos in the U.S., told ABC News. “It’s something people see in their face every day — every time they go to the grocery store or fill up their car.”

He added, “Inflation is present in people’s lives. It’s something they’re unhappy with and it’s something they rightly or wrongly blame on whoever is in charge.”

The pandemic set off an acute bout of inflation that impacted nearly every country across the world, when global supply chain blockages caused an imbalance between the availability of goods and the demand for them. In other words, too much money chased too few products.

Prices began to rise rapidly in the U.S. in 2021, catapulting the inflation rate to a peak of about 9% the following year. Inflation soared even higher in many other countries, including the likes of Brazil and England, where leaders faced an angry electorate.

In Brazil, where President Jair Bolsonaro cut taxes on fuel and electricity in an effort to slash prices over the months preceding an election that concluded in October 2022, the nation nevertheless replaced him with a leftwing challenger.

Earlier that year, in England, Prime Minister Liz Truss responded to the highest inflation in four decades with an economic policy centered on tax cuts and energy price controls. Her tenure in office lasted just 44 days before market reaction and political disarray led to her stepping down.

The post-pandemic pattern has exemplified a high rate of leadership change amid inflation crises around the world over the last half century, according to a study by Eurasia Group, a political risk consultancy firm. Examining 57 inflation shocks since 1970, the firm found government turnover in 58% of cases.

Further, when there was an election during or within two years of an inflation shock, it led to a change in government in roughly three out of every four instances, according to Eurasia Group.

“We’re seeing this trend on jet fuel after the pandemic,” said Robert Kahn, the managing director of global macro-geoeconomics at the New York-based Eurasia Group. “The pandemic inflation shock contributes to a sense of instability and a loss of confidence among people in their governments.”

Carola Binder, an economics professor at the University of Texas at Austin who studies the history of inflation in the U.S., characterized recent anti-incumbent sentiment in a slightly different way: “When people are experiencing inflation and suffering from it, they want to have someone or something to blame.”

Inflation has cooled dramatically over the past two years, now hovering near the Federal Reserve’s target rate of 2%. Even so, that progress hasn’t reversed a leap in prices that dates back to the pandemic. Since President Joe Biden took office in 2021, consumer prices have skyrocketed more than 20%.

The potential role of inflation in the U.S. election owes to a typical lag between when inflation comes down and when consumers acclimate to new price levels, since a lower inflation rate does not mean prices have come down but rather that they have begun to increase at a slower pace, experts told ABC News.

“When inflation comes back down, the prices of many critical items remain high, especially for people who are stretched and living paycheck to paycheck,” Kahn said.

Consumers will likely acclimate to current price levels over the coming months, but voters will remain sensitive to inflation, experts said.

President-elect Donald Trump’s proposals of heightened tariffs and the mass deportation of undocumented immigrants risk rekindling rapid price increases, some experts said.

When asked about whether inflation could reemerge as an important issue ahead of the next midterm elections in 2026, Jackson said: “If Republicans shoot themselves in the foot, absolutely.”

Copyright © 2024, ABC Audio. All rights reserved.