Trump’s One Move to Turbocharge Global Economy and Crush Inflation

What if one policy shift could ignite global growth while slashing inflationary pressures? The answer might lie in a radical embrace of digital asset infrastructure.

The Crypto Catalyst

Imagine a world where cross-border payments settle in seconds for pennies, not days for hefty fees. That's the promise of blockchain—a decentralized ledger that bypasses traditional banking bottlenecks. By fostering a regulatory environment that accelerates institutional adoption of cryptocurrencies and tokenized assets, a government could unlock unprecedented capital fluidity.

Smart contracts—self-executing code on chains like Ethereum—automate complex agreements, cutting out layers of costly intermediaries. This isn't just about Bitcoin's price; it's about rebuilding financial plumbing for the 21st century. Tokenizing everything from real estate to carbon credits creates liquid markets for traditionally illiquid assets, freeing trillions in dormant value.

The Inflation Antidote

Inflation often stems from supply chain frictions and monetary policy lag. Decentralized finance (DeFi) protocols offer real-time, transparent price discovery and direct peer-to-peer lending—potentially making central bank interventions less clumsy and more targeted. A pro-innovation stance could attract a flood of tech capital and talent, boosting productivity where it matters most.

Of course, Wall Street would still find a way to charge a 2% management fee for the privilege. The closer we get to frictionless finance, the more ingeniously the old guard invents new friction. The ultimate test? Whether legacy systems adapt or become expensive relics.

Key Takeaways

• President Donald Trump could boost global economic growth by 0.5 percentage points if he negotiated away his "Liberation Day" tariffs by striking free trade deals with other countries, an analysis found.
  
• There's no indication that tariffs will suddenly be removed, but the paper highlighted the extreme impact they've had on the global economy.
  
• U.S. consumers would see lower inflation in the coming years if the tariffs went away, the analysis found.
  

President Donald TRUMP could invigorate the global economy and stamp out inflation quickly. All it would take would be scrapping his signature economic policy.

That's according to an analysis this week by Daniel Harenberg, lead economist at Oxford Economics, who found that a reversal of the tariffs Trump imposed this year would drive the global economy to grow at a rate of 3% in 2026 and 3.4% in 2027, compared to 2.7% and 2.9% if there's no change. That's a boost of 0.5 percentage points per year, all while reducing inflation for U.S. consumers.

Trump has shown no sign that he would remove or negotiate away his beloved tariffs, but Harenberg's analysis highlighted the potential impacts if 2026 delivered yet another surprise on par with 2025's trade policy shock.

In this scenario, Trump could strike deals with other countries to remove tariffs ahead of the 2026 elections.

"In our extreme upside scenario, President Trump pushes for a series of bilateral trade deals to create a positive news-flow ahead of upcoming mid-term elections," Harenberg wrote. "One year after "liberation day," the U.S. administration starts lowering U.S. tariffs back to the levels at end-2024."

What This Means For Your Finances

Tariffs are likely to remain in place for now. But inflation could ease and growth could get a meaningful boost if Trump or a future administration reverses these policies.

Liberation from "Liberation Day" WOULD not only reinvigorate global trade, but would help household budgets for U.S. consumers. The analysis found it would push down the Consumer Price Index by 0.4 percentage points annually through 2029.

While a sudden reversal of tariffs is a long shot, it does seem more plausible that import tax levels will dwindle over a longer period of time. Drawing on analysis from the Yale Budget Lab, Harenberg noted that in the long run, U.S. tariff rates have historically tended to trend lower, and that this trend could reassert itself in the coming years. In other words, Trump's tariffs may prove to be a temporary blip if U.S. trade policy gets back on its former course.

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"After the recent rise, the U.S. effective tariff rate should fall, but it will take at least ten years to return to pre-liberation day levels," he wrote.